/biz/ - Business & Finance

Its actually a great documentary. Basically the premise of modern monetary theory is that {government deficit} = {private sector surplus}, as shown in pic related. So, the government deficit actually reflects everyone else's savings. Therefore deficits are not bad in a fiat based monetary system. Its a great theory with alot of truth to it, however it does not propose solutions that most people would find acceptable. The documentary identifies the real problem as capital inefficiency, and correctly identifies huge capital inefficiencies in areas like healthcare and finance, and it is correct that government should resolve those capital inefficiencies. However, it ignores that it was government that created these capital inefficiencies. It essentially calls for more government involvement in allocation of capital while ignoring the fact that government is absolutely incompetent in its capital allocation when compared to the private sector. Can the government do better at capital efficiency? Yes, in theory it can allocate capital more efficiently than the private sector. A philosopher king could run the most efficient government ever. Greek philosophers identified this fact ages ago. However they also recognized that ideal situation was unlikely to be obtained over much worse scenarios with a king, and therefore believed a democracy was preferable. And in democracies capital inefficiency is almost a forgone conclusion when you have government intervention.