Uhh the 2000 surplus didn't harm the economy.
Leaving aside the fact there was no surplus, MMT is based on an equation that says if there is a "surplus" in government, there's a "deficit" and thus recession in the economy. So if there's always government deficits, there's always a "surplus" in the economy and thus private savings.
This is it. This is the entire theory. No other factors matter except that (G - T) = (S - I) because the equation is literally and always true based on their definitions of these terms.
If you mow my lawn for $100 but say I can pay you in a year, MMT says the net is zero. Because your savings increased by $100 and mine fell by $100. Even though I got your labor and a year with the $100, you got an IOU which is "worth" $100.
If when you get that $100 you spend $50 of it and bury $50 in your backyard, you've invested $100 and saved zero dollars because that $100 still "exists" and everything has to zero out.
Somebody called it accounting masquerading as economics.
spoiler (click to show/hide)
WHY DOES NO ONE REMEMBER THE CHARTALISTS
This is better than most things ever in the world, Abba Lerner's attempt to set up price controls under his Chartalist proto-MMT:
Initially he toyed with various administrative wage and price control policies, but he found those lacking and soon gave them up. He replaced them, first, with a tax based incomes policy and ultimately, a market based incomes policy in which property rights in prices are set and individuals have to buy the right to change prices from others who change their price in the opposite direction. It was this idea that formed the basis of our market anti inflation (MAP) book. (Lerner and Colander 1980) Under MAP, rights in value added prices would be tradable so that any firm wanting to change its nominal price would have to make a trade with another firm that wanted to change its nominal price in the opposite direction. Thus, by law, the average price level would be constant but relative prices would be free to change.
