When a nation has a sovereign currency, measuring national wealth in dollars makes no sense. Money is created (and destroyed) by the banking system (which in the US includes the US Treasury and the Federal Reserve Bank) as needed. When we ask things like "How are we going to pay for it"?, we're misleading ourselves. … Continue reading The Wealth of a Nation is Not Measured in Money, but in Productive Output
Stephanie Kelton provides a really good answer to the question of How Can We Afford Medicare for All? She points out that the US currently pays TWICE what others industrialized countries pay. At first glance, it seems weird to ask how we'll pay for something that costs significantly less than what we're currently paying. The … Continue reading How Can We Afford Medicare for All?
To be clear, this applies to currency issuing governments ONLY. This is true of the US Federal government. This is not true of the government of Texas. The US is the currency ISSUER. Texas is a currency USER, just like you and me. Having said that, the reason we have money is because the currency … Continue reading Government Deficit Spending Creates Private Sector Surpluses
The first published book describing how our modern economy works was published in 1993. The title is Soft Currency Economics: What Everyone Thinks That They Know About Monetary Policy is Wrong. The author is Warren Mosler. Who is Warren Mosler? Warren Mosler is identified as an Economist, when it seems that's true now in retrospect. … Continue reading Who Figured Out MMT? When? How?
Consider that the US Federal Government is the source of ALL US Dollars in existence. Consider that the US Federal Government can create US Dollars at will, whenever it is deemed necessary. Consider that the US Federal Government's ability to spend money is not constrained by the availability of US Dollars, as they can simply … Continue reading What Does It Mean When Politicians Say “We Can’t Afford It”?
The short answer is through a Congressional Appropriation. This is a spending or appropriation bill that originates in the House of Representative. Per the US Constitution, all spending bills must originate in the House of Representatives. Where do they get the money? Contrary to common belief, they do NOT get the money through taxation. The … Continue reading How Does the US Federal Government Pay for Stuff?