It’s not just President Donald Trump’s tweet seeking rate cuts but also progressive Democrats who see “modern monetary policy” as a way to pay for their priorities without having to fund them through tax rises agreed upon by Congress.
Modern Monetary “Theory” (as in gravity is also a theory) is simply an accurate description of how economies work and how central banks interact with Treasuries to enable money creation. It gives us a lens through which we can view the processes of our government without the myths, propaganda, and outdated concepts left over from the gold standard.
Once we understand that Congress is the “only” source of dollars in the economy and is not dependent upon taxation or borrowing in its spending beyond inflation control it becomes obvious that a large amount of policy space exists that makes it possible to realign our economy with the needs of the people, not the whims of “markets”. It empowers Congress to utilize fiscal policy and the budget to service the economy instead of forcing the economy to service mostly irrelevant numbers of the deficit and debt that are largely propagandized by opportunistic and ignorant politicians and misunderstood by the voters.
The US dollar is self-funding and not a “thing” that politicians must find via taxation or borrowing prior to spending on the public purpose. Both parties and the corporate media are complicit in promoting the grand lie that the “people” fund their government and they should be held accountable for the resulting misery and death that lie has created. It is the government, by mandate of the Constitution, that “funds” the economy and the monopoly issuer of the nation’s currency has no need to “find” money.
Taxation and borrowing have never been, even when we used the gold standard, funding mechanisms. The lie of “taxpayer dollars” funding programs and investments in our nation’s economy is responsible for any misery that could have been mitigated with spending and much of the social strife we have endured as the people were divided into makers and takers and used as watchdogs over money spent to elevate people out of poverty. The racist and fascist undercurrent now in plain view in America owes its existence to this lie and “any” misery is entirely a political decision, not economics.
