Business Insider has the article Ocasio-Cortez understands a key feature of the economy in a way most politicians miss — and it could be a huge asset for Democrats.
“The idea that we’re going to austerity ourselves into prosperity is so mistaken,” Ocasio told In These Times. “Honestly I feel like one of the big problems we have is that, because Democrats don’t have a deep understanding of or degrees in economics.”
Who knew they teach real economics at Boston University?
Ocasio-Cortez, who has an economics degree from Boston University, says the US economy needs another New Deal like the one implemented by President Franklin Delano Roosevelt in response to the Great Depression.
She seems to be able to explain this far better than Bernie Sanders ever has.
This is her key insight: Despite quack economists’ insistence to the contrary, the US government is nothing like a household. It is not “burdened” by debt. It can borrow indefinitely, as long as that borrowing does not spur inflation. What matters, really, is the quality of the spending, not the size of the deficit.
Well, in reality, the USA government doesn’t even have to borrow by any law of economics. The USA government creates USA money at will. It is only the Federal Reserve act of 1913 that insists on a circuitous route where the Federal Reserve Bank can only buy US Treasury debt from the open market after the US Treasury has sold the debt to the public. Without this requirement, the Federal Reserve Bank could just buy worthless paper from the Treasury the way they did with the Quantitative Easing that they did for the private banks.