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MMT in the Nation: "The Rock-Star Appeal of Modern Monetary Theory"

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  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    The Rock-Star Appeal of Modern Monetary Theory

    Very nice write up in a mainstream publication. The author did their homework.

  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Thanks Carlitos. It is an excellent article. But still "changing brains" is difficult. Keep telling us...repetition, repetition, repetition...
  • Liberal
    Independent
    Durham, NH
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    Yes a great article too bad the people that need to/should read it won't!
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    We are only going to get MMT reforms when it comes from the bottom up.

    It is too politically cumbersome for incumbent leadership to simply renounce things they earlier believed or advocated for; so we need new leadership that starts on a clean slate from an MMT point view.

    That means changing the voters and educating the public to make it easier for new leadership to fully embrace MMT.

    Without that, we can only slightly slightly steer the conversation to safer waters.

    Take Bernie. Kelton got him to at least put the concern of the "other deficits" (unemployment, infrastructure, environmental, equality) ahead of the fiscal deficit in his campaign rhetoric.

    Here's something recent from Rep. Ro Khanna (D-California 17th District). He damn near went full on MMT in this interview with Atlantic.com. He starts veering off the tracks towards the end, but he name drops Stephanie Kelton and starts off and still ends with the correct points.

    "Khanna: First of all, I think we have to look at what deficits are. [The University of Missouri-Kansas City economist] Stephanie Kelton’s work is very informative on this. If the government gives someone $100 and takes back $90, you’re at a deficit of $10. But that is $10 in the economy. It’s $10 of productive economic activity. It’s not like that $10 just disappeared.

    If you have inflation, then obviously you need to control spending. You don’t want hyperinflation. You can’t just have the government printing money and having prices go up. But then when we look at our economy and you look at the Congressional Budget Office projections, they project an inflation rate that’s at 2 or 3 percent, including with full employment, 10 years, eight years out. We constantly hear about Greece. Well, Japan has had a 240 percent debt-to-GDP ratio, and they haven’t had hyperinflation. In fact, they have deflation. The problem with Greece was not that it was a situation of debt-to-GDP ratio. The problem with Greece was a transition to the euro and losing confidence in the economy.

    I would start to care far more about the long-term impact of deficits versus empowering the middle class if inflation rates or the projection of inflation rates were higher.

    Lowrey: The idea is not to pay for it?

    Khanna: There are obviously ways to raise revenue—the financial transaction tax, getting rid of corporate deductions, taxing corporate deferrals. No one is saying that we [should] run massive structural deficits. We have to raise more revenue.

    But the red herring that somehow we’re going down the road of Greece or we’re engaged in fiscally irresponsible behavior… it is just not true given where inflation is projected to be."

    Khanna should have just explained the differences between currency users and issuers. And he could have explained that the purpose of taxation is to control for inflation, not unlike a thermostat lever that controls the temperature. His comments at the end do not contradict that.

  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Carlitos -- I appreciate what you are doing here. Educating people in smaller increments is better than maybe overwhelming them in big dumps. The theory needs soak time. It's kind of like asking everyone to learn a new language. It works better for young people, but us seniors have more difficulty.

    However, as a constructive suggestion, you might want to read George Lakoff's writings on how to "spin" or frame the MMT language into metaphors that are more easily understood by the public. Conservatives are masters of this in the political arena, one of the reasons they can get people to vote against their best interests. You could do the same for MMT.

    Read his Ten Point's for Democracy Activists at his website. You could borrow from those for MMT.

    As another example...his article on Regulations versus protections. How would people feel about Trump's doing away with government regulations if they instead were called "government protections"?

    Language matters.