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The Great Unwinding

Slavko — Wed, 03 Apr 2024 23:15:07 +0000

The Great Unwinding

The Failing Battle for Health and Healthcare in These All Too Disunited States

The slang definition of “unwinding” means “to chill.” Other definitions include: to relax, disentangle, undo — all words that, on the surface, appear both passive and peaceful. And yet in Google searches involving such seemingly harmless definitions of decompressing and resting, news articles abound about the end of pandemic-era Medicaid expansion programs — a topic that, for the millions of people now without healthcare insurance, is anything but relaxing.

Imagine this: since March 2023, 16 million Americans — yes, that’s right, 16 million — have lost healthcare coverage, including four million children, as states redefine eligibility for Medicaid for the first time in three years. Worse yet, the nation is only halfway through the largest purge ever of Medicaid as the expansion and extension of healthcare to millions, brought on by the Covid-19 pandemic, have ended, leaving some families no longer eligible, while others need to reapply through a new process in their state.

This thrusting of tens of millions of Americans out of the national healthcare system at a moment when healthcare outfits, pharmaceutical companies, and health insurance corporations are making record profits has been termed “the great unwinding.” And it couldn’t be more cruelly ironic. After all, states have the power and authority to expand healthcare to all their residents; the federal government could similarly extend the declaration of a public health emergency that would let so many of us keep distinctly life-protecting access to healthcare. Yet millions have instead been pushed violently and rapidly from such life-saving care.

Some states are feeling the impact especially strongly. In Georgia, for instance, more than 149,000 children lost their pandemic Medicaid enrollment in just six months. Perhaps unsurprisingly, Texas is the epicenter of Medicaid’s unwinding. There, more than two million Americans have been removed from the state’s Medicaid program since federal pandemic-era coverage protections were lifted last April. As Axiosreported, new state data indicates “that’s the most of any state and nearly equivalent to all of Houston — Texas’ most populous city, with 2.3 million residents — losing coverage in less than a year.” In fact, 61% of enrollees in Texas have lost Medicaid since last April.

Death by Poverty and the Lack of Healthcare

In my home state, policy analysts predict that more than 1.1 million New Yorkers will be pushed off Medicaid roles in this same unwinding. Fortunately, people are organizing in response, calling for the right to healthcare, living wages, the abolition of poverty, and more.

On Saturday, March 2nd, I stood next to Becca Forsyth of Elmira, New York, at the Poor People’s Campaign’s Mass Poor People and Low Wage Workers Statehouse Assembly in Albany, New York. Becca was one of dozens of low-income people who testified at simultaneous assemblies held in 31 state capitals and Washington, D.C. These assemblies launched 40 weeks of the mobilizing and organizing of poor and low-income eligible voters in the lead-up to the 2024 elections, while challenging those running for office, as well as elected officials, to confront poverty as the fourth-leading cause of death in America. Becca was not the only speaker to touch on the crisis of healthcare (and its connection to poverty and death), but her words stuck with me:

“Just since December 19th, I have lost more than a dozen people I loved dearly. In 74 days, I’ve watched as people I’ve known most of my life were literally squeezed to death by poverty and the catastrophic impact it has on our entire lives. People like Missy, a 47-year-old woman who was found lying beside the railroad tracks, dead… Or Gary, who died at the hands of the police while in a hospital for a mental breakdown. Or Loretta, a friend who was a friend before I even knew what the word friend meant, who is no longer with us because my community won’t spend money on substance-use treatment. Chemung County leads this state in way too many negative ways. We rank 59 out of the 62 counties in New York for health outcomes. We have outrageous homelessness, food insecurity, premature death rates, and lead poisoning. Our chances for getting out of poverty are extinguished before we even have a chance!”

