Major financial players have been weighing in on a controversial theory positing that, because money is nothing more than a social agreement between people and ultimately does not stand for anything real, a country can never go broke and so deficits don't matter, according to Bloomberg. 

The idea is called Modern Monetary Theory (MMT). Generally, people tend to understand a country's budget in the same way they imagine a family budget: You have a certain amount of money, and if you decide to buy something, you spend that money or, if you can't entirely afford it, go into debt, which then must be paid off with future earnings. MMT proponents, such as Stephanie Kelton (who had been the economic adviser for the 2016 Bernie Sanders campaign), say that's not how governments actually budget: They in fact do the exact opposite. The government decides it wants to buy something. It passes a budget resolution authorizing it. Then it instructs the Federal Reserve to simply create the necessary money needed to make the purchase. This is similar to how a bank, through the issuance of new loans, essentially create money from whole cloth. This is why it is called fiat currency, as it is produced by fiat, versus a commodity currency, which is linked to the supply of a physical commodity like gold. 

With this in mind, MMT proponents such as Bernie Sanders and Alexandra Ocasio-Cortez say that, theoretically, the government can simply print however much money it needs to pay for whatever it wants, because, again, money is a social agreement that exists only through our acknowledgement and agreement of its existence and value. The only things that actually exist in this worldview are real goods and services (an apple versus stock in Apple), which means that if it is physically possible, it is fiscally possible, so long as the borrowing takes place only within its own currency.

But this idea has drawn major condemnation from prominent financial players, according to Bloomberg. A diverse array of critics, ranging from liberal economist Paul Krugman to Federal Reserve Chair Jerome Powell to BlackRock CEO Larry Fink, have all panned the idea, with Fink himself recently saying it was "garbage." A major criticism is that spending that much could lead to hyperinflation similar to what happened in Zimbabwe or pre-WWII Germany. Another critique focuses on the question: If the government can go into as much debt as it wants, who exactly is going to buy this debt? 

One major proponent of the theory, Randall Wray, has written that the purpose of taxes in the case of a government that issues its own sovereign currency is not to fund the government, but, rather, to reduce aggregate demand, which, along with other policy measures, controls inflation. Also, buyers of debt won't matter because, again, the government can just create the necessary money.
 
Despite widespread criticism, the theory has not drawn universal condemnation among the Wall Street set: Paul McCulley, the former chief economist of Pimco, while denying being a full-throated MMT proponent, says there is much about the theory that can be useful. Regardless, as more major political figures take the theory seriously, the debate will likely continue in the public sphere.