Randall Wray:

• Monetization of Budget Deficits
• A Meme for Money, Part 1
• Rethinking Money as a Public Monopoly by Randall Wray
• The Neo-Chartalist Approach to Money by Randall Wray
• Understanding Modern Money – Video by Randall Wray
• Sectoral Balances - Why The Government Must Run Deficits
• Fiscal Reform to Benefit State and Local Governments: The Modern Money Theory Approach
• Modern Money Theory: How I came to MMT and what I include in MMT
• Modern Money Theory – Part 1 by Randall Wray
• Answers from the MMTers by Stephanie Kelton and Randall Wray
• Minsky & Modern Money Theory: Was Minsky a “forefather”? by Randall Wray
• Public Service Employment: A Path to Full Employment
• How to Pay for the Green New Deal by Randall Wray
• IS THE JOB GUARANTEE NECESSARY?

Selected posts from Randall Wray:

"Currency creation through spending comes first. But how can the treasury spend first, since it needs deposits (at the central bank) to avoid bouncing checks? Central banks are generally prohibited from providing overdrafts. Hence, they worked out procedures to ensure that the treasury obtains deposits through sales of bonds that are purchased by banks using either overdrafts or borrowed reserves supplied by the central bank. This serves effectively as an end-run around the “no treasury overdraft” rule. Once the treasury spends, bank reserves are replenished. If banks don’t want to hold bonds, they can be sold to the central bank in secondary markets. However, banks normally do not want excess reserves created by government spending, so they willingly exchange them for (higher) interest-earning bonds. 

Normal Fed operating procedure ensures banks always get the reserves they need to buy bonds—which allows the Treasury to get the deposits it needs in its account at the Fed. Furthermore, Treasury doesn’t have to issue any bonds, as rules can be changed to allow overdrafts at the Fed. In that case, the Fed can still maintain a nonzero interest rate target by paying interest on reserves (as it has done since the global financial crisis), rather than using bonds as the interest-earning alternative to keep the fed funds rate up in the presence of excess reserves."

"A key insight of MMT is that bond sales by the treasury or the central bank are functionally equivalent operations. The conventional view is that treasury sales are a borrowing operation while central bank sales are an open market operation, but in either case the functional impact is to withdraw reserves from banks. Government spending puts reserves into the banking system and the reserves can only leave the system through bond purchases, tax payments, or cash withdrawals from deposits. Cash withdrawals are normally small (with seasonal variability); national government taxes are large but with temporal variation and are usually—for most countries—significantly lower than sovereign government spending. To avoid wide fluctuations of reserves and to deal with net reserve accumulation due to government spending in excess of tax payments as well, the central bank and treasury coordinate bond sales to drain excess reserves. For this reason, MMT sees bond sales as part of monetary policy operations—whether undertaken by the central bank or by the treasury."

"A sovereign government cannot run out of currency. Major central banks demonstrated this with QE, as they “keystroked” trillions of dollar, euros and yen as payment for large-scale asset purchases. They could just as easily “keystroke” reserves to banks to allow the treasury to spend".