It's never been tried

This objection misunderstands MMT’s nature. It is not a policy to be “tried” but a description of existing monetary operations.

Every time the UK government spends, it creates money. Every time it taxes, it removes money from circulation. This happens regardless of the economic framework policymakers believe they are following.

The question MMT poses is: given how the system actually works, what policies make sense?

Policies informed by MMT insights have been applied:

• Japan’s sustained fiscal support despite high debt levels
• Post-2008 quantitative easing programmes (demonstrating central bank capacity)
• COVID-19 pandemic responses (rapid fiscal expansion without solvency crisis)

The pandemic response is particularly instructive. Governments worldwide spent massively, unemployment was supported, and the predicted bond market crises did not materialise. This was MMT’s prediction, not mainstream economics.

What would change under MMT-informed policy is not the mechanics but the self-imposed constraints and the focus of attention. Instead of asking “can we afford this?”, policymakers would ask “do we have the real resources?” and “what are the inflation risks?”