The governments of the world are spending trillion upon trillion of newly invented money. Just like that Modern Monetary Theory says they should:
Governments were caught out when Covid-19 hit, having overlooked the need to be able to test for new diseases because they were focused on drugs and vaccines for those they already knew about.
Now there are fears that the rush to supply wealthier countries pressing for more tests may destabilise the fight against HIV, malaria and tuberculosis, illnesses that kill millions, mostly in low- and middle-income countries.
“Some companies are planning to reduce or stop malaria, HIV and TB test production,” said Dr Catharina Boehme, the chief executive of the Foundation for Innovative New Diagnostics (Find) and an adviser to the World Health Organization. “They are shifting their production to Covid-19 tests.”
Oh dear. But a nice lesson in the fact that it’s not money that matters. It is the ability to do something, the productive capacity that does. Printing more pieces of paper doesn’t change the basic economic truth, we’re in a world of limited resources and there are opportunity costs – if we do one thing then we can’t another – to whatever it is that we decide to do.
MMT doesn’t change that basic problem in the slightest.