“Governments create money all the time. We do that for war.”
This is the argument for more money printing, and perhaps unlimited money printing, recently advanced by Professor Mariana Mazzucato on prime-time BBC.
Channeling Warren Mosler, the godfather of modern monetary theory, Dr. Mazzucato argues against “austerity”—by which she means any natural restraints on government spending. In order to spend, sovereign states need not “earn” tax revenue like a household must earn money, nor do they need to borrow.1 There is a third option: they can print new money at will and enjoy the profit of seigniorage. Just look at Germany, she says approvingly, which recently conjured up €100 billion by executive edict for the war effort in Ukraine!
She certainly is correct that governments print money to pay for wars. America was effectively born into debt during the Revolutionary War, and borrowed/printed money for every war thereafter.
But beyond that she is entirely and embarrassin...
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