You must be diligent in order to get the message out about #MMT
My purpose here is to spur the development and refinement of the conversation already going on about how to better disseminate knowledge and acceptance of MMT.
While Flint’s problems surely run deeper than its lack of local tax revenue, it’s difficult to overstate what a substantial injection of capital could do for the city. The question: where does Flint “find” the money? Enter Modern Monetary Theory.
What we must learn from Pasteur's example is the bravery to wield truth as a weapon against well-established lies, and the fortitude to persevere, even when the odds are stacked against us. For no matter how high the odds are stacked, the stakes are even higher.
The mainstream voices—the economists and journalists and political leaders—thrive on this question of how to divvy up the pot of “money” that America, by some inexplicable process, has been allocated to have. Staking out positions in this allocation argument is their career and sustenance. To take their argument away (by suggesting the pot of “money” is, in fact, expandable—as needed—by the direct sovereign spending of fiat-currency) threatens to leave them marginalized and irrelevant; even worse: possibly unemployed?
It is clear we are in the middle of a communication breakdown in this country and our road forward must be led by creative people with innovative ideas, not career politicians with regressive austerity measures. Understanding Modern Monetary Theory is how we can achieve this, and communicating that understanding is key.
It's not about entitlement, it's about survival.
Modern Monetary Theory (MMT) represents a lens from which to view the various operational levers within the macroeconomy. It is simply the observable facts about how the monetary system works. Not "believing in" MMT is, in essence, denying reality.
The importance of this is not simply that the U.S. government no longer must keep enough gold in its vaults to back up its money supply. The importance lies in a profound conceptual shift about what money is—and how a modern, democratic society can use that new understanding to address public needs and pursue collective goals.
So, she can see that if she advocates for the spending needed to solve our problems, then she may be stepping into a mine field right off the bat. How should she cope with that situation, which she is sure to hit soon if she hasn’t already gotten there? Well here is where MMT can help her and other progressive candidates.
In 2018, for the sake of your family, your friends’ families and for every American family facing financial hardships, make your new New Year’s resolution to learn about the reality of our nation’s economic system, to learn MMT, and when you’ve done that, teach someone else what you’ve learned. Together we can spread this knowledge and save lives by answering that age-old progressive agenda-killing question: ‘how are we going to pay for it?’
I woke today with an inner rage that can only come from experience and knowledge. This winter, hundreds of thousands of Americans will be on the streets homeless, without food, shelter or heat. Families will break up from financial distress. Kids will be dealing with life insecurities, bullies who capitalize on weakness and observers will judge "misbehavior" versus dig deeper for the real root causes. 45,000 suicides from joblessness will occur and many more will unsuccessfully try to take their lives in despair. Millions will suffer from food insecurity or poor nutrition because of financial destitution, austerity and Calvinism. Millions will die from pollution and the environmental destruction from contaminated drinking water. Airborne illnesses from air pollution will kill or severely damage their lungs as well. Hundreds of thousands of minorities, vulnerable from years of systemic and envrionmental racism will die attempting to survive by living in alternative economies from unregulated prostitution to slinging drugs and gang related violence. Many women will suffer the effects of rape and be forced to self-medicate, have unsafe, unregulated procedures and even commit suicide from a lack of available, affordable services. Millions of individuals suffering from mental illness will go untreated, commit suicide, commit murders, destroy families and end up in jail as opposed to a medical facility... All because the people are more worried about the tone of activists sharing the econonic truths to fix all of the above... tone policing. And ultimately because of austerity. Cutting federal spending. Tax cuts for the rich and not Medicare for All, student loan forgiveness, free college for all, a Federal Job Guarantee, Green Energy and an overall dereliction of duty to serve the people by our "elected representatives". Voters are easily distracted and politicians gleeful of our short memories. #LearnMMT #FuckAusterity #GetSmart #RiggedElections #ShortSightedness #DNC #TaxScamBill
MMT, aka Modern Monetary Theory, however poorly the name works for you, is not a system that has to be implemented someday. It is a perfectly accurate description of how our currency works. It is a myth-busting destroyer of propaganda and myths. The establishment and the activist alike speak in lies from the tablecloth... MMT destroys those arguments by shining a light on the functional realities.
