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
That's not me talking. It's Frank Newman, former Deputy Secretary of the US Treasury. Per Frank, the US national debt is nothing more than the sum of outstanding Treasury Bonds. There isn't a national credit card where we borrow from the Bank of China. That simply isn't a thing. The audio quality of the clip … Continue reading US National Debt Never Needs To Be Paid Down
According to Michael Hudson, it means today almost the polar opposite of what it mean when Adam Smith used the phrase in The Wealth of Nations. In an interview during an episode of the podcast Guns and Butter, Michael Hudson spoke of a book he wrote titled J is for Junk Economics: A Guide to … Continue reading What Does “The Free Market” Mean?
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?
In his seminal work The Wealth of Nation, Adam Smith told a story of how barter is inefficient, and how money was invented to make barter more efficient. To move us from direct exchange to indirect exchange. Direct exchange is where the man with the cow and the person with 30 chickens do a direct … Continue reading How did Money Come Into Existence?
The generally accepted definition of money I was taught in High School Economics class is "Money is a medium of exchange and a standard of value". What does this mean? Medium of Exchange It can be used to buy and sell stuff. Standard of Value There is common agreement that money is what the value … Continue reading What is Money?
Has it occurred to you there are some things for which we NEVER ask that question. In the fairly recent past: The invasion of AfghanistanThe invasion of IraqThe 2018 tax cuts In a more distant past we didn't ask this about WW2 or the moon landings. Why is it this question is sometimes considered to … Continue reading How Will We Pay For It?