Government revenue comes from taxation, right? At least that's a common view.
But, according to Modern Monetary Theory, central governments must create the dollars before they can be taxed: money that does not exist cannot be taxed.
That means a central government budget is not like a household, business or even a state government budget.
While it's still controversial in some corners, MMT has profound implications for how governments spend and whether they run deficits. There are also a few caveats.
To navigate us through a complicated topic, you couldn't ask for a better guide than Dr Steven Hail who is an economist at MML and Adjunct Associate Professor at Torrens University Australia.
Interview by Rod as part of a series for the book Sustainability and the New Economics.
