Several years back I went deep on understanding MMT and more specifically central bank monetary operations. It is a confidence game. The Treasury (government) discovered it could appoint a monopoly bank (central bank) who has control over the currency and mandates that all other banks settle through its ‘reserves’. These reserves are actually government IOUs as a result of the central bank lending to the government which can use this for spending. The banks in turn lend out in return for privately-issued IOUs which trade 1 for 1 with government IOUs. The condition of the banks is to have enough government IOUs on hand when someone actually wants to exchange private IOUs.

The fact that the treasury and the central bank can effectively collude with one another to increase the money supply is the root of the problem. There is little incentive for government to stop spending because they can borrow whatever they need. What MMT says is that if the economy cannot absorb the money, inflation occurs, usually into assets such as real estate and eventually consumer goods. That’s exactly what has happened today. In the end, it’s not MMT’s fault, it just lays bare what is actually happening. IMHO, one way to fix it, is to enabling a competitive backing scheme - do you want your USD backed by the faith and credit of the government or by bitcoin. In some ways it would be going back to the gold standard in the late 1800s and a competitive bank note issuance scheme like what existed in Canada during that time.