Modern monetary theory is suddenly everywhere. The idea that a government that can freely print and spend its own currency shouldn’t deny anyone a job is gaining currency in our pandemic-ravaged world.
Coming amid a sharp increase in public expenditure, Democratic presidential candidate Joe Biden’s $2 trillion clean energy plan shows a disregard for debt and deficits that was unimaginable after the 2008 subprime crisis.
The theory that sovereign currency issuers can’t go broke is also at work in the U.K., in Chancellor of the Exchequer Rishi Sunak’s attempt at keeping the economy ticking — even if it means paying the private sector not to fire staff. Japan’s government, already the most indebted among major nations, is more than doubling its bond issuance to fund COVID-related expenditure.