When did spending for the public purpose become socialism? When the government assigns corporate board positions to control the means of production get back to me and we can discuss socialism.
Supply-side economics has totally failed in any society it has been adopted by. Not only that, but its advocates have become blind to that failure to the point of accepting its resulting death and destruction, excusing it with references to the small amount of public spending still practiced as being at fault. Capitalism is an efficient means of distributing resources, as long as it is regulated and not depended upon to supply money into the economy.
A nation’s money/currency is a monopoly patent held by the issuing government. Shuffling that money around is the extent of what capitalism can manage. It can never increase the money supply in the private sector without increasing private sector bank debt. Retiring that bank debt can only be accomplished with the high power money only a sovereign currency-issuing government can create by “DEFICIT” spending into the economy.
A balanced budget, the holy grail of ignorant, or corrupt, politicians, is an effective 100% tax rate that leaves no currency in the private sector to serve as a store of value/savings to retire private debt or fund economic growth. All tax (and borrowing) receipts are destroyed as inflation control, not used to fund spending. Spending creates new currency and taxation/borrowing destroys that currency with the debt that created it whenever the two get together in the same sector.
Anyone familiar with dual entry spreadsheets knows this, even if they don’t realize it or connect the dots. The currency-issuing government never “has” money because it can never go broke or fail to pay any obligation denominated in the currency it creates. Our monetary system, similar to almost all others in the modern world, was designed around defending a gold reserve and having gold and the currency representing, and convertible to, that gold in the same sector presented unnecessary accounting conflict.
Bernie has a great advantage in economic issues over other candidates. His long-time econ advisor, Dr. Stephanie Kelton, is one of the best macroeconomists in the world and is well versed in Treasury/Fed operations as a leading proponent of MMT (Modern Monetary Theory) that deals with our economy from the perspective of our present reality, not gold standard myths and political propaganda. While the discipline is politically neutral, treating spending and tax cuts equally from a macro perspective, it does show that much more policy room is available for government spending than is commonly thought.
It recognizes the availability of resources as the only constraint on public policy spending, not some number pulled out of the air or the concept that “any” deficit is inadvisable. In fact, a nation that is a net importer must spend in deficit to stay even with trade imbalances. It also recognizes that any economic growth or the desire to save in the population, regardless of distribution, requires deficit spending and that the obsession with the national debt has caused many of our nation’s recessions as it starved the economy of the needed lifeblood to fuel commerce.
As Dr. Kelton often states, we should be concerning ourselves with securing resources to accomplish social goals, not chasing gold in a fiat world. That means funding infrastructure and education that will be necessary if we wish to compete with other nations in the world. She also acknowledges that any suffering in the economy that can be mitigated with additional spending is completely a political decision, not economics, and that politicians should own up to those decisions.
