Can governments afford the debts they are piling up to stabilise economies?

Interesting read, thanks. It's funny to compare these two side-by-side.

MMT proponents are often painted as saying you can print as much money as you need whenever you need. My understanding, though, is that MMT also says "the only limit is inflation".

If MMT supporters really wanted to make their case, they would put forward a real inflation model... does that exist? Because if inflation is high enough you can't, as the author states, choose to sell government bonds at whatever interest rate you want. High enough inflation would put a very high floor on interest rates buyers would be willing to take.

Some other areas of either miscommunication or misunderstanding seem to exist still, as well.

For a DeFi lender of last resort, it sort of exists in Maker with MKR holders. We saw this in action when the collateral liquidation auctions broke down during the gas spike. Whether that model is sustainable depends on the rates of return vs rates of dillution. If no one chooses to be an MKR holder anymore because of the dillution from bailouts, then it breaks down.

For a DAO approach, you'd need the DAO's available capital to scale with the size of the collateral market it's protecting. So you have that same problem again--how you do get more people to inject more capital into that DAO?

Even safe areas of finance like Repo Markets need to be bailed out sometimes when markets fail or freeze up. So I think we'll continue to see this need in DeFi, for better or worse.

Regarding MMT and inflation MMT states:

When behavioural assumptions are introduced, the theory implies that a simple proportionate relationship exists between increases in the money supply and rises in the general price level. However, no such relationship has been found so, even if it were possible to control the money supply, there would not be a systematic impact on inflation.

Another example they give is Japan which has been running deficits for decades and still suffers deflation.

On DeFi:

Even though Maker seems to act as a lender of a last resort, the system is focused only on products developed by the company. If Uniswap runs out of liquidity Maker cannot help them. Therefore I believe there is a need for some kind of protocol-wide lender of last resort (maybe intorduced by Ethereum) if we want to see a mature DeFi ecosystem. Asking investors to bail out stablecoins is not going to work in the long rung imo.