Now the piece of arithmetic that does more work than any theory. For every sector in the economy, one party's spending is another's income. Add up the government, the domestic private sector, and the rest of the world, and the three balances must sum to zero. #MMT

Week two, in one line: the plumbing doesn't work the way the budget speeches imply. Spending is a keystroke, tax is a deletion, bonds are an interest-rate tool, and banks create money when they lend. None of this is contested by the people who run the system. #mmt

Which means the "money multiplier" you were taught — banks lending out a fraction of reserves — has the causation backwards. Banks lend when they find a creditworthy borrower. Reserves follow. The central bank accommodates. Money is #endogenous: it responds to the economy. 1/2

#MMT All 12 cards in one image: 12 Analytical Entry Points for Modern Monetary Theory. Eleven entries on how the system works and what follows from it. One on what it is for. The numbers in circles on each card show the related entries, so you can start anywhere and follow the links. 1/9

The Myth of the Inflation Dragon vs. The Reality of the Interest Ledger The dragon is made of paper. The money is 'real', and it only flows one way.Who Gets to Name the Dragon?Economics is a struggle over meaning, and this mo... https://darrenquinn.substack.com/p/the-myth-of-the-inflation-dragon

#MMT Card 12 of 12, Public Purpose and Public Coordination, on a black background with yellow accents and a ballot-box icon. Labelled: Settled by politics.

Banks don't lend out your deposits. When a bank writes you a mortgage, it creates a new deposit in your name and a matching loan asset. The money didn't exist that morning. The Bank of England said so plainly in 2014. Loans create deposits, not the other way round. #MMT and many others

"Government debt" is a column in an account. Flip to the other side, and it's private wealth: superannuation holdings, bank assets, savings. Every dollar of the debt is someone's asset. You can't pay it all down without taking that wealth off someone. #MMT

#MMT Card 11 of 12, Endogenous Money and Credit. Icon: An arrow runs down from a government box to a two-way arrow between two banks, marked V for vertical and H for horizontal. Banks create money, constrained by capital and collateral, not reserves. 1/4

This cause is close to my heart - please sign: petitions.getup.org.au/petitions/th... @getup.org.au

The RBA hurts Australians. We deserve better.

Australians are at a breaking point. We cannot afford to pay the price for an inflation management tool that was never fit-for-purpose and most importantly is hurting everyone who works for a living.

petitions.getup.org.au

#MMT Card 10 of 12, Price Level and Currency Value. Six forces shape the price level and currency value, shown as labels: Government pricing, tax obligations, institutions, real resources, expectations and power. 1/5

When Smart People Can’t Finish the Sequence Three attempts. Three collapses. The diagram isn't the problem; the frame around it is.G'day, Everyone.I've got a lot of respect for Jared Bernstein. https://darrenquinn.substack.com/p/when-smart-people-cant-finish-the

Government bonds aren't borrowing in the household sense. When Canberra spends, reserves pile up in the banking system. Selling bonds swaps those reserves for an interest-bearing asset. It's a monetary operation to manage the cash rate, not a hunt for funds. #MMT

#MMT Card 9 of 12, Job Guarantee as Anchor. A standing public offer of work at a fixed wage. It answers directly the unemployment that tax-driven money leaves behind. Labels: Automatic stabiliser, price anchor, buffer stock. A diagram shows two equal bars.

The RBA is the government's bank. #MMT The separation between Treasury and the central bank is a rule we wrote and can rewrite — real in its effects, but institutional, not financial. No law of economics requires it. Knowing which constraints are self-imposed matters.

What happens when the Commonwealth pays a nurse? Treasury instructs the RBA. The RBA credits the nurse's bank's reserve account, and the bank credits the nurse. Numbers are marked up. Nothing was taken from anywhere first. That is the operation, not a metaphor for it. #MMT

Week one, in one line: the Commonwealth doesn't need your tax dollars to spend, because your tax dollars came from its spending in the first place. #MMT The household analogy fails not at the margins but at the premise. Next: what actually happens when Canberra spends.

So why tax at all? Four reasons, none of them funding. #MMT It creates demand for the currency. It withdraws spending power when the economy is running hot. It reshapes distribution. And it discourages things we want less of. Those are real jobs. "Raising revenue" isn't one.

#MMT Card 8 of 12, External Sector and Policy Space. For monetary sovereigns, external deficits are not inherently constraining. Persistent imbalances may signal structural issues. Points: Exports are real costs. Imports are real benefits.

#mmt Card 7 of 12, Inflation Management: Plural Tools. Combine fiscal, regulatory, industrial-policy and institutional tools, coordinated to the specific drivers and their distributional impacts. Match the tool to the diagnosis. A table pairs each driver with a tool. 1/4

#MMT Card 6 of 12, Inflation: Multi-Causal and Contextual. Icon: A thermometer and a magnifying glass. Inflation has multiple, interacting causes and distributional impacts. Measurement is imperfect and context-dependent: It needs plural indicators and careful diagnosis.

The Myth of the Deficit Dial vs. The Reality of the Buffer Stock Turn the dial all you like. It's the anchor that holds the boat.Who Gets to Define What MMT Is?Economics is a struggle over meaning. https://darrenquinn.substack.com/p/the-myth-of-the-deficit-dial-vs-the

Card 5 of 12, Unemployment and Demand. Icon: Three people, the third drawn only in dashed outline. Unemployment signals insufficient spending. Fiscal policy should be used to achieve full employment, within real resource limits.

When you pay tax, the money doesn't go into a vault to be spent later. Your bank account is debited, and the reserves are extinguished. Tax destroys currency. Spending creates it. The Commonwealth is not a piggy bank being filled and emptied. #MMT

#MMT Card 4 of 12, Deficits, Surpluses and the Function of Tax. Icon: A tap labelled "spend" fills a bucket that drains through a pipe labelled "tax". Taxes do not fund spending. They release real resources by regulating non-government purchasing power.

A question worth sitting with: before the Commonwealth had ever spent a single Australian dollar, where would anyone have got the dollars to pay tax in them? They couldn't have. Spending comes first. It has to. The sequence is not a preference, it's a logical necessity.

#MMT Card 3 of 12, Monetary Sovereignty. Sovereignty is anchored in the state's power to impose taxes, which drives demand for the currency. An issuer with a floating exchange rate faces no financial constraint on spending, only real and chosen institutional limits.

This is why NSW really can run out of money and the Commonwealth cannot. The states tax and borrow in a currency they don't issue. Canberra issues it. Comparing the federal budget to a household budget isn't a simplification — it's a category error. #MMT

The Myth of the Microfounded Model vs. The Reality of the Currency Monopoly A central bank's prize, for the theory of central banking.A Ceremony With a Gold MedalEvery economy runs on a tension between Ceremonial habit (the... https://darrenquinn.substack.com/p/the-myth-of-the-microfounded-model

#MMT Card 2 of 12, Real and Ecological Limits. Icon: A wind turbine and a tree. Spending is constrained by real and ecological limits, not financial ones. Inflation and resource use, not deficits or debt, are the key risks.