The trillion-dollar woman

The Ink has the interview The trillion-dollar woman.

If you want to find out what Modern Money Theory is, better to ask a person who knows. Here is an interview with Stephanie Kelton. (Her book is the one that I feature prominently on my Facebook page.)

MMT is about providing an accurate description of the monetary system that exists today and government finance mechanics. In other words, MMT describes how things work. We’re not on a gold standard anymore, but we haven’t come to terms with what that means.

We still have this idea that the federal government needs our money in order to pay its bills. That is wrong. Could Congress spend too much? Absolutely! But the punishment for overspending is inflation, not insolvency, contrary to what Ron Paul, Ted Cruz, and Lindsey Graham would have us believe.

At its core, MMT is about replacing the (flawed) concept of a government budget constraint with a natural resource (inflation) constraint. It’s not that there aren’t any limits. There are! But they’re not on the financing side (as we have been trained to believe). Our government cannot run “out of money,” as President Obama once falsely claimed. We cannot end up like Greece, and, contra these economists, we were never facing a fiscal crisis.

MMT teaches us to ask not, “How will you pay for it?” but “How will you resource it?” The politics are hard, but coming up with the money for Medicare for All, tuition-free college, or a huge infrastructure package is the easy part. Managing the use of our productive resources, and respecting our ecological constraints, is the defining challenge of our time.

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