20 Simple Points to Understand MMT

The Money Story

1. The state desires to provision itself.

2. The state imposes tax liabilities payable in its currency as the tax credit

3. This results in sellers of goods and services (unemployment) seeking state currency.

4. The state then makes its desired purchases.

5. Taxes are paid and bonds purchased. What Happens to State Spending?

6. After the state spends, the private sector has only two choices

7. Use the money to pay taxes, in which case it’s removed from the economy

8. Don’t use the money to pay taxes, in which case it remains in the economy until it is used to pay taxes

The Public Debt

9. The public debt is the funds spent by the state that have not yet been used to pay taxes

10. It constitutes what is best thought of as the net money supply of the economy

11. A growing economy is expected to include a growing net money supply


12. Taxation, by design, causes unemployment

13. Unemployment is the evidence the state has not spent enough to cover the need to pay taxes and the desire to save

14. If the state doesn’t spend enough to cover the need to pay taxes and desire to save, the evidence is unemployment

Reversing Unemployment

15. Unemployment is the evidence that the state’s tax policy caused more unemployed than the state has hired

16. The state has the option to reduce the tax liabilities or get the unemployed hired through increased public spending

The Job Guarantee

17. Tax liabilities created more unemployed workers than the state wanted to hire

18. Business resists hiring the unemployed and prefers hiring people already working

19. The JG facilitates the transition from unemployment to private sector employment

20. The JG is a superior price anchor vs unemployment

These first appeared on slides presented by

Warren Mosler at the Gower Initiative of Modern Money Studies.

What causes Bad Behaviour?

Over the years most of us have become familiar with Maslow’s Hierarchy of Needs.


At the most basic level to survive we need food, water, rest (physiological), shelter, warmth and security/safety (Safety). These are the most basic needs. We also need to have friends, the feeling of belonging and social engagement and the feeling of accomplishment and achievement (Esteem). These are the love/belonging and self-esteem parts of the pyramid. Without any of these, one cannot achieve one’s full potential of self-actualisation.


This is why many of the things mentioned in other articles here are specifically about social inclusion and engagement. These are the things in society that when individuals go without causes mental and physical health problems and from there can lead to bad behaviour.


Unemployment, especially long term unemployment can lead to social exclusion and thus alienation that can cause social problems. These all affect economic and social outcomes for society at large.


  • loss of current output;
  • social exclusion and the loss of freedom;
  • skill loss;
  • psychological harm (mental health);
  • ill health and reduced life expectancy (anxiety and drug use);
  • loss of motivation (a sense of rejection, lack of self esteem);
  • the undermining of human relations and family life;
  • racial and gender inequality; and
  • loss of social values and responsibility.

All of these can lead to crime whether it be break-ins, malicious damage, immediate need for a natural high (e.g. taking a car for a joyride) or a drug-induced high just so the person ‘feels normal’. All the stresses of life don’t matter when you do these things. Unfortunately, they can have negative effects on society at large. It leads to family breakdowns, suicide, assaults and much more. It is not just unemployment that causes these. For whatever reason, whatever traumas that have been suffered, these people do not feel safe or like they belong so they end up causing harm to others. All these people want to do is feel valued.


Food, shelter and belonging can begin the healing of bad behaviour. Integration with social norms will encourage the belonging and decrease the bad behaviour. Allow them the courage to tell their story, to form a connection with you and have compassion and understanding for their situation and they will feel valued.

Courage Compassion Connection