(Bloomberg) -- BlackRock (NYSE:BLK) Chief Executive Officer Larry Fink said he’s not a proponent of modern monetary theory.
“That’s garbage,” Fink said in an interview with Erik Schatzker on Bloomberg Television Thursday. “I’m a big believer that deficits do matter.”
MMT economists argue that because the U.S. borrows in its own currency, it can print dollars to cover its obligations, and can’t go broke. The theory has won converts among freshman Democrats like Alexandria Ocasio-Cortez as a way to finance such social policies as the Green New Deal and Medicare For All.
Last week, Federal Reserve Chair Jerome Powell described that school of thought as “wrong.’’ The U.S. deficit is on course to top $1 trillion in the coming years, according to the Congressional Budget Office.
Other comments from Fink in the interview include:
- We’re in a "Goldilocks moment" for global economies.
- If there’s a comprehensive trade agreement with China, that may reduce China’s need to buy Treasuries. "This is going to be a big issue," he said.
- "In Europe we’re seeing real structural issues rising to the top again,” Fink said.
- Rising populism continues to be a concern and there’s a need to create more "inclusive capitalism."