We are all MMTers (Still)

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I don’t think it would be especially insightful for us to point out that everybody knows everybody knows stimulus talks are what market participants are paying attention to. At this point, I think the idea that this is Common Knowledge is, well, common knowledge.

We did, however, think that it would be interesting to see how different patterns of language were more or less common among stimulus-related news reports. In other words, we thought it would be fascinating to see which Fiat News expression of “what the stimulus is really about” was the most connected and which was the least.

The network graphs below – produced using software from our friends at Quid – show articles referencing “stimulus” language since October 1. A dot is an article. A “cluster” designated by color and proximity indicates highly similar language, as does a line between two dots. North/south and east/west have no meaning other than proximity. The most connected dots and clusters are those which demonstrate the most similar and connected language. For each graph below, the bold-faced lines and dots reflect those which also reference the language of a range of secondary topics (e.g. families, the unemployed, markets, etc.) as highlighted in the graph’s title.

Fiscal Stimulus is About American Families

Source: Quid, Epsilon Theory

Fiscal Stimulus is About Small Businesses

Source: Quid, Epsilon Theory

Fiscal Stimulus is About Financial Markets

Source: Quid, Epsilon Theory

Fiscal Stimulus is About the Unemployed

Source: Quid, Epsilon Theory

If I were to ask you, “In which of those graphs does it feel like the bold-faced dots and lines are the most connected to the overall structure of the graph”, I suspect I could account for most of the answers with one of the following:

1) They all seem pretty close; or

2) Maybe the “About the unemployed” map by a little bit.

And that’s correct. Qualitatively, which is to say intuitively, and quantitatively, based on our measures of Narrative attention. In short, there are a LOT of missionaries out there trying to tell you what prospective stimulus is about and what other parties are trying to make it about. It hasn’t coalesced into a single narrative structure, so far as we can tell.

But what is fiscal stimulus absolutely, positively not about? If you answered any of “the deficit”, “the debt”, “small government” or “the budget”, you are today’s big winner.

Fiscal Stimulus is About the Deficit

Source: Quid, Epsilon Theory

When (or, y’know, if) the election concludes peacefully and the turn of the calendar arrives, you will read a lot of predictions about what from this insane dumpster fire of a year will become an essentially permanent feature of our world. Want a sure bet?

It’s this.

It’s budgets-don’t-matter-anymore-for-countries-who-can-print-currency narratives.

It’s MMT from either party and both at once, from capitalists and anti-capitalists alike.


  1. This alternate reality reality was pointed out by ET thru another Quid screen about 2 years ago. I think it was “The Dog That Didn’t Bark”. I had noticed during 2018 that no one ever seemed to mention the growing deficit as the Tax Cut exploded it. That post awakened the power of Narrative to drive behavior for me. Any thoughts from the Pack about which Missionary finally says the obvious, and hurtles this Narrative into the abyss?

  2. Avatar for bully bully says:

    As I recall, the last President that talked seriously about the deficit was Ronald Reagan, and he was an actor by trade.

  3. Avatar for rguinn rguinn says:

    But there was still at least theatre around, say, the debt ceiling, balanced budget amendments etc. for many years thereafter.

  4. An adjacent point to this note would be the following observation:

    As Ben noted back in 2016, Trump breaks us because we changed from a cooperation game to a competition game. But additionally, Trump allows others to break us in the future by devaluing a former currency once held as electorally important, namely consistency. John Kerry was absolutely savaged because of his Iraq War flip-flop. In a race as close as that one you could argue it cost him the election. By today’s standards that line of attack seems quaint. So now with consistency being valued at a lot less the politicians who would have formerly been against a print-our-way-out approach have almost no incentive to hew to that ideology. Certain things have very little credible opposition left, and MMT will soon be one of them. Sure, in 2022 when the Harris administration uses it as the reasoning behind some spending program the usual cast of characters will object, but given the power to magically conjure anything they want will be too tempting when they’re eventually back in charge. A decade from now the anti-MMT crowd will be made up of a dozen Libertarians working at Cato and the six remaining pro Ron Paul bloggers left alive. It’ll be just another fixture in economic life. Us late Gen-Xers and early Millennials will sit around a carbon-neutral campfire and reminisce about the times before Jay Powell’s face was on the $250 bill.

  5. I’m not sure there will be a Missionary that says “Stimulus” should be called “Debt Support”, “V” looks more like “L” or “K”, or in my best Inigo voice “QE, I don’t think it means what you think it means.” Deficits, Debt and QE are now permanent fixtures, trying to extinguish any one of them would cause capital destruction. It feels like the Missionaries (Central Banks, Government) parade out daily telling us to get on the inflation/MMT train. Was the GFC of 2007/8 an event rather than Missionary driven?

  6. Avatar for mckett mckett says:

    damnit, why did I waste all that time studying Keynesian economics… I could have skipped 50% of it and developed a new hobby or something

  7. Avatar for mckett mckett says:

    the smartest man I knew (RIP) used to tell me that we shouldn’t obsess about the deficit so much as “we owe it to ourselves.” This may have been true back when he said it but the ever growing scale of foreign owned IOUs may have made him rethink things

  8. “The problem with gravity is that it always works.”

    “The story of Pandora’s Box is much more compelling if the protagonist had no choice but to open it.”

    MMT, to me, sounds like a relatively fringe theory latched on to by economists trying to Narrative Control the Pandora’s Box of QE. The narrative being that “We are in control.”

    And in many ways they do have control, but when push comes to shove their only recourse is more stimulus. That was the price of QE, for better or for worse.

    We are all in agreement that this is the new reality. The difference is whether or not you believe that the economy has hit escape velocity. Because gravity always works, every time, no matter how many clever tricks we’ve pulled to keep the ball in the air.

  9. According to the Betting markets, it appears that either Brainard or Yellen will be Biden’s choice for Treasury Secretary. Now Fed officials will meet with Former Fed officials to figure out how much to spend? Is there a more clear signal that Biden plans to “Just Print Money” to support massive Budget Deficits?
    That somehow the crackpot economic theory MMT (Magic Money Tree) has become conventional wisdom?
    How is this possible?
    Simple expedient short term thinking by career Politicians? (If so, then Term Limits!)
    Since Academics dominate the Federal Reserve system, is this a function of a deluded Left Wing Academia cranking out thousands of PhDs in Economics, that tolerates no diversity of “thought”? (If so, then Defund Academia !)

    But why don’t the younger generations resist? They are the ones to face the bill.
    Even if the bill comes in the form of INFLATION

Continue the discussion at the Epsilon Theory Forum

2 more replies


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