A Critical Reappraisal of Modern Monetary Theory

This paper critically evaluates Modern Monetary Theory (MMT), acknowledging its insights into sovereign currency mechanics while exposing fundamental flaws in its theoretical assumptions, institutional analysis, and policy prescriptions. It argues that MMT's core tenets, particularly regarding unlimited deficit spending, the role of taxation, central bank independence, and the dynamics of private credit, are incomplete and often misleading. This paper introduces an alternative framework: the Sovereign Wealth and Thermodynamic Monetary Framework which aims to re-anchor money to tangible assets, emphasize the entropic consequences of unchecked fiat issuance, and propose a more robust approach to monetary governance and sustainable development that is applicable across diverse national contexts.