Jonathan Culbreath, posting on the American Conservative web page (March 24, 2021), urges his fellow conservatives to adopt a fashionable leftist bromide, modern monetary theory (MMT). Mr. Culbreath relies for his account of MMT on the popular book by Stephanie Kelton, The Deficit Myth, which I reviewed here. According to MMT, a government that controls its own currency never has to worry about deficit spending, because it can always print more money to pay its bills. The only thing holding it back is the danger of inflation, and this can always be averted by withdrawing money from the economy through taxation. Besides, inflation cannot occur to a damaging degree unless there is full employment. Mr. Culbreath evidently has not heard of “stagflation.” He forgets that inflation can quickly spiral out of control. There is no magic by which bookkeeping entries can erase debts without bad consequences. If something sounds too good to be true, it almost always is.
