A number of commentators are suggesting that Liz Truss and Kwasi Kwarteng’s budget (the biggest tax cut since 1972) have embarked on a form of Modern Money Theory (MMT). I’m not going to provide references as they are easy to find, and I don’t want to suggest that the comments are reliable or accurate. They’re not, an opinion that I am happy to reference.
Prof. Stephanie Kelton who authored The Deficit Myth, reported on some radio show guests who agreed that this is “the death knell for modern monetary theory”. As Kelton points out this is a “misrepresentation of MMT”, for example, Modern Money Theory is not Quantitative Easing, and it “has never been about getting central banks to ‘print money’ for the government”. (See “Squawking About MMT“, 24 Sep).
MMT proponent Prof. Richard Murphy is very critical of Kwasi Kwarteng’s budget, and believes that “Only modern monetary theory can save the economy from Trussonomics“.
The Gower Initiative for Modern Money Studies described Kwareng’s mini-budget as “a new variant of the same old ‘trickle down’ dogma [..] which is not based on monetary reality but serves instead a distorted economic system which puts growth and profit as the holy grail of success and is proving itself an existential threat to existence.” (see “‘Mini budget’ shows contempt for ordinary people as government banks on growth at any cost“).