PaulMB
pfm Member
This seems to imply that money creation is a free lunch but it isn't, even under MMT.
Sterling money creation, whether or not it's spent in the UK or on imports, has an inflationary impact which requires higher taxation to negate under the MMT framework. So it is paid for by those who are taxed. Not paid for as in the literal transfer of tax monies from taxpayer to govt to the seller of imports (which exponents of MMT don't like to describe the monetary flows as) but in the causal link between higher spending and higher taxation required to control the resulting inflation at full employment levels.
I would add that it would also create a constant state deficit, to be necessarily filled by increased taxation and/or state borrowing, which would steadily increase the National Debt. This, in turn, would increase the cost of servicing the ND, both because it is larger and because the value of Sterling would decrease vis-a-vis other currencies in the international competition for state (and other) bonds.