Looks like our resident economist can't have his ideas challenged. Anyway for those of you goofballs who think Dalio is pushing MMT for altruistic purposes, read the debt crisis book. He is pushing for the next phase because he knows what to do and there is very little move the needle alpha left for him.
The theory is circular bull. Axiom one is that government is self funding. Axiom two is that self funding can cause inflation. Axiom three is that the government is required to tax to prevent inflation. Therefore, government IS NOT self funding and relies on taxation. This is the most idiotic economic theory I have ever encountered, including Soviet Communism which is at least internally consistent. In addition to being invalid, the theory is unsound because a modern interconnected economy required massive import of inputs and manufactured goods made in low wage countries. MTT "economists" assert that the same currency can be used for imports, but this is another truckload of bull. In the real world exporters demand convertible currency in exchange for the raw material or product and if you don't have it they will ask for either foreign currency or gold to settle the transaction. If all you have are domestic notes, like Soviet domestic rubles the exporter will refuse the sale and you will have to rebuild your entire economy to autarky. Which is stupid. Very very stupid.
I don't disagree with much of the first half of your post. As far as a the second point, you'll probably fid it interesting to learn that it is definitely possible to be an exporter without really having to resort to depending on using your own currency. There's a whole industry built up around it. Basically you are in unstable currency country X and both exporting to and getting raw materials from stable currency area Y. When you sell your exported goods you get $Y and you spend those $Y to buy your raw materials. Which by definition if you're profitable will always be be less than your $Y revenues. You repatriate some of the remaining $Y home to pay your workers, or in some cases actually pay them in $Y because that's more valuable to them. And probably keep your profits in $Y as well. Your $X needs are very small relative to your $Y, and if you really want to avoid the instability of $X you set up a reverse deal with someone who exports to X. The big banks have entire desks devoted to setting up and running these types of swap deals.
I hadn't seen your post above until just now. I can, for what it is worth, offer a brief opinion and some additional perspective. With regard to "MMT consolidating more power..." , this statement can't be answered as it stands. It may be stemming from a misunderstanding of MMT. MMT itself is not opinion based but rather it is based on observation, facts and figures. So it can only be argued from that perspective.* You would have to ask a question with the blank filled in, such as, "Does MMT consolidate more power in the hands of government, and through government spending, then _________________. to expect an attempt at an answer. Your second statement: " the government picks winners and losers." Is true, but I would take issue with the verb. If I take the statement at face value, I would say Life, if left to its own devices, pick's winners and losers. We might prefer instead that a benevolent government do the picking in a mertitocracy." * Those that argue that MMT is nonsense have noticed that conclusions drawn from MMT diverge sharply from their steadfastly held traditional views that they have supreme trust in. If they had studied MMT, they would not hold the views that they do. One can not argue with a correct balance sheet, but of course one can always try and be proved a fool. The arguments surrounding MMT, coming from those who understand money from an MMT perspective, all have to do with MMT implications for social and public policy. These are valid points of disagreement, and ripe for discourse.
https://review.chicagobooth.edu/economics/2019/article/can-us-print-its-way-out-deficit "But Federal Reserve Chair Jerome Powell has described MMT as “just wrong.” And when Chicago Booth’s Initiative on Global Markets polled its Economic Experts Panel, it found no unabashed MMT fans. None of the prominent economists polled agreed that countries that borrow in their own currency need not worry about deficits because they can print money to finance debt. More than half disagreed strongly with this suggestion—and the share rose to almost three-quarters when weighted by respondents’ confidence in their answers. “The present value of debt issuances is equal to the present value of debt payments,” responded Stanford’s Darrell Duffie. “So borrowing more now means paying more later.” However, several respondents who strongly disagreed acknowledged there could be room for nuance. “Obviously, they should worry,” remarked Yale’s William Nordhaus, recent recipient of the Nobel Prize in Economic Sciences for his work on climate-change economics. But he added that some issues may be less pressing, “particularly with flexible exchange rates.”"
