“The idea that deficits don’t matter as long as you have your own currency is just wrong. In a world of scarce resources, someone always pays.”- N. Gregory Mankiw

Some are calling recent political events America’s “socialist moment,” as many libertarians have been predicting for a generation that this surge would occur. The current “socialist moment” is not a sudden ideological rupture, but the inevitable consequence of a century of institutional erosion driven by a bloated interventionist state.

For decades, the federal government has systematically distorted the market through central bank manipulation of interest rates, predatory tax structures, and massive corporate bailouts that insulate favored industries from the discipline of failure. By continuously replacing genuine market competition with bureaucratic management and state privilege, mainstream politicians created a rigged economic landscape that stifles upward mobility while shielding the politically well-connected. The average citizen, feeling the real sting of this state-induced economic stagnation but unable to diagnose its statist roots, has been conditioned to look to the government for relief—meaning the very welfare-warfare state that broke the economy has successfully manufactured the public frustration required to sell socialism as the cure.

The Democratic Socialists of America (DSA) experienced an explosive resurgence following Vermont Senator Bernie Sanders’ 2016 presidential campaign and a secondary membership surge after the 2024 presidential election, growing from a minor political entity of roughly 6,000 members into a prominent left-wing force exceeding 100,000 members nationwide. The organization’s primary strength is concentrated in major urban centers and progressive coastal hubs—most notably through its largest chapter in New York City (which accounts for over 10% of national membership), alongside substantial footprints in Chicago, Los Angeles, Boston, Minneapolis-St. Paul, and Washington DC. Its membership is predominantly composed of Millennials and Generation Z, creating a distinctly youth-driven, activist base largely under the age of 40.

This growth is fueled by deep-seated economic and political disillusionment among younger generations. Specifically, a profound frustration with the perceived failures of mainstream center-left incrementalism following the Great Recession, mounting economic anxiety driven by stagnant real wages and soaring housing and education costs, and a growing conviction that institutionalized capitalism cannot adequately address perceived systemic crises like income inequality and climate change.

Unlike traditional political parties, the DSA functions as an activist organization rather than a ballot line. Most elected DSA candidates run as progressives within Democratic Party primaries or participate in non-partisan local elections. Over 90% of the more than 250 Democratic Socialists of America (DSA) members or DSA-endorsed individuals holding elected public office were first elected after 2019. Their influence within the Democratic Party is growing daily as evidenced by the party’s dramatic shift toward endorsing candidates inhabiting the radical left.

This recent emergence of the DSA as a notable political force has brought the tenets of their economic methods known as Modern Monetary Theory (MMT) from the academic fringe to the center of legislative debate. MMT proposes that a government’s ability to print its own currency eliminates the traditional constraints of tax revenue and debt. In effect, the government’s only constraint on spending is how fast it can create money. The functioning alliance between the DSA and the Democratic Party represents a fundamental shift in fiscal philosophy for a major party and a somewhat frightening future for the economy.

Of course, it is too simple to just blame the DSA for the trend to acceptance of  Modern Monetary Theory. The ground for MMT’s rise was meticulously plowed by decades of mainstream political behavior that effectively separated government action from economic reality. For generations, politicians on both sides of the aisle overpromised entitlements and weaponized both tax codes and deficit spending to win election cycles, always assuring voters that the bill would never come due. When a public watches its leaders routinely pass multi-trillion-dollar omnibus bills through raw debt expansion without the sky falling, the traditional warning that “we cannot afford it” begins to sound like an empty political excuse rather than an unyielding mathematical truth. MMT didn’t create the delusion of an infinite fiscal fountain; it simply codified the bad habits of mainstream politicians into a formal academic doctrine, giving an intellectual green light to the very overspending that got us here in the first place by promising that the printing press could permanently replace fiscal discipline.

The Democratic Socialists of America’s embrace of MMT is a strategic adoption. Because it provides a rigorous, macro-stabilization framework that effectively removes the standard fiscal constraints from public discourse, it becomes a strong political weapon. By asserting that a currency-issuing sovereign nation cannot “run out of money” and that federal spending is limited by real physical resources rather than tax revenue, MMT eliminates the conventional “how are you going to pay for it?” barrier. This enables democratic socialists to bypass classical budgetary objections and confidently champion capital-intensive, transformational reforms—such as a Green New Deal, Medicare for All, and a federal jobs guarantee—redefining national debt not as an existential threat, but as a mechanism to mobilize idle resources and eliminate underemployment.

