As readers of this blog know, MMTers like to begin the analysis by consolidating the central bank and treasury because it simplifies the analysis. We then argue that this consolidated "government" spends by crediting accounts ("keystrokes") and taxes by debiting them. Deficit spending thus leads to net credits of bank deposits as well as bank reserves. Bond sales offer an interest-earning alternative to zero (or low) earning reserves.

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Paul closed his talk with an appeal. He noted that MMT gets all this right. It foresaw the Global Financial Collapse. It predicted the current crisis of Euroland, providing the correct prognosis of the fatal flaws of divorcing fiscal policy from currency sovereignty. And it predicted that the first serious financial crisis would create an insurmountable EMU crisis. Only a thorough reformation to unify fiscal policy and currency sovereignty will save the project of integration.

So, Paul asked, why not simply declare victory? Be magnanimous toward all those who got it wrong. No need to rub their faces in their mistakes and the mess they've made. Welcome them aboard.

We're all MMTers now!