Just two days before I stood with Becca in Albany, the state capital, demanding the right to thrive and not just barely survive, I rallied with healthcare workers and community members at SUNY Downstate Hospital. With the support of New York Governor Kathy Hochul, SUNY Chancellor John King recently announced that his outfit may close SUNY Downstate Medical Center in Brooklyn, New York, one of the few remaining public-safety-net hospitals in the state.

At that rally, community members, hospital workers, local politicians, and faith leaders shared information about the crucial role that hospital has played in the community. It served as a Covid refuge where thousands of lives were saved in the heat of the pandemic, as a critically safe birthing place for Black moms (crucial given the maternal health outcomes for so many women of color), as the only kidney transplant hospital in Brooklyn, and as one of the only remaining teaching hospitals in the area after the closure of such facilities, particularly in impoverished neighborhoods, across Brooklyn and the rest of New York.

Sadly, closing down hospitals or reducing their services in poorer neighborhoods is becoming all too typical of this nation. Big conglomerates are buying up chains of them and making decisions based only on their bottom lines, not the needs of our communities. In fact, more than 600 rural hospitals are now at risk of closing due to financial instability and that’s more than 30% of America’s rural facilities. For half of them, the possibility of closure is immediate, according to a new report from the Center for Healthcare Quality and Payment Reform (CHQPR).

Our Unwinding Health

Such Medicaid cuts and hospital closures are but two manifestations of a far larger attack on American health and healthcare in what’s fast being transformed into a death-dealing nation. They are but harbingers of an even larger “unwinding” of our health as a nation. Before the pandemic and the most recent cuts, 87 million Americans were already uninsured or underinsured. We’re talking about people sharing heart-attack medicine because they can’t afford their own prescriptions, burying their children for lack of healthcare, and relying on emergency rooms rather than preventative care, while going bankrupt in the process.

It’s simple enough. All too many of us are skipping needed care. In 2022, more than one of every four adults (28% of us) reported delaying or going without some combination of medical care, prescription drugs, mental healthcare, or dental care simply because they lacked the ability to pay.

Meanwhile, medical debt is growing all too rapidly. A Census Bureau analysis of such debt found that, in 2021, 15% of all American households owed medical debt — or 20 million people (nearly 1 in 12 adults). Indeed, the SIPP (Survey of Income and Program Participation) survey suggests that, in total, Americans owe at least $220 billion in medical debt, the biggest source of bankruptcy in the nation.

And of course, as I’ve written before, this is all connected to another reality: that life expectancy is down for everyone, while the poor can expect to die, on average, 12 to 13 years earlier than rich people. Worse yet, the death-rate gap between rich and poor in this country has risen by a staggering 570% since 1980. As the Washington Post reported, “America is increasingly a country of haves and have-nots, measured not just by bank accounts and property values but also by vital signs and grave markers. Dying prematurely has become the most telling measure of the nation’s growing inequality.”

Poor Health

In the face of all of this, you might wonder how things could get any worse. Recently, Congress announced potential cuts to another crucial food and health program for the poor. The Special Supplemental Nutrition Program for Women, Infants, and Children (known as WIC) is at risk of a $1 billion shortfall, essentially guaranteeing harmful cuts to that lifeline for low-income families and children. If Congress refuses to fully fund the program, current funding levels simply won’t cover all eligible participants.

In fact, the $1 billion shortfall now slated to occur equals 1.5 months of benefits for all program beneficiaries or six months of benefits for all pregnant women and infants participating in WIC. House Republicans are currently refusing to approve the budget for this vital program that helps mothers and children up to age five access staples like fruit, vegetables, and infant formula, and connects them to healthcare resources.

In a statement to NBC News, Agriculture Secretary Tom Vilsack called WIC, “one of the most consequential, evidence-based public health programs available.” He implored Congress to fully fund the program, which provides “life-changing benefits and services” to its participants.

