Budget deficits do matter, billionaire hedge fund manager Paul Tudor Jones said on Tuesday, arguing that governments cannot print money in perpetuity without consequences — as he likened Modern Monetary Theory (MMT) to the movement that’s helped legalize cannabis.

In a broad discussion with fellow billionaire investor Ray Dalio at the Greenwich Economic Forum, Jones called the surge in deficit spending a growing economic concern, and took a swipe at MMT — the idea that the federal government can effectively print money without regard for balancing spending and taxes.

“I love it because when I hear people talk about it…I can’t help but think the evolution of its acceptance,” Jones said, speaking about the theory that embraces unrestrained government spending as a stimulus.

He stated that MMT was in fact “not modern,” given its roots in concepts were popularized by the famed economist John Maynard Keynes, who postulated that the economy could be pump-primed via heavy government spending.

Keynsian ideas of stimulus gradually fell out of favor as governments emphasized balanced budgets. Jones argued that — much like legalized pot — the idea has gained mainstream support after years of being taboo.

“When I hear people talk about it ... I can’t help but think about the evolution of its acceptance, it’s kind of the same way that if you think about marijuana, its acceptance has changed over time. Because 50 years ago, it was illegal, reprehensible. Modern monetary theory, can you imagine Paul Volcker, even considering modern monetary theory?” Jones said, referring to the Fed Chair from 1979 to 1987.

U.S. Rep. Alexandria Ocasio-Cortez (D-NY) is one of the more well-known proponents of MMT. Now, elected officials have “medicinalized” the idea of deficit spending to create growth, Jones said. “Now we’re at a point when it’s so widely accepted, we should have put it in gummy bear form and sugar coated it,” he joked, comparing MMT to edibles.

‘A temporary boost to GDP’

The conversation over MMT takes place against the backdrop of a raging debate about how the government should bridge the widening income divide. Years of expansionary fiscal policy have driven up the national debt, which topped $23 trillion just last week.

“The bottom line is that an MMT-style fiscal expansion can be helpful, but it will lift government debt levels with unknown consequences and only provide a temporary boost to GDP, whereas well-designed structural policies will provide a long-term boost to potential GDP growth and ultimately living standards,” wrote Torsten Slok, Deutsche Bank’s chief economist, in a research note on Tuesday.

At the forum, Jones predicted the budget deficit, projected to hit $1 trillion this year, will soon surge to as much as 15% of gross domestic product.

“It’s incredible to me because I look at the world right now and I look at the asset pricing,” which doesn’t appear to show investors are worried, the billionaire said. Bonds are lodged near historic lows, while the Dow Jones Industrial Average (^DJI) and S&P 500 Index (^GSPC) rocketed to new record highs on Monday.

“It’s so incredible to me,” he added.

Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek

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