Well that title is blunt, isn’t it? I like blunt. That’s why I chose it. As I always say, blunt cuts through bullshit. It’s my bet that it is sure to cause irritation for those persons who play immature games of semantics with the word ’fund’. Good. Look, we all know what people mean when they say, ‘Federal taxes don’t fund federal spending’; they mean, ‘The federal government does not require an income, and so, it does not spend the proceeds from federal tax collections’. Some people simply wish to confuse others by playing a game of semantics over the word ‘fund’.
What follows is Part 6, the final installment of a direct rebuttal to the original Powell Memo, frequently using Powell’s own words, which instead offers a progressive plan to take back the country from the ravages the corporate oligarchy has committed on the American people and restore the freedoms and protections to which we are entitled. Read Part 1, Part 2, Part 3, Part 4, and Part 5.
The United States has never hit its debt ceiling without Congress intervening to raise it, but the prospects of this occurring are becoming increasingly likely under the Trump Administration and the current Congress. On July 28th, Secretary of Treasury Steve Mnuchin wrote a letter to Congress to inform them that action would be required on the debt ceiling, as its expected to be reached by the end of September 2017. "I have determined that a 'debt issuance suspension period,' previously determined to last until July 28, 2017, will continue through September 29, 2017. As a result, the Treasury Department will continue to suspend additional investments of amounts credited to, and redeem an additional portion of the investments held by, the CSRDF, as authorized by law," Mnuchin wrote to House Speaker Paul Ryan (R-WI). He urged Congress to take action before their August recess, but they have not. If Congress fails to act, the government would shut down as a result. The consequences of what could happen if congress fails to act are unknown, but they don't bode well for the U.S. economy to even face the possibility of it occurring. "Honestly, no one knows. It would be uncharted territory. It’s hard to believe Congress would ever choose to run the experiment, but these are strange times. Anything seems possible," said Dr. Stephanie Kelton, a Professor of Economics at Stony Brook University and a Fellow of the Sanders Institute, in an interview with me. "U.S. Treasuries are the equity that undergirds the global financial system, so a default on payments would, presumably, lead to serious disruption in financial markets." The debt ceiling was a common point of contention during the Obama Administration, and has served as an opportunity for political opposition to leverage for political gain. Obama told Congress in 2015, "If it gets messed with, it would have profound impact for the global economy and put our financial system in tailspin." In 2011 and 2013, the debt ceiling debate engulfed Congress, as Republicans who held a majority used it to negotiate to achieve their own agenda. In 2011, the United States' debt rating was downgraded by the S&P for the first time, increasing borrowing costs due to how close the U.S. came to defaulting on their debt in 2011 amid the debt ceiling debate. Financial markets tanked in response to the crisis, experiencing the most dramatic volatility since the 2008 economic recession. The debt ceiling sets a limitation on government spending and the government's ability to regulate the economy and financial markets, as well as its ability to fund operations of the government. Though traditionally the ceiling has been raised without debate, during the Obama Administration, the Republicans in power used it for political purposes to the detriment of the economy; it's possible the Democratic Party will return the favor, or Republicans will try to attach policy in exchange for raising the debt ceiling, sparking a heated debate. Economist Rohan Grey told me in an interview, "What happens regarding the debt limit depends on how policy actors choose to respond. There are discussions about prioritizing certain kinds of payments over others in the event the Treasury General Account has insufficient funds to over payments, but they are all ultimately speculative. My personal view is that as long as the Treasury Secretary has the ability to issue certain instruments to finance the deficit, such as platinum proof coins of whatever denomination he wishes under USC S 5112(k), he is obligated to issue such instruments to ensure payments are made." He added that credit agencies decide on their own to downgrade credit ratings at their own volition, based on predictions determined by the political climate, but since the U.S. produces its own currency, there is no tangible threat of actual defaulting or inability to pay debts. "As the U.S. government is a sovereign currency-issuing government, it does not require bond issuance to deficit spend. Treasury bonds are issued by the government to establish and maintain a particular interest rate. Therefore, the debt ceiling serves no real financing purpose and it should be scrapped," said economist Ellis Winningham in an interview with me. "The debt ceiling functions solely as a political tool that is used to strong-arm the opposition, usually