Tag: Modern Monetary Theory

MMT: Why Do Governments That Issue Their Own Currency Bother To Sell Bonds?

How does a modern government actually spend? Through keystrokes. Okay. When the government wants to buy something or make a transfer payment or Social Security payment, it credits a bank’s reserves, and the bank credits your demand deposit. All electronically. That’s the way modern states spend. So they are spending their own money unit into existence. Taxes just reverse that....