The Madness that is MMT

 Modern Monetary Theory is summarized as follows by Wikipedia- 

MMT frames government spending and taxation differently to most orthodox frameworks.

Some countries have no taxes. They rely on royalties from mining companies. They may have their own currency but that currency may not be deemed to be 'legal tender'- i.e. the Government is not obliged to accept it in payment of taxes.  

MMT states that the government is the monopoly issuer of its currency

It may be. It may not. During the Afghan civil war, there were several different authorities printing the national currency. Equally, a country may licence different enterprises to issue currency. But it may also forego 'seigniorage' and leave it to free enterprise to issue currency. Crypto may evolve in this way.  

and therefore must spend currency into existence before any tax revenue can be collected.

Nonsense! Those with a tax obligation can borrow currency from the Government mint to pay their taxes. The government then spends the currency they have collected as tax revenue. Those who get the currency in exchange for supplying goods and services can sell that currency to those who have tax obligations in the next period.  

The government spends currency into existence

why not lend it instead? That way, smart people who will have a tax obligation borrow it and pay interest on it. But if there is no monopoly of lending in the currency, this means there will be a market for it. This in turn means that when soldiers and policemen are paid in the new currency they don't mutiny. They can see for themselves that they can trade the new currency at a premium for whatever type of money they were habituated to. 

and taxpayers use that currency to pay their obligations to the state. This means that taxes cannot fund public spending in a nominal monetary flow sense,

If you run a big enterprise, you borrow to fund current expenditure. Why? People want to lend to you because it is safer to have an IOU from a big player than to keep your savings under your mattress. Also you get a small amount of interest. 

Governments are very big enterprises indeed. So long as they have an army and a police force which can forcibly extract taxes (tribute was the older term), they will be able to borrow.  

 as the government cannot collect money back in taxes until after it is has been issued into the economy.

This is easily done by lending the currency to guys who will need it to pay their taxes.  

In this kind of monetary system, the government is never constrained in its ability to pay,

In which case, it can pay a higher price to command the loyalty of soldiers and statesmen of other nations and thus conquer those countries without a fight. Consider the Kingdom of Iyerland which I founded after I discovered MMT. I paid ten billion dollars worth of Iyerish currency to all the soldiers and corrupt politicians in the world. They quickly killed off any patriots in their own countries and gladly proclaimed me Emperor not just of this planet but the whole fucking galaxy. 

 rather the limits are the real resources available for purchase in the state's currency.

Why does Keir Starmer not just buy all the property and all the businesses in the UK- and any other country which permits such sales- by printing money? That way, he will own everything. We would all be working for him. He would be the all powerful Dictator of this island. Suppose he wants to get rid of illegal migrants. He can just refuse to rent accommodation to them or to sell them food or to hire them to work. They would have to fuck off or else starve to death.  

The plain fact is, if the Government tries to do something which, rightly or wrongly, people believe is impossible to do, then they can't do that thing. Why? In Econ, Expectations create Reality. That's why if I offer to buy your house for a billion Iyerish pounds (which I assure you are pegged to the US Dollar), you tell me to get lost. This is because you don't expect me to be able to make good my claim. On the other hand, if Bill Gates or Elon Musk offers to buy your house for some multiple of its value, you would be eager to take the deal. Since they are very very rich, you expect them to be able to make good on their offer. 

MMT argues that the primary risk once the economy reaches full employment

Nobody knows when that is achieved. Over-full employment means negative returns- i.e. lower output than what is feasible.  

is demand-pull inflation, which acts as the only constraint on spending.

Sadly, even hyperinflation is not a constraint on spending. 

MMT also argues that inflation pressures can be mitigated by increasing taxes on everyone, to reduce the spending capacity of the private sector,

the Government can ensure 'forced saving' by introducing rationing. This is called 'repressed inflation'. That's what happened during the war. Alternatively, there can be compulsory saving schemes or a licensing system ensuring that fewer consumer goods are produced.  

releasing real resources such that the state can employ them at current prices in a non-inflationary way.

The problem is that taxes have a disincentive effect on work effort. Also, there is a 'crowding out' effect on Investment by the private sector. If the Marginal Efficiency of Capital in the Public Sector is higher- well and good. If not, the country falls behind its competitors.  

The primary demand and inflation management approach advocated by most MMT economists is the job guarantee employer of last resort (ELR) programme.

Sadly, it is cheaper to pay people not to work rather than to provide facilities for them to go through the motions of working. The trick is to 'sign off' more and more people as 'sick'. This reduces the incentive to live off the dole. Why? To be labelled as 'disabled' is demoralizing.  

 This provides a spend-side automatic fiscal stabilisation mechanism and establishes a nominal price anchor, utilising a buffer stock of employed labour.

No. It just means there are a lot of civil servants administering loss making schemes. The country turns to shit. Smart people emigrate.  

This is in contrast to the orthodox monetary dominance approach to demand management which involves adjusting interest rates and utilising a pool of unemployed labour as a buffer against inflationary pressures following a belief in a Phillip's curve trade off between the two.

It is also in contrast to the common sense approach which says that pretending unemployable people are actually productively employed is silly. Ordinary people will soon see that the thing is a con. But, if you think the country is being run by a bunch of clowns, you will expect it to grow poorer and weaker. Since Expectations create Reality, that is exactly what happens. True, if you have a Dictator and a Secret Police and lots of Gulags, nobody would have the courage to give voice to their expectations. But this can't prevent economic conditions from worsening. 

The Phillips curve had broken down by the early Seventies. There is literally nothing modern about 'Modern Monetary Theory'. It is senile shite.