Sri Lanka’s Failed Experiment with Modern Monetary Theory

Sri Lanka’s Failed Experiment with Modern Monetary Theory link

• No sensible person wants to copy the big-spending policies of failed welfare states such as Greece.
• Unfortunately, many politicians lack common sense (or, more accurately, they are motivated by short-run political ambition rather than what’s in the long-run best interest of their nations).

So if they decide that they politically benefit by spending lots of other people’s money, they have to figure out how to finance that spending.
One option is to use the central bank. In other words, finance big government with the figurative printing press.
This is what’s know as Modern Monetary Theory.
From a theoretical perspective, it’s crazy. 

And if Sri Lanka is any indication, it’s also crazy based on real-world evidence.
In an article for The Print, based in India, Mihir Sharma looks at that government’s foolish monetary policy..."