• the_kid@hexbear.netEnglish
        12·
        1 year ago

        I don’t get the point of these comments. all I was saying was that MMT describes monetary policies in countries with sovereign currencies.

        then everyone jumps down my throat going “well actually because of imperialism, there are reasons countries don’t have sovereign currencies”. ok? I clearly understand that, just don’t understand what it has to do with MMT. like I said above, MMT is not a politics, I’m not running around condemning Bolivia for not doing MMT. it’s just a helpful description of how monetary policies work in countries with sovereign currencies, that’s all.

    • Kaplya [none/use name]@hexbear.netEnglish
      12·
      1 year ago

      This is true, but the complication with developing countries (and I believe this is what the person you’re replying to was implicating without elaborating) is that more often than not, these countries also take on foreign loans, usually denominated in dollar.

      If you take on a huge sum of dollar debt, this effectively limits the fiscal space of countries even with monetary sovereignty, because institutions like IMF will often impose demands like austerity measures (e.g. “cut back fuel and electricity subsidies”) to limit net public spending. You don’t follow the rules, you don’t get the loan, and your people starve.