luiz, your post strawmans MMT far less than Noah Smiths. That's pretty bad of Smith. MMT is a brand built around making sure that economic theories involving money are grounded in causal, mechanistic reality. The accounting matters. Simply, the money has to come from somewhere. The accounting identity points to something real obvious: if you run a government surplus in a growing economy, you increase private sector leverage as bank money (loans, credit cards, and other underwritings) fills the gap. The entirety of MMT is to slap people awake with all of the "well, duhs" because it's a brand meant for regular people to stop getting tripped on some basics. Deficits are money in, surpluses are money out. The government can't run out of money unless it's not their own currency (so foreign denominated borrowing matters a lot). The economy is most financed via leveraged bank money and the government running a surplus is like an investor pulling out of a leveraged fund. The private sector must either issue more loans (further increasing leverage) or begin selling positions. The only buyers are the other private sector (which is trying to sell), the government (which is running a surplus so they ain't buying), and the foreign sector. No wonder the last times two private sector was in deficit to the public sector we had market collapses (Dot-Com, Housing).