And Vilsack is anything but wrong when he speaks of the importance of that pro-poor, pro-health program. An abundance of research suggests the critical role that WIC plays in “supporting maternal health and child development. WIC participation during pregnancy is associated with lower risk of preterm birth, lower risk of low birth weight, and lower risk of infant mortality.” Children on WIC are more likely to consume a healthier diet, and this impact only grows the longer a child stays in the program, which also has a significant reach. As the Department of Agriculture reports, “Nearly 40 percent of America’s infants participate in WIC, which is available only to pregnant women, new mothers, infants, and children who meet income guidelines and are determined to be at nutritional risk by a health professional.”

So Much More Is Needed

But as such programs are cut to the bone and more people experience a plethora of problems already plaguing the health of the nation, many are likely to give up entirely, assuming there’s nothing to be done and that it’s just too costly to address inequality and poor health. As someone who has been organizing among the poor for more than 30 years, however, I want to suggest that, as a nation, this just can’t be as “good” as it gets.

Across the span of my lifetime, there have been debates about how to address the larger health crisis in American society. When I was in high school, there was already debate about the effectiveness of establishing a national healthcare program, asPresident Bill Clinton and Hillary Clinton campaigned on expanding healthcare and actually proposed a new plan for it in 1993. At the time, I remember hearing criticism of the Canadian system of nationalized healthcare. People there, it was said, experienced long lines, way too much paperwork, and a lack of options for patients.

Today, considering the way our healthcare system is unwinding, I could almost laugh (however grimly) at what it would mean to have that Canadian system of years past. All too sadly, however, that country has followed the United States in cutting and privatizing its healthcare system.

Many consider the Affordable Care Act (ACA) one of the most important policiesadopted under the presidency of Barack Obama, given that more than 20 million people gained health coverage through it and the ACA’s policies made it easier for eligible people to enroll in Medicaid. In particular, the ACA expanded Medicaid coverage to nearly all adults with incomes up to 138% of the Federal Poverty Level ($20,783 in 2024) and helped states with matching federal dollars expand Medicaid to more of their residents. Yet the ACA didn’t go nearly far enough. To date, 40 states and Washington, D.C., have adopted Medicaid expansion, while 10 states have not. Even in states with Medicaid expansion, too many of us are still not covered. And now we’re witnessing one of the greatest attacks on health and healthcare in decades (and just imagine what we’re likely to face if Donald Trump becomes our next president and/or the MAGA Republicans take Congress).

What this nation truly needs is a complete overhaul of its healthcare system. As a start, Medicaid needs to be expanded, extended, and built into a single-payer, universal healthcare plan. Workers need the right to living-wage jobs with generous benefits, including guaranteed paid family sick leave. Social welfare programs like the Supplemental Nutrition Assistance Program, WIC, and the Child Tax Credit need to be strengthened so that the abundance of this society is experienced by everyone. Household and medical debt would have to be cancelled, while drug-recovery programs would need to be fully funded. And parks and recreation centers, as well as grocery stores with quality, affordable food, would have to proliferate, starting in poor communities.

It’s not enough to protest the unwinding of pandemic Medicaid programs. Even that classic protest chant — “They say cut back, we say fight back!” — doesn’t go far enough. Instead, the 135 million poor and low-income Americans, and for that matter, the rest of us, must make healthcare and so much more into basic human rights.

Let me end then not with words of mine but with Becca Forsyth’s challenge to Americans in her Poor People’s Campaign testimony that day in Albany. “We must stop this raging storm of policy violence that is killing our friends and neighbors,” she said movingly. “It doesn’t have to be this way! We can wield our votes as powerful demands. The time for sitting on the sidelines is over. We have to move forward together like our lives depend on it… the lives of our children! Because they do!!”

How right she is!

First published on TomDispatch.

Shared via Creative Commons.

Meritocracy ≠ Democracy

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Dissent: Monetary Myth-Busting

Slavko — Tue, 11 Aug 2020 19:01:05 +0000

Monetary Myth-Busting: An Interview With Stephanie Kelton

The author of The Deficit Myth on why national debt is not an obstacle to progress—and why the government can afford to fund its priorities.