The core arguments of MMT include:

• When the U.S. Treasury pays interest to an American bondholder or a pension fund, the money stays within the domestic economy. It is viewed only as a shift from the “public pocket” to the “private pocket.” As they see it the nation only owes the money to itself.
• In accounting terms, every government liability (a bond) is a private-sector asset. Therefore, increasing the debt simultaneously increases the private sector’s “wealth” in the form of Treasury securities.
• Since the government issues the currency it borrows in, it cannot “run out” of money to pay back domestic creditors. This distinguishes it from a household or a business that must earn income to service debt.
• Historically, the need to tax or borrow to fund government projects acted as a natural political check on state power. If a government wanted to launch a massive new program, it had to explicitly convince the public to hand over their wealth via taxes, or compete for capital in the bond market. MMT explicitly removes this “straightjacket” by telling lawmakers they can spend without worrying about deficits,

Legitimate economists across the ideological spectrum reject MMT, frequently characterizing it as “Magical Monetary Thinking” or just plain “nonsense.” The core scientific critique is that printing money to endlessly fund massive deficits does not eliminate the fundamental economic law of scarcity; instead, it merely transforms the explicit legislative cost into an unlegislated, highly regressive inflation tax on the populace. By forcing the central bank to subjugate monetary policy to the Treasury’s spending wishes, full debt monetization would cause an exponential expansion of the monetary base, triggering severe inflation in both asset and goods markets, destabilizing exchange rates, and decimating the currency’s purchasing power.

MMT advocates acknowledge that inflation is the ultimate limit on spending. Their proposed solution, however, is what truly alarms libertarians: if the economy overheats, MMT suggests the government should use targeted taxes, price controls, or rationing to cool it down. This is the definition of authoritarian central planning. The state would not only print the money, but it would then micro-manage the entire private sector—deciding which industries get resources, capping wages, or raising taxes on specific groups—to manage the economic fallout of its own printing press.

MMT also erroneously assumes that the money used to buy government debt would have otherwise sat idle. In reality, capital is finite. When the government borrows “from us,” it is pulling capital away from private investment. If a billion dollars goes into Treasury bonds, that is a billion dollars not going into venture capital, new factories, or private research. This is long known as the “Crowding Out Effect.”

By treating the nation as a single, collective “we,” the theory bypasses the ethical implications of intergenerational debt. From a property-rights perspective, the “we” logic masks a mandatory transfer of future labor. If a government spends money today and leaves the bill for thirty years from now, it is essentially pledging the future income of citizens who have not yet been born or are not yet of voting age. This is a form of “fiscal conscription.” It assumes that the state has a prior claim on the future output of its citizens to cover the costs of past consumption.

MMT assumes that all government spending is a public good that benefits everyone equally. However, much of the debt-funded spending may go toward projects that are inefficient or provide no long-term value. A citizen thirty years from now may be forced to pay higher taxes to service debt used for a project that has long since failed or a program they do not use. In this view, the government is seizing private property (assets) to pay for “ghost benefits.” Additionally, if the “cost” is pushed to an anonymous future generation, current politicians and voters have an incentive to spend beyond their means. This shifts the burden of “acting responsibly” away from the present actors and onto those who had no part in the original transaction, which any true ethical framework would define as an act of injustice.

Ultimately, while current political administrations use standard Keynesian models to falsely justify large deficits, they still pay lip service to the idea that debt is something to be managed. MMT throws that caution out the window. Progressive politicians are embracing an unstable doctrine that mistakes accounting identities for wealth creation, ignoring the inevitable inflation and malinvestment that follow when money is uncoupled from productive economic output.

For anyone who believes in individual liberty, limited government, and the natural laws of free markets, MMT and the people who profess it represent the final step toward total state control over the economic life of the individual. Clearly the best way to eliminate MMT from economic discussions is to return to the basics of the free market. Austrian economists Ludwig von Mises and F.A. Hayek both fundamentally agreed that stripping the state of its monetary monopoly is the only definitive cure for government-engineered inflation. Mises championed the gold standard as an unyielding, market-determined anchor that prevents politicians from manipulating the money supply, viewing sound money as a crucial safeguard for human liberty. Hayek took this logic to its ultimate conclusion in his groundbreaking proposal for the denationalization of money, arguing that ending the government’s monopoly and allowing private institutions to issue competing currencies would force banks to maintain absolute fiscal discipline and currency stability just to survive market competition. Together, these frameworks would replace the top-down, political discretion of the present Keynesian solutions and the economic horrors that would be visited upon the population by MMT by instituting horizontal market discipline—ensuring that prices remain stable, capital allocation is governed by real savings rather than fiat expansion, and the threat of state-induced hyperinflation or systematic malinvestment is fundamentally eliminated.

The marriage of democratic socialism and Modern Monetary Theory is structurally designed for economic collapse, bound together by the dangerous delusion that printing money can permanently bypass the laws of scarcity. By treating a sovereign currency as an infinite piggy bank for massive state expansion, this framework ignores the inevitable endgame of unbacked currency creation: severe inflation, market distortion, and the erosion of real productive wealth. Ultimately, the movement is destined to fail because no amount of theoretical gymnastics can alter a foundational truth—the government cannot spend a nation into prosperity by depreciating its currency. When the fiscal illusion fades and the real-world resource constraints hit, the DSA’s reliance on MMT will not deliver a socialist utopia, but rather a harsh and predictable cautionary tale of state overreach and economic ruin. As a result of this unavoidable reality, people living outside insulated progressive enclaves must step up and fully reject this movement.