Governments thought they could summon endless wealth from thin air. Instead, Modern Monetary Theory unleashed inflation, eroded trust, and left the Fed cornered by its own creation.

Once upon a midnight dreary, while I pondered, weak and weary, Over many a quaint and curious chart of fiscal lore — While I nodded, nearly napping, suddenly there came a tapping, As of markets softly rapping, rapping at my ledger’s door. “’Tis the Fed,” I muttered, “tapping at my nation’s door — Only MMT, nothing more.”

Modern Monetary Theory (MMT) emerged like a laboratory experiment equal in ambition and madness. MMT is the idea that governments and central banks can print money and flood the economy with their respective currency without consequences, as long as the velocity of cash in circulation remains under control. In 2019, the theory had begun to seep into the political mainstream as a means to pay for large government expenditures, such as The Green New Deal, by potential 2028 presidential candidate Alexandria Ocasio-Cortez.

The brainchild of Stephanie Kelton, advisor to the Bernie Sanders 2016 presidential campaign, MMT underlines the idea that, unlike a household, the government can disregard its budget entirely. In a TED Talk on October 21, 2021, Kelton stated,

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