In this Institute of Economic Affairs podcast, Dr Christopher Snowdon, Head of Lifestyle Economics at the IEA, speaks with Emmanuel Maggiori, author of the new book If You Can Just Print Money, Why Do I Pay Taxes? The conversation tackles Modern Monetary Theory (MMT): what it actually claims, the steelman case for it, and where its logic starts to fall apart. They cover the core MMT proposition that sovereign governments face no financial constraint, the role of idle resources in the theory, and why fiscal rules exist in the first place.
Maggiori explains how MMT was built on a foundational accounting error made in the late 1990s, when its originators misread the operations of the US Treasury and Federal Reserve and concluded that government spending creates new money from nothing. The discussion examines MMT’s theory of taxation, which holds that taxes do not fund government but instead legitimise currency, redistribute income, and dampen inflation. Snowdon and Maggiori also go through MMT’s policy proposals, including the Green New Deal financing paper, and find them riddled with assumptions about the mobility of resources that do not hold up in practice.
The conversation also covers the rhetorical tactics used by MMT advocates online, the response of serious left-wing economists who have rejected the theory, the Argentina example of nominal versus real wealth, and how figures like Zach Polanski have confused MMT’s hypothetical world with how things actually work. Maggiori explains why MMT’s inflation theory functions like an on-off switch and why that is fundamentally at odds with how real economies behave.
Emmanuel’s new book, If You Can Just Print Money, Why Do I Pay Taxes?, is out now (https://emaggiori.com/mmt/)
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