Modern Monetary Theory (MMT) is an economic framework that asserts that governments with sovereign currency systems—those that issue their own currency—cannot go bankrupt in their currency and should thus freely increase spending to promote economic stability, employment, and social programs. This theory suggests that government debt, rather than being inherently problematic, is a tool for managing demand, and that deficits are not harmful as long as inflation remains controlled. MMT emerged in the 20th century, gaining recent attention among policymakers and economists as an alternative to traditional fiscal policies, especially in times of economic recession.
History and Ideology of MMT
MMT has its roots in the 20th-century theories of economist John Maynard Keynes, who argued for active government intervention to counteract economic downturns. MMT expands on Keynesian ideas by asserting that governments should use their ability to create money for economic and social goals, such as achieving full employment or funding large-scale programs. Proponents of MMT believe that a government with a sovereign currency system can finance public services and welfare programs simply by issuing currency rather than relying solely on tax revenue or borrowing. Therefore, in this view, government spending is virtually unlimited as long as inflation is controlled, as the currency issuer cannot technically default on debt in its currency.
The ideology of MMT treats government spending as a primary driver of economic stability and welfare. It challenges conventional wisdom that fiscal responsibility involves keeping deficits and debt under strict control. MMT advocates for government control over the economy, positioning public spending as a means of directly shaping societal outcomes, redistributing wealth, and ensuring full employment. This ideology views the government as the ultimate financial authority and downplays the constraints that debt might impose on future generations or the broader economic system.
Implementation and View of Human Nature
MMT advocates implementing its ideology through significant increases in public spending, funded by issuing more currency, and asserts that taxation’s primary role is not revenue generation but inflation control. Proponents suggest using MMT to fund large social programs like healthcare, universal basic income, or guaranteed employment. They argue that by managing demand through government spending and taxes, the state can achieve economic and social stability.
In its view of human nature, MMT assumes that people’s welfare depends primarily on economic conditions controlled by the state. By reducing economic activity to a matter of government spending, MMT tends to view citizens as economic units whose well-being hinges on state intervention. This perspective reduces individuals to their economic roles and relies on the state to determine what resources or goods are necessary for welfare. In doing so, it inadvertently places government authority as the solution to economic and social problems, minimizing the role of personal responsibility, stewardship, and the moral aspects of human activity.
Christian Critique of MMT
Christianity offers a fundamentally different approach to economics and human nature than MMT. First, while MMT prioritizes economic stability and full employment through potentially unlimited spending, Scripture teaches that wise stewardship and self-restraint are essential virtues (Proverbs 21:20). The Bible warns against excessive debt (Proverbs 22:7) and emphasizes living within means, underscoring that financial wisdom involves temperance, accountability, and trust in God rather than human systems. MMT, by contrast, places trust in human management of monetary policy as a near-limitless tool for achieving societal goals, neglecting the natural constraints of resources, inflation, and human fallibility.
Furthermore, MMT’s view that individuals rely on state spending for economic well-being downplays personal responsibility and initiative, concepts that are essential in Christian teaching. Scripture teaches that individuals are responsible to work and provide for their households (1 Timothy 5:8) and that they are to manage their resources as stewards of God’s gifts (Matthew 25:14-30). By reducing economic value to government spending, MMT risks fostering dependence on the state, which is contrary to the biblical emphasis on personal responsibility, mutual aid within families and communities, and the value of individual labor.
The Reductionism of MMT and Christianity’s Superior Answer
MMT’s reductionistic view of economics sees human flourishing as something that can be engineered through fiscal policy. By suggesting that human welfare is primarily a function of government spending and control, MMT overlooks the moral, spiritual, and relational aspects of well-being. MMT's approach to unlimited spending neglects the natural economic boundaries of resources and incentives, assuming that governments can simply “spend their way” out of problems. However, Scripture teaches that humans are not merely economic units; they are complex, moral beings created in the image of God, with needs that go beyond material prosperity (Genesis 1:27). True flourishing, according to Christianity, comes from a right relationship with God, loving one’s neighbor, and responsible stewardship of one’s resources.
Moreover, the Bible warns against the idolatry of wealth and power (Matthew 6:24), a subtle danger in MMT, which places nearly unrestrained economic power in the hands of the state. By making the government the ultimate provider, MMT risks turning the state into a functional savior. Christianity teaches that God is the true provider, and that earthly wealth is temporary and to be used responsibly (1 Timothy 6:17-19). In contrast, MMT’s emphasis on continual state-driven economic intervention can foster an unhealthy reliance on government as the answer to personal and societal issues, neglecting the Christian teaching that God, not the state, is the ultimate source of provision and security.
Practical Concerns and Real-World Consequences
In the real world, MMT has significant risks. History shows that excessive government spending and currency creation often lead to inflation, devaluation, and loss of trust in currency. Hyperinflation in countries like Zimbabwe and Venezuela, where governments printed currency to address economic crises, resulted in severe social and economic collapse. These examples underscore the reality that governments cannot indefinitely expand spending without consequences. MMT overlooks these historical lessons, assuming that inflation can always be controlled through taxation, an assumption that fails to account for the complexities of human behavior and economic forces.
In the United States, where government spending has dramatically increased in recent decades, concerns over national debt and inflation have grown. While not fully embracing MMT, the trend toward increased deficit spending and central bank intervention hints at similar risks. For instance, quantitative easing and stimulus packages have raised questions about the long-term effects of excessive spending and debt. These policies, while intended to stimulate economic growth, can inadvertently foster dependency on state intervention, erode fiscal responsibility, and place future generations under significant debt.
Many Progressive politicians claim that the government not only has the right but the responsibility to fuel economic growth and prosperity. Their approach? A cocktail of regulations, spending programs, and monetary manipulation. By pushing government spending to spark demand and drive consumer spending, they believe they can kickstart production, achieve full employment, and secure economic health—all while tackling a long list of social issues.
Modern Monetary Theory (MMT) takes this notion to the extreme. Its supporters argue that the government can purchase whatever it wants simply by printing more money, with no need to tax or borrow. In their view, deficits are a non-issue—just create more cash to balance the books. MMT advocates confidently proclaim they can tweak the economy like a machine, creating prosperity, fighting inflation, ending inequality, and even saving the planet, as if economic reality itself were at their command.
Conclusion: The Christian Response to Economic Stewardship
Christianity provides a balanced view of economics, rooted in both accountability and generosity. While government has a role in creating a just economic environment, ultimate reliance should be placed on God’s provision, not on state policies. The Christian approach to economics involves stewardship, responsible use of resources, and recognizing the limits of human authority. Jesus’ teachings emphasize trust in God and caution against wealth as a source of security, highlighting that economic activity is a part of human life but not its ultimate purpose (Matthew 6:19-21).
In sum, MMT offers an overly simplistic solution to complex economic issues, placing too much trust in government power to provide for human needs. In contrast, the Christian worldview offers a more realistic and hopeful answer by acknowledging human limitations, promoting wise stewardship, and affirming God as the true source of provision and purpose. This framework addresses humanity’s need for a responsible approach to resources and encourages trust in God rather than in limitless state intervention.