Mark Levinson: Stephanie Kelton’s The Deficit Myth: Modern Monetary Theory and the Birth of the Peoples’ Economy is a foundational book on economic policy. If we don’t get the issue of the deficit right, we get almost nothing else right. This book couldn’t be timelier. Almost 50 million people have applied for unemployment insurance since the COVID-19 pandemic started. There has been a $3 trillion government response, much of which is expiring. The virus is still spreading in the United States, which will lead to more shutdowns and more unemployment. We are on the verge of catastrophic state and local government cutbacks. And we’re heading into an election where polls indicate that much of the American public believes that we have to address an unsustainable national debt and budget deficit. What does your book have to say to the current moment?

Stephanie Kelton: You captured the backdrop. Before the coronavirus pandemic, the Congressional Budget Office (CBO) was forecasting deficits in excess of a trillion dollars a year for the foreseeable future. To a lot of people that seemed alarming. Now look where we are. Since March, Congress has committed roughly $3 trillion to deal with the economic fallout related to the pandemic—all of it will add to the deficit—and they’re getting ready to add even more. This is happening on the heels of a Democratic presidential primary, where we spent the better part of a year listening to candidates put forward their agendas and, at every turn, getting dogged by the question, “How are you going to pay for it? Where is the money going to come from?” Every presidential contender—from Bernie Sanders to Amy Klobuchar—bent over backward to show how they would “pay for” their proposals without adding to the deficit. We spent a year arguing about where the money would come from, and then suddenly the world opened to a new reality. The coronavirus came, and Congress started spinning out multi-trillion-dollar spending bills, without any of these so-called “pay fors.” We had to act! And that meant adding to the deficit to fight the pandemic. That’s a perfect entry point for a book like this that speaks to the fears and anxieties that we have about deficit spending and adding to the national debt, both of which we are doing on an almost unprecedented scale right now.

Levinson: In your book you debunk a number of myths that are associated with the deficit. One widely held belief is that since households have to balance their budgets, so should the government. In 2010—when Democrats controlled the presidency and Congress, and unemployment was almost 10 percent—Barack Obama went on national television and said that, like most American families, the federal government had to tighten its belt. It was a defining moment, and the premature austerity led to an excruciatingly slow economic recovery that probably contributed to Trump’s victory in 2016. Talk about the myth of the government as a household.

Kelton: I had the same reaction, and I remember the speech. It was the State of the Union address. Even before that speech, in 2009, just shortly after taking office, when we were staring down the worst economic downturn since the Great Depression, [Obama] was asked in an interview, “At what point do we run out of money?” And he said, “Well, we are out of money now.” That was like a punch in the gut for me. Because I sensed that what we were facing was not a garden-variety economic recession. That this was going to be orders of magnitude more severe, and that what Congress needed to do was step in to provide the fiscal support that was going to be necessary to prevent a very protracted and deep downturn. To hear him use those words was definitely not a good sign.

You ask why we analogize the federal government’s finances with personal finances. I think politicians want to be able to communicate with people effectively. And they think that the best way to communicate about complex issues, like the federal government’s finances, is to talk in ways that resonate with us. So, the framing becomes mom and dad at the kitchen table, working to balance the budget; just like you, the federal government needs to start getting its spending in line with its income. You know you can’t spend more than you take in year after year; it’s risky to pile on debt; you can go broke.

Levinson: Why is that a myth?

Kelton: The simplest way to say it is that government issues the currency, and households and businesses don’t. If you have the sole legal authority to issue the U.S. dollar—it could only come from you—would you ever worry about running out? Would you ever worry about bills coming due that you couldn’t afford to pay? Would you worry about being forced into bankruptcy? No, you wouldn’t; you’re the issuer of the currency. It’s the rest of us who have to worry. It couldn’t be clearer in this moment what makes us different from the federal government. The federal government is the one propping up the airlines (and other industries), sending out $1,200 checks to most Americans, topping up unemployment insurance with an extra $600/week (if you are fortunate enough to get the system to recognize you are unemployed), helping small businesses cover some expenses and keep their workers on payroll, and so on.

