FET #77: What’s the modern monetary theory (MMT) view on inflation and the interest burden of public debt?

2026-06-14

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Friend of the show Mike Fellman joins me to chat about all things macroeconomic. We pick up on a previous conversation I had with Moses Sternstein about the interest burden from public debt. Mike has a deep understanding of bond markets, macro policy, and money. It was a good chance to ask him about Modern Monetary Theory (MMT), which is a school of thought in economics that focuses on monetary operations and both sides of the monetary balance, which includes the debt (the liability to the government) and the asset (the Treasury bond...

Friend of the show Mike Fellman joins me to chat about all things macroeconomic. We pick up on a previous conversation I had with Moses Sternstein about the interest burden from public debt.

Mike has a deep understanding of bond markets, macro policy, and money. It was a good chance to ask him about Modern Monetary Theory (MMT), which is a school of thought in economics that focuses on monetary operations and both sides of the monetary balance, which includes the debt (the liability to the government) and the asset (the Treasury bond held by the public or other organisation).

Is the MMT view really that different from the standard macro view? And where does a lot of the fear about public debt come from? Who really bears the cost of interest on public debt?

We dig into these questions. Enjoy the conversation.

Follow Mike’s terrific Housing Hell Substack here.

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