Simone Smith
The Modern Monetary Theory (MMT) poses enormous risks to the Canadian economy,finds a new study released today by the Fraser Institute, an independent, non-partisan, Canadian public policy think-tank. Where MMT has been tried in the past, it has resulted in inflation, sometimes even hyper-inflation, with devastating consequences for domestic economies. An example of this was the implementation of MMT in Latin America and Greece resulting in runaway inflation and a significant decline in standards of living. Is this what is in store for Canadians?
Advocates of MMT assert that a government that issues its own currency (like Canada and the United States, among others) cannot default on debt issued in its sovereign currency because it has the power to print as much currency as needed to pay off the public debt.
During the COVID-19 crisis, Canada’s central bank financed historically large shares of government bonds to encourage lending and investment—a practice described as Quantitative Easing. If the Bank of Canada does not require the government to repay that debt once it matures, Quantitative Easing will have evolved into MMT.
The Bank of Canada is facing an imminent test of its credibility and independence over the coming months, and the question is, how will this affect the citizens of this great country?
Demand answers from your government.