If all of us had the currency-issuer power of the federal government, then small businesses would look after themselves. The airlines would look after themselves. That’s obviously not how it works. State and local governments are begging the federal government for assistance. Governors and mayors across the country have been saying to Congress, “We need your help.” The reason is that state and local governments—like households and private businesses—can’t issue the currency. We’re all trapped in the same position, vis-à-vis the currency. We are all users of the dollar. The federal government is in an elevated position; it’s the issuer of the currency. It can do what the rest of us can’t do.

Levinson: Why isn’t the fact that the U.S. government is going to accrue trillions of dollars of debt a burden on future generations?

Kelton: The deficit hawks try to convince us that at some point, it has to be paid back, and that the bill is going to fall on the rest of us. That’s not the case at all. Calling this thing the national debt is a big problem. What’s really happening is that the government is basically making some of its payments with interest-bearing dollars. We call those dollars U.S. Treasuries. Unfortunately, we call the entire stockpile of these financial instruments the national debt. And the word “debt” creates all sorts of unnecessary anxiety in people. It reminds people of their credit card debt, their car payment, their student loan debt, their mortgage, and they say, “Well, debt can be dangerous. I don’t want to be in debt. I don’t want too much debt. My country is in debt, so that’s bad.”

Levinson: Are there limits to the deficit? Can the government just spend in an unrestrained manner?

Kelton: There are limits. If I had to describe the Modern Monetary Theory (MMT) project in a single sentence, I would say it is about replacing an artificial revenue constraint with a real inflation constraint. So there are limits. But the limit is not a predetermined numerical level or a percentage of the budget. There is no strict financial constraint. A currency-issuing government can afford to buy whatever is priced and available for sale in its own currency. The limit is the impact of the spending. Not the spending itself, and not the deficit—the limit is inflation. That is central to MMT.

I would go further and say that no school of macroeconomic thought treats inflation more seriously than MMT. We place it at the center of the analytic framework. Inflation is the binding constraint. We also face ecological constraints. Just because we can extract fossil fuels and other forms of carbon-emitting, polluting sources of energy doesn’t mean we should do that. No one who has studied MMT can claim that MMT advocates unlimited spending. MMT is about identifying the real limits, and not cowering in fear of running out of money or adding to the deficit.

Levinson: In your book, you claim that misplaced emphasis on the fiscal deficit covers up other deficits that we should be really concerned about. What do you mean by that?

Kelton: Today, there is a yearning to return to normal. But what did normal, before the pandemic, look like? Several trillion dollars of needed repairs in our crumbling infrastructure. Normal was 87 million Americans who either didn’t have health insurance or were underinsured. Normal was 500,000 medical-related bankruptcies every single year in this country. Normal was 40 million people living in poverty. Normal was millions of people who aren’t prepared for retirement; who can’t afford to send their kids to school or can’t pay back their student loan debt. Normal was 40 percent of families not having $400 set aside to handle an unexpected financial emergency. Normal was a great city like Flint, Michigan, not having safe water. These are the deficits that matter. Those are the kinds of shortfalls that I wish that we were all worried about.

Levinson: Explain MMT and why you become a supporter.

Kelton: When I first started writing about and researching government finance, public money, and the deficit, there was nothing called MMT. That label emerged later.

