If you follow the debate on fiscal expansion in Japan, you have undoubtedly encountered Mitsuhashi Takaaki and Yoichi Takahashi. Both are giants in terms of reach and frequency of information. While both are generally classified as conservative pundits, they are often at odds on YouTube and social media. One could crudely classify Mitsuhashi as a staunch anti-globalist and Takahashi as more leaning toward globalism, but today I want to discuss a more fundamental difference: their view of money.
The “Infinite Money” vs. “Hidden Assets” Debate
If you believe that the amount of money is limitless and that the government can create as much as it needs, your view aligns with MMT (Modern Monetary Theory), championed by Mitsuhashi and his circle.
Yoichi Takahashi, however, uses a distinctly different rhetoric. While he agrees that the government should issue more bonds, his justification is built on “hidden resources.” You have likely heard him say things like, “The Ministry of Finance is lying when they say there’s no money; a pro like me can find plenty,” or “Looking only at government debt is absurd; you must look at the asset side as well.”
While MMT proponents occasionally make similar points, the core logic is different. Have you ever felt a slight dissonance when hearing about “assets” or “funding sources”? Under an MMT framework, the government creates money, so whether assets exist or not is practically irrelevant. If the Bank of Japan buys government bonds, that is the funding source. In a sense, Takahashi’s worldview is closer to that of the “fiscal hawks.” The hawks say, “Our finances are dire, so we can’t afford stimulus,” whereas Takahashi says, “Our finances aren’t that dire, so we can afford it.”
Contrasting the Rebuttals
Consider a news headline: “Government debt exceeds 1.2 quadrillion yen; debt per citizen tops 10 million yen.”
- The MMT-style rebuttal: “Government bonds aren’t ‘debt’ in the first place; they are a form of currency issuance.”
- The Takahashi-style rebuttal: “This is misleading; you must look at Net Debt (liabilities minus assets).”
Without understanding this distinction, the conversation gets muddled. However, it’s worth noting that regardless of which perspective you take, the conclusion remains the same: the news headline is a complete misunderstanding of reality.
Conclusion
My own view of money is almost identical to the MMT school, but I have no intention of fueling conflict between fellow expansionists. In fact, Yoichi Takahashi’s insights are incredibly valuable, and his contributions to fighting back against the fiscal hawks over the years have been immense.
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