MMT and Warren Mosler: A New Ontology of Fiat Money

This article provides an in-depth analysis of Warren Mosler's Modern Monetary Theory (MMT), challenging traditional understandings of public finance. The author explains that the state, as a sovereign issuer of currency, is not subject to the budget constraints typical of households. A key element of the argument is the ontology of fiat money, which functions as a tax credit. The text details the mechanism by which taxes drive demand for currency rather than being used to finance government spending. The reader will learn about the concept of IRMA, the principles of the banking floor, and how reserve management affects interest rates. This is essential reading for those seeking to understand the operational reality of contemporary central banking and fiscal policy, beyond the moral folklore of public debt and the constraints imposed by outdated economic paradigms that dominate public debate.