This Economic Theory Could Be Used To Pay For The Green New Deal
This message comes from N._P._R.. Sponsor get around with get around your idol car can actually earn you money. Just share it on the APP and Rinse it out when you're not using it visit get around dot com slash share now to start sharing get around. It's go time New York. Congresswoman Alexandria Ocasio Cortez wants a green new deal clean energy guaranteed jobs when she announced this everyone asked how are you gonNa pay for it. Here's what she told morning edition earlier this year I the first thing that we need to do is kind of break. The mistaken idea that taxes pay for one hundred percent of government expenditure. She says ambitious government programs can be financed through deficit spending and in saying that she has spotlighted in an obscure brand of economics known as Modern Monetary Theory N._p._R.'s Scott horsely has a beginner's guide modern monetary theory's been around for years but it's only recently stepped out of the shadows economist Stephanie Kelsen Stony Brook. Doc University says that's partly thanks to Cossio Cortes. The Social Media Darling embraced the theory while making an unapologetic case for costly new government programs there was something of an oprah effect wrench she did that. People immediately probably started readied googling modern monetary theory to find out what she was referring to run that Google search and you'll quickly find Kelton herself. The Economist who advised Bernie Sanders Twenty sixteen campaign is one of the best known evangelist for 'EM MT Kelton says paying for big government programs is the easy part. If Congress has the will she argues the Federal Reserve can effectively print the money if Congress authorizes a few billion dollars of additional spending or a few hundred billion dollars then the feds job is to make sure that those checks don't bounce a central element of empty is that governments that control their own currency like the United States don't have to worry about spending more than they collect in taxes. This they can always create more money but Kelton says that's not a blank check for unlimited government spending too often people get a whiff of mt they don't read the literature and they somehow arrive at the takeaway that M._t._a.. is about printing prosperity and of course when people hear printing money they go straight to Zimbabwe Weimar Germany those are notorious cases of runaway price hikes but Kelton says inflation is only Nia danger when demand outstripped the real capacity of the economy the people machines and raw materials last week under questioning from Cossio Cortez Federal Reserve Chairman Jerome Powell acknowledged the U._S.. Job Market has shown more capacity. Did you grow without triggering inflation. He and his colleagues had expected still vows no fan of MT as he told the Senate hearing back in February the idea that deficits don't matter for countries that can borrow in their own currency. I think is just wrong. We're. We're going to have to either spend less or raise more revenue taxes story and Bruce Bartlett also blast. 'EM MT as little more than a fig leaf giving license for big spending in the same way art laugher gave Republicans covered a cut taxes with the dubious claim. They'd pay for themselves. M. T. is sort of laugh recur for the Left. Some of them tease biggest supporters however are not liberal politicians but bond traders but firms like Pimco and Goldman Sachs James Montier. WHO's with the investment firm G._M._O.? Says he turned him Mt. After more conventional economics. Let him astray in the nineteen nineties. Monty and many others were convinced. Japan's rising government debt would drive up borrowing costs. It didn't across both Mike Lines or anyone who stupid enough to follow me money. It was one of the worst trait positions I've ever suggested in my entire life. Monte says M. T. offers better financial forecast and helped him understand why interest rates in the U._S. asks have stayed low. Despite growing government deficits persistently low interest rates have also prompted some mainstream economists like Larry Summers and Jason Ferment to rethink their attitudes and be less concerned about federal deficits but they haven't.