Episode Summary
Executive Summary: Nathan Tankus argues MMT is a broader macro framework centered on full employment, inflation constraints, and institutional design—not “printing money.” He discusses his forthcoming Fed book, the need for preemptive supply-side and regulatory tools, the case for minting a platinum coin to avoid default, and why he favors Fed-issued securities and direct credit controls over reliance on interest rates alone.
Main Topics: MMT’s intellectual roots and scope (Priority: 5/5): Tankus traces MMT to post-Keynesian and Minskyan traditions, emphasizing fiscal policy, balance-sheet effects, and full employment rather than the caricature of unlimited money creation. Inflation, supply constraints, and policy design (Priority: 5/5): He argues inflation is often driven by bottlenecks, supply-chain disruptions, and administrative pricing decisions, so policy must go beyond aggregate-demand management to include regulation, infrastructure, and targeted interventions. Future of MMT and interdisciplinary expansion (Priority: 4/5): Tankus says MMT should deepen ties with law, input-output economics, and policy analysis, while building institutions and research capacity to redesign budgeting, stabilizers, and governance. Debt ceiling and the platinum coin (Priority: 5/5): He strongly supports minting a trillion-dollar platinum coin as the cleanest legal way to avoid default, calling it preferable to constitutional brinkmanship or gimmicky workarounds. Fed-issued securities and monetary operations (Priority: 4/5): Tankus revisits historical proposals for Fed bills, arguing the Fed should issue its own securities rather than depend on Treasury issuance, which would improve control over financial conditions and reduce institutional conflict. The Fed’s operating framework coming full circle (Priority: 4/5): He describes the Fed’s evolution from credit/financial-conditions management to monetarism and back toward financial-conditions-focused policy, suggesting the system has returned to a Martin-era style of central banking.
Key Arguments: MMT is not primarily about “printing money”; academically it is about using fiscal policy and institutional tools to manage the economy and achieve full employment. The central risk of deficit spending is inflation, but inflation is not one thing: some episodes are demand-driven, while others are bottlenecks, supply-chain failures, or administrative price-setting. When inflation stems from physical chokepoints, broad demand restraint can be counterproductive; targeted investments in ports, logistics, and resilience may be the better response. The future of MMT lies in cross-disciplinary work—especially law, administrative state design, tax policy, banking supervision, and concrete policy implementation. Minting a platinum coin is legal, direct, and preferable to default; it avoids impoundment and preserves government payments without violating the debt ceiling. Fed-issued securities would give the central bank greater operational control over interest rates and financial conditions, avoiding dependence on Treasury issuance. The Fed’s post-Volcker operating framework has effectively returned to a financial-conditions-first regime, but with more transparency and accountability than in earlier eras. Direct credit regulation and tighter financial rules can make policy restrictive even with low or zero rates on government liabilities; interest rates are only one policy lever. Preemptive institutional investment—rather than crisis response—is the best way to manage supply shocks and macro instability. A job guarantee is, in MMT’s view, an automatic stabilizer that reduces the social cost of demand mismanagement and involuntary unemployment.
Data Points: Book title: Picking Losers - Tankus’s forthcoming book about the Federal Reserve and the myth that it can avoid picking winners and losers. Book proposal timing: April 7 recording; auction expected end of April or beginning of May - He says he expects to announce a publisher contract in roughly 1–2 months. MMT public attention spike: Late January 2019 - Tankus cites Alexandria Ocasio-Cortez’s 60 Minutes mention as a major visibility jump for MMT. MMT policy report release: January 2022 - He says the report on new monetary policy was completed and released after a long gestation. Maturity limit discussed for Fed bills: Up to 1 year, including 3-week bills - In the 2008–2009 Fed memo, officials discussed conservative short maturities for Fed-issued debt. UMKC assistantship stipend: $11,000 - Tankus cites the PhD support level as evidence of how under-resourced MMT-adjacent academic work is. Time frame for MMT roots: Late 1940s to early 1950s - He dates the myth of Fed neutrality/picking no winners and losers to the 1951 Treasury-Fed Accord era. Volcker era: October 1979 - Referenced as the moment Volcker announced the money-supply targeting experiment. MMT academic community size: A couple dozen economists; maybe 40–50 academics more broadly - Tankus emphasizes that MMT has had large influence relative to a small research base.
Pivotal Quotes: "MMT is not about just, you know, quote unquote, printing money" — Nathan Tankus: He explains the academic meaning of MMT and contrasts it with popular caricatures. "The future of MMT, I would say, is building more relationships with other disciplines." — Nathan Tankus: He describes the movement’s next phase as interdisciplinary and policy-oriented. "we should avoid government default" — Nathan Tankus: His core rationale for supporting the platinum coin solution to the debt ceiling crisis.
Implications: Listeners should expect MMT to keep shifting from slogan-driven debates to concrete policy design: debt-ceiling workarounds, central-bank operations, supply-chain resilience, and institutional reform. The debate is moving toward implementation, not just theory.
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Hosted by David Beckworth of the Mercatus Center, Macro Musings pulls back the curtain on the important macroeconomic issues of the past, present, and future.