I’m actually persuaded that MMT is basically correct. But MMT doesn’t say that money printing doesn’t cause inflation. It says that it won’t cause inflation if there’s slack in the economy, or money is taken out of the economy through higher taxes. The key point of MMT, as I understand it, is that central government budgets don’t need to balance for the sake of it. But taxation is the primary lever for controlling inflation.

What we’re seeing is what MMT would predict. We had essentially full employment in February 2020. Then we more than doubled the money supply, and didn’t raise taxes. We would expect to see massive inflation even under MMT.

We are all de facto MMT believers now, insofar as nobody is willing and able to balance the budget. That shows the policy failure of this administration. MMT would say that we need to raise taxes to take money out of the economy. We especially need to raise taxes on the upper middle class, who are responsible for the lion’s share of consumer spending. But Biden has stuck to this ridiculous $400,000 floor for raising taxes.