The Money Supply Must Grow

Endogenous money in MMT means that the government and banks create money inside the economy, depending on what people need and want. It's like a garden where the gardeners (government and banks) ensure enough flowers (money) for everyone to enjoy and collect.

More flowers to enjoy and collect: As more people visit the garden, they want to see more flowers and collect some to take home (save). To make everyone happy, the gardeners need to plant more flowers (money) so everyone can enjoy the view and collect some.

Government's role in planting more flowers: In the MMT world, the government is like the head gardener who helps plant more flowers (money) by:

Planting more flowers (increasing spending): The government can plant more flowers by spending more, giving people what they need and making sure there are enough flowers for everyone to enjoy and collect.

Allowing guests to collect more flowers (reducing taxes): The government can also let the garden visitors collect more flowers without giving some back (lower taxes). When guests can collect and keep more flowers, they can enjoy the garden more, share flowers with friends, or save them for later.

If there aren't enough flowers (money) for everyone to enjoy and collect, the garden won't be as beautiful (the economy will underperform). MMT teaches us that the government should plant the right amount of flowers (money) so the garden (economy) stays beautiful, and everyone has enough to enjoy and collect.