into accepting cuts to vital programs, under threat of deliberately preventing the federal government from ‘paying its bills’; an act which would then generate public outcry and, thus, political damage to the opposition." Winningham added, "The people are not separate from the federal government. Separate from politicians, yes, but not separate from the institution of the U.S. government. We are the government and the government is us. The economy is also us and it is ours. We the people create our own currency and it is time that we spend enough of our dollars into existence to reach the real ability of our economy to produce goods and services. I am talking about reaching maximum output and sustaining it indefinitely. I am talking about spending to achieve a condition of full employment, where all who are willing and able to work can have a job at a decent wage, and sustaining that condition in perpetuity." On August 8, CNBC reported, "the decision could have significant implications on the markets because the Republican Party seems to be 'backing off the idea' of a 'clean' debt ceiling. A 'clean' debt ceiling refers to a lifting or suspension of the agreed-upon cap on federal borrowing capacity without any additional provisions." As the deadline nears, the economy and markets will likely respond accordingly, and the same partisan tug of war is likely to entrench Congress at the risk of shutting down the government and tanking the economy. Joe Firestone, the author of the kindle e-book Fiscal Myths of the 2016 Campaign said, "The law setting the debt limit can be turned into a dead letter by the President within single Executive Order issues by the President requiring the Secretary of the Treasury to mint a single 1-oz platinum coin with a face value of $100 trillion and then deposit that coin in the U.S. Mint's Public Enterprise Fund (PEF) Account. The very quick result of that order, after another easy step, would be to add $100 trillion in reserves to the Treasury Spending Account, removing the need for the Treasury to 'borrow' any more money for at least 15 years, and also pay down nearly all outstanding Treasury debt falling due for at least that period." Firestone added, "Don't fall for the idea that Congress can't raise the debt ceiling without cutting spending programs or raising taxes because we already have $20 trillion in Treasury debt, and can't afford to borrow any more money without increasing the already heavy burden on our children and granchildren. The truth is that 'we the people' don't owe that money. Our Federal Government owes that money and it is not like your household. Your household cannot create US sovereign money: bank reserves, currency, and coins. Your Government can, and it can do that in unlimited amounts since it is a fiat sovereign, unlike our state and local governments and governments like Greece and other Euro nations. Since it is a fiat sovereign it can repay all its debts subject to the limit, including the whole $20 trillion now outstanding, without taxing any of us an additional penny beyond the level of taxation we pay now. So, tell the Congress that the public debt is their debt and that instead of giving us a BS debt ceiling crisis, what they need to do is to repeal their debt ceiling law and just let the Treasury do what they have already delegated it to do, namely, spend what they have already funded in legislation they have already passed."
Recognize that racism is only a method of division that works to enslave the majority of the populace. It's time we recognize the real problem (economics) and work together to solve it by implementing strategies using the knowledge of economic reality (MMT).
Chuck E. Cheese is a great analogy for the fiscal policy of the federal government because they are both “currency” issuers. The reason why this is all so important to understand is that MMT has far ranging implications for the progressive movement not just nationally but globally. Appreciating the reality MMT represents is a fundamental change in how we approach our government and its spending. It eliminates the debate over HOW we’re going to “pay” for something, and lets us ask if program X will improve our lives, then why is the government refusing to spend when it has no constraint? That will drive this revolution beyond complaining about the state of the world to demanding that the government spend in support of the public purpose.
Anti-austerity is a word, of which, culturally and socially speaking, perhaps the Spartans wouldn’t have approved of. We can accept that. It was a Laconian thing. We wouldn’t understand anyway. However, it is also a word, economically-speaking, that many orthodox economists and politicians understand but outright refuse to accept. It’s a neoliberal thing. We cannot and must not accept that.
Someone asked me - no - I lied - someone told me - MMT is not relevant to the average voter, the average American - it is irrelevant - then proceeded to tell me that Paul Krugman said it was a joke. He could not be less accurate but his critique is relevant because many do not pay attention and yet they wonder why they march in place.
The concept that the US government has no money of its own by design and must tax and borrow to fund its spending is an imaginary concept.