Concepts
44 published · sourced & reviewedA concept is one load-bearing idea — currency issuer, sectoral balances, vertical money — with explanations targeted at five levels of background knowledge, the common misconceptions at each level, and typed relationships to other concepts in the graph. The register below is the whole graph at a glance: category, how general or situational the claim is, and the source confidence an editor has signed off on.
Common Myths 9
01
Mainstream economics falsely claims money evolved from barter systems where people directly traded goods. Anthropological evidence shows th…
Fundamental
Medium
02
Conventional debt sustainability measures assume governments must 'pay back' debt like households. But sovereign currency issuers like the …
Fundamental
Medium
03
Unlike households, governments that issue their own currency don't need to 'find money' before spending. Households must earn or borrow bef…
Fundamental
Medium
04
MMT economists argue that mainstream economics relies on flawed assumptions like perfect markets and utility-maximizing individuals, leadin…
Fundamental
Medium
05
Most people think banks lend out deposits, governments need taxes to spend, and central banks control the money supply. These beliefs are b…
Fundamental
Medium
06
Bond vigilantes are investors who supposedly punish governments by selling bonds and driving up interest rates. But this threat is a myth f…
Fundamental
Medium
07
The 'crowding out' myth claims government spending reduces private investment by competing for limited savings. This is false because gover…
Fundamental
Medium
08
The loanable funds myth claims banks lend out depositors' savings, but this is backwards. Banks actually create new money from nothing when…
Fundamental
Medium
09
MMT economists reject the NAIRU (Non-Accelerating Inflation Rate of Unemployment) - the mainstream idea that there's a 'natural' unemployme…
Fundamental
Medium
Core Principles 15
01
Central banks are government institutions that manage the monetary system by creating reserves for commercial banks and implementing govern…
Fundamental
Medium
02
A government that issues its own currency cannot involuntarily run out of it. The real constraints on public spending are inflation and rea…
Fundamental
High
03
Currency issuers (like the US government) create money by spending and don't need to 'find' money first. Currency users (households, busine…
Fundamental
Medium
04
Hyperinflation is typically caused by supply collapses or political crises, not excessive money printing. Historical cases like the Weimar …
Fundamental
Medium
05
Unemployment exists because governments choose policies that create it, not because it's economically necessary. When governments limit spe…
Fundamental
Medium
06
When government spends money, it becomes someone's income who then spends it again, creating a chain reaction. Each dollar of initial spend…
Fundamental
Medium
07
The output gap measures how much more the economy could produce if everyone who wanted a job had one. When there's unemployment or underuse…
Fundamental
Medium
08
A currency issuer (like the US or UK government) creates its own money and can never run out of it - they're the monopoly supplier. A curre…
Fundamental
Medium
09
Currency sovereignty means a country that issues its own currency (like the US with dollars) and doesn't promise to convert it to gold or a…
Fundamental
Medium
10
When governments impose taxes that must be paid in their currency, they create demand for that currency. This tax obligation forces people …
Fundamental
Medium
11
For a monetarily sovereign government, the real limit on spending isn't running out of money (which it can't), but creating too much demand…
Fundamental
Medium
12
Functional Finance means governments should set fiscal policy based on what the economy actually needs - full employment and price stabilit…
Fundamental
Medium
13
Public Purpose means using government spending to achieve goals that improve society's well-being - like guaranteeing everyone a job, keepi…
Fundamental
Medium
14
The national debt represents money the government has spent into the economy that hasn't been taxed back yet. Every dollar of government de…
Fundamental
Medium
15
The Consolidated Government Balance Sheet combines the treasury and central bank accounts into one view, showing that government creates mo…
Fundamental
Medium
Historical 1
01
The tally stick system was a medieval English government accounting method using notched wooden sticks as records of tax payments and debts…
Fundamental
Medium
International 3
01
EU treaty rules like the Stability and Growth Pact force member countries to limit government spending and debt, preventing them from using…
Fundamental
Medium
02
Trade deficits occur when a country imports more goods than it exports. From an MMT perspective, this means we receive more real resources …
Fundamental
Medium
03
Exchange rates determine how much one currency is worth compared to another. Under floating rates, the market sets the price and the curren…
Fundamental
Medium
Money & Banking 5
01
Government bonds are not borrowing tools for countries that issue their own currency. Instead, they serve as safe savings accounts for inve…
Fundamental
Medium
02
Banks don't lend out deposits—they create new money when they make loans by crediting borrowers' accounts. The money supply expands and con…
Fundamental
Medium
03
Central banks can set any interest rate they choose - they don't have to follow 'market rates.' The natural rate is zero because the govern…
Fundamental
Medium
04
The 'national debt' is actually private sector wealth - government bonds that citizens, banks, and institutions hold as safe savings. When …
Fundamental
Medium
05
Money exists in a hierarchy based on acceptability and backing. Government money (currency, reserves) sits at the top because it's needed f…
Fundamental
Medium
Policy Proposals 9
01
MMT shows governments with monetary sovereignty can fund large-scale climate programs without being constrained by tax revenue or deficits.…
Fundamental
Medium
02
Government uses its spending power to strategically build productive capacity in key industries like clean energy, semiconductors, or manuf…
Fundamental
Medium
03
The federal government can cancel student debt because it creates the dollars used to pay that debt. Unlike households, the currency-issuin…
Fundamental
Medium
04
Universal Basic Income (UBI) provides unconditional cash payments to all citizens regardless of work status. MMT economists often prefer ta…
Fundamental
Medium
05
A Job Guarantee is a permanent government program that offers employment at a living wage to anyone ready, willing, and able to work in the…
Fundamental
High
06
A comprehensive plan to address climate change through massive public investment in clean energy, infrastructure, and jobs. MMT shows that …
Fundamental
Medium
07
Automatic stabilizers are government programs that automatically increase spending during recessions and reduce it during expansions withou…
Fundamental
Medium
08
Fiscal space refers to a government's ability to spend without causing harmful inflation. For currency-issuing governments like the US, the…
Fundamental
Medium
09
When central banks raise interest rates, they're essentially providing income to people who already have money through higher interest paym…
Fundamental
Medium
Sectoral Balances 2
01
Sectoral balances show how money flows between the government, private sector, and foreign sector must always balance to zero. When governm…
Fundamental
High
02
When the government spends more than it taxes, that extra money flows into the private sector as savings, bank deposits, or business profit…
Fundamental
Medium