Does Modern Monetary Theory (MMT) Destroy National Debt Concerns?

An important part of my policy beliefs is that the national debt matters. It’s a huge freaking problem and can’t be ignored. Even if I’m convinced that expensive government plans make sense for other reasons, the debt throws a wrench into the thing.

Interest on the debt grows higher every year, increasing the proportion of government revenue that has to be wasted just on paying the damn interest. And, one day, and it’s unclear exactly when or at what level of debt, an economic catastrophe could hit when creditors stop trusting U.S. debt, refusing to buy it anymore and sending interest rates through the roof. Furthermore, money borrowed by the government reduces borrowing done by the private sector, so whatever that privately borrowed money would have produced, won’t come to fruition. The debt is a threat and a burden; it can’t be ignored.

I think this is true, but Modern Monetary Theory says I’m wrong. Because I believe the debt is so important, I can’t ignore a theory that says otherwise, even though getting one’s mind around it is quite tough.

Modern Monetary Theory

Modern Monetary Theory, also known as MMT, points out that the United States owns its own currency. It can pay off any debt at any time. It can buy anything it wants without taxing or borrowing a dime. It simply prints more dollars! Actually, even easier, it presses a few keys, digitally creating money like magic. And, this is how the government actually…