Backstory to the above linked article is the University of Chicago's poll of very prominent economists about the viability of MMT: https://www.igmchicago.org/surveys/modern-monetary-theory/ Hyper-Inflation and the ability for the Country to successfully issue bonds are common themes. Some mention historical South American and European examples.
All of the prominent MMT economists whose work I have read and studied would express a far more nuanced view of deficits than the simplistic view seemingly embodied in the silly statement above. What the MMT economists have correctly pointed out is that deficits can be both too high AND too low, depending on factors such as what level of savings is desired in the private sector, etc. This is far different from the nutty, over simple idea that deficits don't matter or any level of deficit for any length of time is fine, and that so far as I'm aware no economist holds to. . There are still plenty of economists around whose knowledge outside their own specialty area has grown obsolescent over time because they haven't had the time to keep up to date with developments of minor concern to them. . Of course that doesn't stop them from expressing an opinion. I find the "Investopedia" definition of MMT particularly egregious in its errors and over simplification. It gives a very misleading and incorrect picture of MMT. It also overstates somewhat Warren Moslers contributions. I don't want to speak for the MMT economists who can speak for themselves, but I will give some idea of the nuances involved by quoting something the well-regarded mid 20th Century economist Abba Lerner wrote. (I consider Lerner to be one of the fathers of Modern Money Theory.) Lerner wrote: The first financial responsibility of government (since no body else can undertake that responsibility) is to keep the total rate of spending in the country on goods and services neither greater nor less than that rate which at current prices would buy all the goods that it is possible to produce. An interesting corollary is that taxing is never to be undertaken merely because the government needs to make money payments ... Taxation should therefore be imposed only when it is desirable that the taxpayers shall have less money to spend.--Lerner, Abba, Social Research, Vol. 10 pgs 38-51 (1943). Lerner's second law of Functional Finance is that the government should only borrow when it is desirable that the public should have less money and more bonds. This is the origin of the MMT assertion that the purpose of taxes and bonds is not to finance spending. MMT economists regard taxes as a means of removing excessive private income, and bonds as an interest bearing alternative to money. If the government finds that neither taxes nor additional bonds are needed , Lerner would have had the government print new money to meet its needs. This may be the origin of the rather crazy incorrect assertion that MMT economists believe that any time the government wants to spend it should simply create as much money as it wants. But as we see from what Lerner wrote, creation of new money is to be carefully balanced against the need for taxes and bonds and tempered by productivity. These are not at all simple concepts to fully digest and appreciate. Lerner's ideas were developed further over the latter half of the Twentieth Century by Economists such as Hyman Minsky, Randall Wray, Bill Mitchell, Warren Mosler and many others. In the 1990s as the EMU and ECB was being formed among the European countries, the MMT economists were prescient in their analysis of the flaws of the EMU. They predicted that the EMU, which is an incomplete Monetary Union, as there is no Euro Bond, would result in budget restraint within individual countries that lacking their own currency they would be powerless to gain relief from. They predicted the result would be a "disinflationary bias that [would lock] the whole of the EMU into a depression it is powerless to lift."* The present EMU is like a United States where there is a Fed, and a single currency, but no single sovereign bond, and each State has its own Treasury and fiscal policy. Is it surprising that the EMU finds itself in an economic malaise that it seems unable to extract itself from? I don't think so. -- See, L. Randall Wray in "Understanding Moern Money", Pg. 92, Edgar Elgar (1998). *Godley, Wynne, "Observer", August 31st, 1997, Business Section, pg. 2.
The statement I posted came directly from the University of Chicago piece I linked to - for the record, those are not my words. It would be a grave mistake to outright dismiss the outstanding economists polled by the University of Chicago for the MMT article. Economic theories gain mainstream acceptance only when they’ve been throughly vetted through vigorous peer review.