Krugman Goes After MMTers, Again

Paul Krugman 

This is good.

Paul Krugman is often terrible when it comes to economic policy but next to MMTers, he appears as though he is a reality-based economist.

That's how bad the MMTers are.

Krugman tweets:

So one thing I learned from the past few days of discussion is that MMTers believe that budget deficits necessarily increase the money supply. That's an interesting view, where by "interesting" I mean "completely wrong" 1/

— Paul Krugman (@paulkrugman) March 2, 2019

It's wrong conceptually, bc govs can finance deficits by selling bonds not printing money; and it's wrong empirically. Here's changes in US debt and monetary base from 1980-1986 2/ pic.twitter.com/RUQdDduy14

— Paul Krugman (@paulkrugman) March 2, 2019

I chose that period because it's the Reagan/Volcker loose fiscal/tight money era. Debt rose almost $1 trillion, monetary base only $65 billion (and fell in real terms). So this view is just wrong, and obviously so 3/

— Paul Krugman (@paulkrugman) March 2, 2019

Mainstream Keynesians have been coddling the MMTers, basically trying to find ways their views might make sense. It's looking more and more like a losing game; their hearts may be in the right place, but their heads really aren't 4/

— Paul Krugman (@paulkrugman) March 2, 2019

-RW