An Open Letter To Progressive Candidates and Incumbents
Dear Senator (or Congressman) _________
The simple answer to the question “how are you gonna pay for it?” is for Congress to both:
(1) mandate the Treasury to spend its appropriations, which it does now, and also
(2) mandate the Fed to create the reserves in the Treasury spending account that Treasury will need to spend upon passage of Congress’s appropriation, which it does not do now.
This can be done through some short, simple language that would be used in all appropriations and continuing resolution bills passed by Congress. That language is included in the graphic below.
The language, creating Overt Congressional Financing (OCF) provides both for filling the Treasury spending account with the reserves needed to spend appropriations, but also the reserves needed to pay back all the previous debt falling due within the period of an appropriation — that is, the reserves needed to pay back the outstanding debt instruments that were previously sold by the Treasury to match the portion of previous appropriations by Congress not matched by tax revenues.
So, the language covers providing reserves for both current appropriations and also for ending “the national debt” gradually, piece-by-piece, as it falls due, a great thing for progressive candidates to run on.
And that is true, even if they believe, as they should, that “the debt” isn’t a fiscal sustainability or financial capability issue for the federal government, but only a political problem to be overcome most quickly and decisively by “ending the debt.”
Since the new language accomplishes both of these things, candidates and office holders can give that language as an answer to “How are you gonna pay for it?” It is a true answer to that question.
That answer won’t end all of their political problems, but it will end objections claiming: that “we” don’t have the money to do what the candidates and office holders want to do, or that the US will become insolvent, or that we are too poor to spend federal dollars to provide what Americans want and need. So, it will be the fiscal politics game-changer progressive candidates need to defeat austerity and bring about the Green New Deal.
*This article was originally published at JosephMFirestone.com on 2/1/18.