Policy Implications of our Understanding of Money

In module 9 you learned about the alternative theory of money that goes by 'modern money theory', 'modern monetary theory', or simply 'MMT'. One of the primary conclusions of this theory is that, because the US government is the sole creator of dollars, it is meaningless to suggest that it could not afford, in the financial sense, a particular program. This is in stark contrast to the traditional story of money that holds that money is a scarce thing, and therefore the government, like anyone else, must first get the money it desires to spend.

In this last discussion forum of the term, I'd like you to consider a government policy of your choosing and discuss why our understanding of what money is and where it comes from is important for understanding the possibility of actualizing that policy. In particular, I'd like the discussion of your chosen policy to consider the positions of 'sound finance', which emphasizes the limits to the government's ability to spend, versus 'functional finance', which emphasizes the real needs and limits of the nation, in terms of its workers and their skills, natural resources, and so on.

Completing this discussion assignment with a minimum 200 word post