A theory is, in part, a new way of talking about matters. Such is true of Modern Monetary Theory. It's a gospel that opens a hopeful perspective on how our economy could be governed. The dominant persuasion emanates from wealthy and powerful cardinals of the Church of the Free Market -- Fundamentalist. Its' current hell dogma may be termed "National Debt Terrorism" (NDT.) NDT dogma is that there isn't enough money to eliminate poverty, provide living wage jobs, excellent health care, and secure retirement for all Americans while providing for our "defense." Should we try this sinful indulgence, with our already crushing sin -- load of national debt, we will encounter either bankruptcy or nation - killing inflation.
This dogma deserves scolding! It's based on unfounded fears and false analogies. It is parroted by elected Republicans, especially the Pennywises of the House "Freedom Caucus.". During the Obama years its Congressional acolytes passed one ridiculous "spending control" measure after another, always in the end blowing through their limits. But when federal budgetary news is reported it is draped like a suffocating blanket, by assumption, or alluded to in countless news stories. This is as true for news media of "liberal" as well as "conservative" persuasions. If this new gospel were to be shouted from rooftops, its' Apostles would surely be smeared by the widely broadcast propaganda voices of the institutes, forums, commissions, councils, established economic "authorities" and media Debt Scolds. So some degree of stealth in establishing a new gospel is necessary against this overwhelming propaganda environment.
Nothing in this piece is original theory. Its' deductive form has a rhetorical purpose. Much of the wording comes directly from L. Randall Wray's Modern Money Theory and pieces by Stephanie Kelton. My point is to suggest a way to propagate the gospel as a way of talking, into the ideology and specifically platform of the Democratic Party without enabling ND terrorists to immediately raise their red flag smears of "socialism," "communism," etc. This way is to start with personal visits to democratic candidates as soon as campaign seasons for 2018 and 2020 start, to ask whether the candidate accepts as true, one axiom. This axiom represents a leading idea that could inspire progressives to join with liberals to win elections and improve economic conditions and security (thus "economic happiness") for millions of us.
The idea is simply to use axiomatic, deductive structure enabling advocates to "spoon feed" MMT to candidates starting from extremely obvious truths. Does candidate X accept or reject first one proposition, the axiom, and then its' manifestly true deductive consequences. So here goes. Ask the Democratic candidate (repeatedly, if necessary, then publicly) do you believe the following claim?
Axiom: Governments are currency issuers.
By our constitution the Congress is the only issuer of legitimate paper money of the United States. It makes its genuine paper money valuable by requiring holders to pay taxes in its money.
The first theorem we may draw from this is:
Our government spending is not limited to taxes and fees collected.
A currency issuer is fundamentally different from a person, family, or business that cannot issue its own money.
Since government can issue any amount of money,
Our government can always meet general welfare needs of all its citizens even without deficit borrowing.
Fact Two: There is no strong evidence that any wealthy, advanced nation, undestroyed by war or natural disaster, has ever, through money issuance and spending alone, experienced fatal, nation destroying hyperinflation. In history there have only been a few documented cases of hyperinflation among very poor and/or war destroyed nations. Despite $Trillions extended by the Federal Reserve to bailing out the banks responsible for the Crash of 2007 -- 2009, consumer price inflation has remained below even the Federal Reserve's 2% annual goal for a decade.
Fact Three: All comprehensive, correct accounting is by double entry. In national income accounting the 2 biggest accounts are the Public (government) account and the Private account (of all individuals, families, corporations.)