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MMT for Progressives

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    Here's Rep. Keith Ellison (D-MN) (link) talking Single-Payer and expanding Social Security.

    The problem?

    Rep. Ellison doesn't understand how the checks clear in the U.S. banking system. Same goes for the Progressive Democratic Caucus.

    The function of federal taxes is to regulate demand, not raise revenue in order for the federal government to spend.

    The federal goverment can financially purchase anything available for sale in its own currency.

    It's a point of logic that government must spend the currency first before it can collect taxes in the currency.

    And that's just for starters.

    The decision to issue government "debt" is a policy variable and the product of institutional design constraints.

    The function of government debt is not to raise revenue, but to drain bank reserves that bid the cost of reserves below the FED's target rate. As industry insiders say, "you cannot do a reserve drain, before doing a reserve add."

    Total government net-deficit spending is directly equal to the total net savings of the users of that currency in that currency, regardless if the government issues Treasury bonds or not.

    Treasury bonds are like savings accounts, which pay interest, offered by the issuer of the currency to the users of the currency.

    The currency issuing government cannot run deficits without the decision to save by the users of the currency. Government deficits float per the users' demand for net-savings.