There is no such thing as a free lunch, especially under MMT.

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Modern Monetary Theory (MMT) has emerged in recent years as a highly-debated economic concept, challenging traditional views on national debt and money. MMT is a macroeconomic theory that asserts that countries with full control over their own currencies, such as the United States, are not limited by revenue constraints when it comes to government spending. MMT promises an artificial boosting of economic growth rates and full employment through expansive government spending, without apparent immediate costs. Critics have raised multiple concerns about its potential negative consequences, including the risk of runaway inflation due to an interventionist approach to the economy

MMT was coined in the late 2000s by Australian economist Bill Mitchell, but gained traction in 2020 amid skyrocketing global government debt. With interest rates near zero, the theory fueled the illusion that financial capacity is limitless. At its core, MMT proposes that government can never run out of money due to its ability to print currency to finance deficits. While economist John M. Keynes advocated for short-term government stimulus during economic shocks, the current iteration of MMT, fully embraced by Democrats, seems to justify endless spending under the pretense that the bill will never come due.

The theory also suggests that the primary means to achieve full employment is through government fiscal policy, meaning government taxing and spending decisions. However, this approach fails to account for natural unemployment caused by factors such as workers' skills not matching available jobs or short-term changes of employment due to labor market frictions.

Proponents of MMT advocate for a world of zero unemployment, but this is widely regarded as unrealistic. Just as there exists a natural rate of hunger, illiteracy, and homelessness, there is an inherent level of unemployment that can never be eliminated entirely.

The idealistic goal of achieving zero unemployment often leads to excessive government intervention and control, resulting in undesirable consequences. This goal can reduce individual autonomy and stifle private sector growth by concentrating excessive power in the hands of the government.

The notion of a government-run job guarantee program is fraught with challenges. It would significantly increase federal spending, fueling inflation, as well as distort the labor market. A guaranteed jobs program fails to incentivize individuals adequately and creates an unhealthy dependency on government. This runs counter to the principles of a competitive economy driven by market forces and entrepreneurship.

MMT proposes that governments can fund programs and investment without relying on taxation and loans from other countries or international institutions like the IMF. While the idea of not relying on taxation may seem ideal, there is a tradeoff in the form of sky-high inflation.

MMT assumes that government is the most productive entity to utilize resources, so it can be used stimulate aggregate demand, minimizing the role of individuals and businesses. This approach would expand government control over economic resources and monetary policy, in this way President Biden created the worst inflation rate for America for the past four decades, since the increasing rates is viewed as a form of stimulus within the MMT framework.

Proponents of economic freedom and entrepreneurship argue that crucial economic development requires preserving individual autonomy and fostering a thriving private sector, rather than resorting to government intervention and control over employment. The American principles of self-determination, free enterprise, and the pursuit of opportunity have been the bedrock of economic prosperity, innovation, and upward mobility.

As the debate surrounding MMT continues, policymakers and economists must weigh the risks of this unconventional approach because the potential erosion of markets, individual liberties, and entrepreneurial spirit that has driven America's economic prosperity for centuries cannot be overlooked. The cornerstones of prosperity must be preserved, and MMT can only persist so long before out of control inflation drags the economy into collapse.