Ponzi Monetary Theory
Abstract MMT suggests that money printing is an answer to consumption collapse, in which there exist a free-lunch, where the printed money can be spent without causing inflation. This conclusion is so counter-intuitive that some have termed it "a theory so stupid that only a modern academic would accept it". However, MMT seems to be the only explanation for current empirical evidence. In this post, a non-economist proposes an alternative, theoretical explanation for current events that models the current financial system as a Ponzi scheme which rapidly absorbs wealth from the economy around it. This scheme can be kept going through the constant printing of money for it to absorb. Further, there is no apparently inflation, as the Ponzi scheme is absorbing the new money. We explain that while apparently attractive, such a scheme will lead to decreasing efficiency and market dysfunction, with inflation re-appearing as an end game scenario. Our theory concludes that there is no f