Lots of people have been talking about how modern monetary theory (MMT) means that the USA can 'print money' (increase the money supply) without fear of inflation.
That can't possible be it. There must be some consequence to increasing the supply of money. I don't admit to knowing what that consequence is but there is no way the story is, "we make more money. the end"
MMT holds to the orthodox monetary view that inflation/deflation result from expansion/contraction of money supply relative to output. MMT, despite its name, is quite orthodox in monetary theory.
Where it is (somewhat, though most orthodox voices I think would concede this point if cornered and unable to talk around the question) unorthodox in description is in theory of government finance, as it holds that fiscal constraints are a fiction (for a government operating in its own fiat), and that the only real constraints on government spending and its relation to taxes are not fiscal limitations of a finite purse but the monetary effects of money creation by spending and money destruction by extraction via taxes, etc.
But the real conflict between MMT practitioners and orthodox economics doesn't even seem to be on the empirical, descriptive elements of economic theory, but prescriptive/normative elements of policy recommendations made by adherents to the theory.
It does say that the government that controls the currency (monetary sovereignty) never has to default.
I think people may be mixing up the increasing popularity of MMT with the idea that we have been "pumping money into the economy" for years without the official measures of inflation ticking up much, at least until very recently.
I don't think the average person buying cars, trying to rent/buy housing, or send their kids to college would agree with the official narrative of low inflation however.
I think the caveat is that politicians can supply money into the economy (increase their chances of re-election), but will be reluctant to raise taxes in an effective way (to not decrease their chances of reelection).
In any non-American 'monetary sovereign' country, printing too much money will crash the exchange rates (this is not merely a consequence of inflation - some of the processes involved are independent). It's a slightly different casual mechanism than the neoclassical one, but still the result is a de facto government default.
The USA however holds the world's reserve currency, and the normal restraints indeed don't apply anywhere as much. This however does not mean there are no restraints. Fortunately the country has never gone full MMT, so we'll never find out empirically.
