Modern Monetary Theory: Money Printing or Mirage?

Printing money to spend: the theory challenging taxes

The states that issue their own currency do not need to collect taxes before they spend. This is the central premise of Modern Monetary Theory (MMT), advocated by Eduardo Garzón. According to this current, taxes do not fund public spending; their function is to withdraw money from circulation to control inflation and redistribute wealth.

The analogy of the counterfeiter who makes his own signatures is suggestive: he does not need to collect them in order to sign more.

The price of the printer: inflation and trust

But the objection is immediate: who accepts printed notes without backing? Trust in currency is the true foundation. A seller will only accept those slips of paper if they believe others will accept them. The Argentine case is cited as a warning: when the state prints without restraint, citizens flee to the dollar and inflation erodes the currency.

However, some point out that money is continuously created: the ECB prints and private banking creates money by issuing mortgages. So, is it merely a matter of who controls the printer?

The most uncomfortable answer points to production: a country's value lies in what it produces, not the paper it issues. Meanwhile, debt sustains the system, and GDP might be more fiction than reality. The final question remains open: are we facing a system sustained by a tolerable lie, or an uncomfortable truth that we prefer to ignore?