How To Profit In A Democrat-Led Economy

Democrats on the other hand historically opt for more spending and complex combinations of entitlements, higher taxes, and tax credits to nudge things in the preferred direction. Both parties pull different "strings," if you will, to get the economy and markets dancing.

Nowadays, however, the Democrats have Modern Monetary Theory (MMT) in their spending playbook.

Only, MMT isn't a theory anymore.

At one time, the "theory" sounded like so much hyperbole; Democrat presidential nomination contenders touted its merits in debates, and Republican orthodoxy knocked it as so much "bunk."

Of course, that was before COVID-19. That'what it took to turn MMT, or "a heterodox macroeconomic framework," into reality. Necessity is the mother of invention, they say.

This heterodox macroeconomic framework (which, in plain English, means "new, unproven economic theory") quickly became a kind of bipartisan answer to the pressing problem of "how do we get trillions of dollars to companies, individuals, and state and local governments?" You've heard the phrase "helicopter money?" Well, MMT is what went into the chopper's gas tank.

The simple premise of MMT is that any country that controls its own money can print whatever it wants to pay for whatever it has to, whether that's to finance a country's deficits or figuratively drop money from the skies from helicopters.

Pushback on MMT generally comes from fiscal and economic conservatives. They make the case that printing money to finance spending – especially massive amounts of spending – comes with steep downside, like inflation, currency devaluation, and mushrooming deficits – all the boogeymen that keep conservative economists up nights.

Of course, in the grips of a deadly, economy-crushing pandemic like COVID-19, there was just no time to debate how to raise money to throw at all the country's snowballing economic problems.

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