Larry Summers thinks the left's Modern Monetary Theory looks awfully familiar — and he doesn't want to see it again.
Summers' long resume includes leading Harvard University and the U.S. Treasury under former President Bill Clinton. But his relatively liberal view of economics didn't stop him from agreeing with former President George H.W. Bush's historic fight against deficit spending in a Washington Post op-ed published Monday.
MMT is the idea that because governments can literally print money, "they can spend as much as they like," Politico explains. "Inflation is the only obstacle" that should stop the presses, The Week details. MMT has reemerged with the rise of Democratic socialism, most recently when Rep. Alexandria Ocasio-Cortez (D-N.Y.) suggested it, along with tax hikes for the rich, could fund her Green New Deal.
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Summers agrees that it's "ludicrous" to believe in that "tax cuts would always pay for themselves," he writes in the Post. Even Bush slammed this supply-side theory as "voodoo economics" during his 1980 presidential campaign. But "MMT is the supply-side economics of our time," Summers continues. And this "moment of economic and political frustration" is no excuse for "the more extreme wing of the out-of-power political party" to claim it's valid, he continues.
Summers then goes on to explain why "modern monetary theory is fallacious at multiple levels," citing foreign governments that tried and failed to make MMT work. Read all of Summers' opinion at The Washington Post, and read some more MMT skepticism at The Week.