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Dialectic of Modern Monetary Theory and Austerity

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Our Constitution Article 2 grants power to Congress to coin money and regulate the value thereof. In the section on appropriation it says nothing to the effect that only taxes collected or borrowed money can be appropriated. Therefore there has always been room for the simple creation of money to fund programs, whether entitlements or killing machines for wars. Congress has refused to use this power and left Republicans to endlessly scare voters into believing if this is done there will be disasterous inflation ...or something.

This is essential to Modern Monetary Theory and could be used by progressives in Congress to put our New Deal and Great Society programs beyond Republican threats. But it is marginalized by media NOISE so those elected by the money of rich contributors can simply refuse to really help the people who need it.

1.

Austerian: "We're in an enormous $21 trillion debt!"

MMT Theorist: " Our National Income is about $21 Trillion also. Our national assets total about $128 Trillion. Would you be in trouble if you had annual income about equal to your total debt and assets 6 times as great?

2.

Austerian: "But we're a tremendous debtor nation. Some day we'll have to pay back what we owe."

MMT: "Who's going to collect it? How?" We have the world's reserve currency, we set borrowing terms, and can roll over debt (re-issue substitute bonds.)"

3.

Austerian: "Interest needed to pay on the mounting debt will dry up capital for investment."

MMT: "No. By one measure it is still only about 6% of GDP. And we can always create more money to pay interest."

4.

Austerian: "Won't MMT be an invitation to inflation, even hyperinflation?"

MMT: "No! The Fed. bank bailout required est. $2-$29 trillion. Asset deflation, but no CPI inflation happened, because the 'money' was non-spendable, it was trapped. Learn about trapped liquidity!

5.

Austerians: "The U.S. should operate like a business. Our budget should be balanced every year."

MMT: "No! Our government is not a business! It exists to secure life, liberty and opportunity for citizens. If the budget needed to be balanced, taxing out a dollar for every dollar spent would mean there would be no new money added to the private economy!"

6.

Austerians: "There are makers and takers. Some people are poor because they're lazy or dissolute. Taxpayer's money spent on them above what's collected is a debt that makers must pay off!"

MMT: " Many poor are blameless for their condition. Private charities can't collect enough to keep them alive. Our Government can meet general welfare needs even without deficit borrowing.

7.

Austerians: "If we keep spending like this, other nations will eventually stop trading for our valueless dollars."

MMT: Other nations have accepted our paper bonds. The U.S. does not need collected taxes not even to RE-distribute $ from Rich to Poor. MMT funding is distribution, not redistribution.

8.

Austerians: "We can't afford health care insurance for all."

MMT: "Yes we can! Nations much less wealthy (Scandinavian) have such systems whose fairness is not questioned."

9.

Austerian: "Taxes are theft by force from productive people."

MMT: "Dude! Not since the Sheriff of Nottingham! Taxes are products of class conflict. But currency tokens aren't 'your money.' Taxes return to the government its' motivator of economic activity."





 

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I could be Bernie Sanders older brother by similarity. I was born in Manhattan, 1940, he, about a year later, in Brooklyn. I too am a white male American. A retired college professor of philosophy. We both were born of Jewish parents. I was (more...)
 

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