MMT can’t increase or decrease demand.

It is true that MMT recognizes the risk of inflation, but it assumes that the inflation genie can only get out of the bottle when the economy reaches full employment. But even then we should not worry, because in this case the government can easily reduce inflation by increasing taxes. Here come a few questions. First, when will it be known that the economy has achieved unobservable potential output and it is time to increase taxes? Second, why would an increase in taxes, which is transfer of money from the private to the public sector, halt inflation with the money supply unchanged? Third, what about asset price inflation and exchange rate depreciation? What about all the controversies about the Philips curve? And last but not least: why should we believe that government with unlimited monetary sovereignty will stop printing money and politely increase unpopular taxes as soon as the inflation rate exceeds an arbitrarily determined value?

Finally, I would like to point out another worrying shortcoming of MMT: it seems to mistakenly identify money with capital. It is true that the state has potentially extraordinary power to print money, but money is not real capital. Banknotes or electronic records are not real wealth — they are means of exchange, as Hume or Smith have already pointed out. Only the quantity of goods and services that we can afford is important. The government can pump any amount of money into the economy — but it cannot remove the fundamental scarcity of resources and magically create new goods. Supporters of MMT complain about the scarcity of goods — but this does not stem from class interests. It is a fundamental problem of economics and its raison d’etre. The increase in money supply does not solve this problem. Inflation and the accompanying Cantillon effect ultimately only redistribute resources from one group of people to another.