First of all here is a totally general statement about the capacity of a currency-issuing government that applies to any nation and is a fundamental principle of MMT.
Accordingly, such a government can always use its currency-issuing capacity to ensure that all available productive resources that are for sale in that currency, including all idle labour, can be productively engaged.
That is, such a government can always, without exception, ensure there is full employment.
There is no financial constraint on such a government who desires to achieve that desirable policy goal.
Second, here is another totally general statement to complement the first. The worst-case scenario for a nation, irrespective of its government’s currency-issuing capacity, is defined by the real resources that such a nation can access.
If a nation can only access limited quantities of real resources relative to its population, then no matter what capacities the government might have, that nation, in all likelihood, will be poor.
The ultimate constraint on prosperity is the real resources a nation can command, which includes the skills of its people and its natural resource inventory.
Thus, even if the government productively deploys all the resources a nation has available, it will still be poor if its resource base is limited.
Clearly, productively deploying all resources is a necessary condition for prosperity. And that remains the responsibility of the currency-issuing government after all of the non-government sector spending decisions have been made. But it is not a sufficient condition. A nation has to have sufficient resources to be prosperous.
This post was adapted from Bill Mitchell's writing on the Modern Monetary Theory.
