Chapter 569 - 557 MMT

"My Commissioner Lin, you really don’t take money for money,"

When Academician She saw Pan Yongnan leave, he went to find out what was happening, and his heart thumped suddenly upon hearing that New Yuan was going to invest in a major project.

The Science Academy’s involvement with space chips wasn’t a secret; it had even reached him before.

The Space Agency and its affiliates naturally weren’t too keen on such high-investment plans. Providing some scientific research equipment was fine, but they would not support space construction without a sufficient reason.

Academician She, annoyed by the persistent pestering from the Science Academy, promptly directed them to Lin Ju. According to his understanding, New Yuan might provide some support.

But Lin Ju’s decisiveness exceeded expectations, not only accepting adjustments during the preparation phase but also pledging an investment of one hundred billion.

Although that much money wouldn’t be allocated all at once, only to be added as the project progressed, such boldness was still astounding.

The state of New Yuan’s main business wasn’t a secret to the central government; even with annual tax exemptions and subsidies, they were still running at a huge loss, yet their side businesses were thriving.

Commissioner Lin didn’t take Academician She’s concerns to heart; instead, jokingly, he placed his hand on his shoulder,

"Money is just paper printed by the government, but our spending in space is real industrial strength. In the age of fiat currency, what does money amount to?"

However, Academician She frowned, as if seeing him anew, and sized him up,

"Do you believe in MMT?"

"Isn’t that the case now?"

MMT refers to Modern Monetary Theory, which gained prominence chiefly since the new millennium. Its central premise is very simple:

Modern nations have abandoned the gold and silver standards backing currency, and all issued banknotes are fiat money, right? These banknotes are essentially valueless and only accepted by the public due to government fiat.

MMT contends that, therefore, when a country needs to regulate its economy, it could simply print more money. Put more bluntly, it can be understood as "print money when in need." A larger government fiscal deficit indicates more wealth flowing into the market, which is better for the economy.

The ultimate goal of MMT is to utilize all of society’s idle resources and production capacity by printing money—for instance, if someone is unemployed, the government spends to provide them a job; if there is raw material with no demand, the government spends to create that demand.

To MMT, minting banknotes (actually, in modern nations, currency oversupply is achieved through adjusting bank digital figures) incurs no cost, yet it can yield actual production benefits. Therefore, the government should unrestrainedly use monetary policy to meet all demands, optimizing production to its peak.

This theory may sound fallacious but actually has viability. The most crucial aspect of MMT is that the printed money is spent, converting into real productive forces. The conversion to productive forces requires a certain threshold of pre-existing productivity.

Who has sufficient productivity? Of course, large industrialized nations with substantial manufacturing scales.

The face value of money from industrial nations is relatively stable, not suffering abrupt falls or rises—this is because they are backed by their own manufacturing capabilities. Other countries must use their currencies to purchase needed industrial goods, no matter how much they print. They must continue to use it, begrudgingly.

Lin Ju clearly remembered how the Federal Reserve in the original timeline had inflated the currency supply like mad; their approach was almost a practical application of MMT. Any adverse effects were silently transferred to those forced to accept the US dollar.

Therefore, Lin had a certain belief in MMT because his own country could do the same and, well... he wasn’t without practical experience either.

Even if the domestic aerospace industry continued to run at a staggering loss, it wouldn’t matter as long as they kept in touch with official channels. Whenever necessary, a little printing of money could stabilize everything.

Even with various side effects, that was all right because he knew the Federal Reserve would inevitably have to significantly ease monetary policy, and domestic policies would surely follow suit. Since the general trend was irreversible, it was simply a matter of going with the flow of history.

Investing in space ventures with such a loose monetary policy could still be considered an absolutely sound asset. Spacecraft wouldn’t vanish, Moon Base wouldn’t vanish, and the high-end industrial chains developed during the process wouldn’t either. Wasn’t this just like MMT’s concept of freeloading on productivity through printing money?

As for the currencies of other regions suffering from devaluation and wealth shrinkage, it could only be said that when the US Dollar loosens up it’s like bad money driving out good. If it can’t be stopped, then joining is inevitable.

Lin Ju’s forthright manner left Academician She somewhat silent. Although he didn’t understand economics, he did have some guesses about how much of the budget for so many major projects was allocated from last year’s fiscal revenue, and how much was from monetary easing.

After opening up about it, he even felt a bit more relaxed. The comprehensive roll-out of United Mining’s construction operation had always worried him, but now that he understood it better, he realized others should be more concerned, and he felt quite relieved.

The saying ’a misfortune shared is a misfortune halved’ might sound irresponsible, but it has been an objective truth for a thousand years.

After a moment of silence, Academician She suddenly spoke:

"Why don’t you just become the chairman, I think the things you accomplish with space would be beyond imagination."

"That’s not appropriate, but... Does that mean the budget can be increased again next year?"

"..."

...

December 1st.

Nakayama Juji, who had been pretending to be sick for a month and a half, finally reappeared in public. However, under the camera, he still looked weak, needing the support of two bodyguards to stand firmly, his complexion as pale as if he had just recovered.

While in the hospital, Nakayama Juji had desperately submitted his resignation, but unexpectedly, the parliament had come to a standstill and was unable to process his resignation.

The cause of the standstill was simple: over one-third of the members were absent.

More than half of them were also "collapsed due to heavy workload", with those thinner-skinned either fleeing abroad or simply shutting themselves in.

The Island Country authorities were almost of the opinion that the government had fallen into a semi-paralyzed state; while the grassroots functioned well, the top officials seemed to have vanished from the face of the earth.

The IAEA could obviously tell what was happening. The UK immediately thought of Gandhi, who championed non-violent non-cooperation, expressing dissatisfaction and non-cooperation through such extremely passive defeatism.

On reflection, their best response turned out to be just that. The IAEA, united and formidable, could run amok in any corner of the world; opposition was a road to nowhere, but non-opposition would mean facing some public pressure. Running away was shameful yet effective.

But the IAEA’s actions did not stop for a moment. As soon as two modified H-6 radiation monitoring aircraft legally flew over Tsushima Strait and directly into the Sanjima territory, all the preliminary preparations were basically in place.

At this point, Nakayama Juji couldn’t even pretend to be dead successfully; staying any longer in the hospital would mean getting treatment from the IAEA’s doctors.

Still, to show his stubbornness, he insisted on making his first public appearance at the Soul Summoning Society. To be precise, the location was now nothing but charred ruins.

After the fire, the authorities passed a rescue and reconstruction plan, but it seems that even the rubble has yet to be cleaned up.