Economic Issues

Each One Teach (at least) One

I have known about Modern Money Theory for about 7 or 8 years.  I started writing and talking about it almost immediately.  What I knew and understood then or even three years ago pales to my understanding now.  Still, I have a lot to learn.  What I recall the most from my early, somewhat ignorant, days is how gleefully I told people that taxes don’t have to pay for spending!  Most humored me and let me ramble on.  Usually, they would use that as a reason to springboard to their own pet conspiracy theories; because that was exactly what I sounded like, a conspiracy theorist.  I have two favorite examples. One was the friend who told me, with full certainty, that if we just stopped giving money to foreign nations, there would be plenty of money for lots of good stuff, nothing else was needed.  The other was a neighbor who told me that all welfare is banned in the Constitution.  I, of course, asked him what clause in the Constitution described this ban. He honestly admitted he did not know.  But he did reveal that a talk radio host said it was in there; so it must be true because lawyers told the host that it was true.  You cannot make this stuff up.

The point is, my message was not getting through.  Telling people point blank that taxes do not fund spending always leads to a change in subject.  It always leads away from what is so very important about MMT: which is that MMT describes how macroeconomics operates in the modern world.  In fact, I suspect that MMT describes how macroeconomics has always worked.  Unless, you frame MMT to bring the person to understand it, and there are numerous ways to do that, you can never move the discussion into describing a world where MMT is recognized.

Here are some pointers when talking to someone about MMT.  Many of these pointers will not work in the social media realm.  That is a world way too random to engage in a directed conversation.  Don’t start with talking about paying for anything, ever.  That will almost immediately lead to whether your idea of “keystrokes” (and some people will think it is really your own idea) is viable economically and legally.  Instead, note that the US is sole issuer of the dollar and as an example ask them what happens if they printed some dollars themselves.  The idea is not necessarily to copy exactly what I am saying, but to show how to introduce the concepts and foundations of MMT one piece at a time.  Find a way to help them reinforce that MMT is objectively true. As you work your way through, explain the flow of money and end with taxes because, in fact, the last function a dollar has, is to be collected for a tax. After that the dollar is gone.  Of course, depending on what brought you into this conversation you may want to start with taxes and work backward by explaining that taxes are needed to give currency value and prevent inflation, leaving out the discussion killer that it does not fund anything.  Or perhaps, and I like this approach, is to admit before anything else that MMT describes how money is constrained.  Without economic constraints on the money supply, we could possibly become the Weimar Republic with uncontrollable inflation, taxes prevent that from happening.  Then, back track to the beginning.  In other words, preemptively remove their most likely point they will make later when you tell them the government can create as many dollars as it needs.

Framing, and directing a conversation and bringing someone on board with MMT is the most important thing an MMT advocate can do.  They do not need to walk away understanding sectoral balances and what is meant when they hear about borrowed money to balance off deficits.  You can and should provide links via email, so their learning journey can begin.  Realize that you and your student may make some mistakes, just make sure at the end they understand that taxes do not fund spending, ever.  And do not concede a point you don’t know the answer to.  There are a bunch of people at Real Progressives willing to help you learn.  And lots of resources to research any topic that may have arose.

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