Interest-Rate Policy Is Backward, Modern Monetary Theory Pioneer Mosler Says

The video discusses the debate around Modern Monetary Theory (MMT), highlighting criticisms and support for the theory. Critics argue that MMT's approach to deficits and currency is flawed, while proponents like Warren Mosler explain its principles and potential policy options. The discussion covers interest rate policies, trade impacts, and the relationship between inflation and budget deficits, emphasizing the need for a reevaluation of current economic models.

What is a major criticism of the idea that deficits don't matter for countries that can borrow in their own currency?

• It leads to economic growth.

• It causes hyperinflation.

• It stabilizes the currency.

• It reduces unemployment.

According to Warren Mosler, what has contributed to the growth of MMT over the years?

• International agreements

• Pure force of logic

• Public protests

• Government policies

What does Warren Mosler suggest about the role of interest rates in the economy?

• Higher rates are expansionary.

• Lower rates are inflationary.

• Interest rates have no impact.

• Higher rates are deflationary.

How does Mosler view the role of Congress in economic management?

• The central bank is the main driver.

• Congress has always been driving economic policy.

• Congress has no role.

• Economic management is automated.

What is a key consideration when implementing the Green New Deal according to the discussion?

• Reducing the federal deficit

• Increasing taxes

• Decreasing government spending

• Scoring spending based on inflationary implications

What is the suggested approach to handling strategically important items in trade?

• Rely on international markets

• Source them domestically

• Impose tariffs on all imports

• Ignore strategic importance

What is the relationship between government spending and inflation as discussed?

• Spending always causes inflation

• Inflation is unrelated to spending

• Spending reduces inflation

• Inflation occurs when spending exceeds productive capacity