I was in graduate school, studying economics in the mid-1990s at Cambridge University, when I won a fellowship to the Levy Economics Institute. An economist named Randall Wray was there, and he was someone I had studied under, briefly, before starting my program at Cambridge. He was working on a book called Understanding Modern Money, and that’s when I really started to dig into a lot of this stuff. I found the ideas both jarring and fascinating. It was very different from what I had learned as an undergrad studying economics, and what I had learned as a graduate student at Cambridge. Reading early drafts of Wray’s work, and also the writings of Warren Mosler, led me to begin my own research into the mechanics of monetary operations. I wanted to get down in the weeds and understand exactly how the Treasury and the Fed coordinate their payments. I started reading and researching and talking to people at the Treasury and Fed, and [after] maybe six months or so, I came to understand how government finance really works.

At that point, I realized that some of the more jarring parts of MMT—like the claim that the federal government doesn’t spend “taxpayer money”—were sound. I worked through the mechanics and I could see that Wray and Mosler had the sequencing right: the government spends first and then taxes or borrows. Taxes weren’t paying for anything! That was totally new to me. I had been trained to believe that the government needs our money, and that the purpose of taxing and borrowing was to help the government raise revenue to pay its bills. That’s how I was trained to think about these things. But once I persuaded myself that the sequencing that I had been taught was wrong, that the government (or one of its agents) has to spend or lend the dollars into existence before anybody can use them to pay taxes or buy government bonds, then it just flipped my worldview around. I started seeing the federal government as the issuer of the currency, and everything follows from that.

Levinson: Within the progressive economic community there is a debate between progressive, or left, Keynesians and some adherents of MMT. Many progressive economists argue that they arrive at the same policy conclusions as you but they don’t need MMT to get there.

Kelton: It’s one thing to be right. It’s another thing to be right for the right reasons. Because if you’re right for the right reasons, there’s a higher probability that you will continue to get things right, because you’re operating with the correct analytical framework. You can be right accidentally, with a traditional neoclassical economic framework. You can also use conventional macro to demonstrate what should be intuitively obvious, like showing that austerity in the midst of a depression is bad policy, as people like Paul Krugman did during the Great Recession. Of course, MMT economists were also pressing lawmakers to embrace larger deficits. That wasn’t exactly a difficult call. But what about getting the harder things right? For example, the euro. MMT economists were in a distinct minority, warning years before the euro was officially launched that giving up sovereign currencies in favor of a common currency would create default risk and raise the potential for a debt crisis—exactly what happened in countries like Italy, Spain, and Greece. Krugman’s model didn’t help him see that coming, because it didn’t account for the importance of currency regimes in analyzing the limits on government borrowing.

Or what about the budget surpluses during the Clinton years? Or the Bush tax cuts? Or the Trump tax cuts? While MMTers warned that the Clinton surpluses were unsustainable and that the tax cuts posed no risk to the government’s finances, Krugman was talking about deficits driving up interest rates and warning that that the United States could end up like Greece. He wrote about being puzzled by the fact that Japan could borrow at extremely low interest rates, despite having the world’s largest public debt, while the Italian government faced rates that were five times as high, even though their debt-to-GDP ratio was substantially lower. MMTers were never puzzled by the divergence in borrowing costs. To us, the answer was obvious. One country (Japan) was borrowing its own sovereign currency, and the other (Italy) had abandoned its sovereign currency and was now obligated to repay bondholders in a currency (the euro) that it could no longer issue. That’s at the core of MMT: it is about monetary sovereignty. If you understand the difference, then you understand that countries with a high degree of monetary sovereignty don’t have to be fearful of deficits raising borrowing costs and pushing a country into bankruptcy. Krugman missed all of this stuff. I believe that after he met Mosler (I have a very nice photo of him holding Mosler’s book), Krugman’s views began to shift. A couple of years after writing about the “puzzling” difference between Japan and Italy, he wrote a piece explaining that currency regimes appear to explain the difference. He was adopting more MMT. In his writings you could see him inching closer and closer to where we had been a decade earlier.

I’ll give you one more example of a big policy conclusion that I think MMT economists got right and more mainstream Keynesian economists got wrong. In November 2017, Larry Summers was all over the media warning that if the Republicans succeeded in passing the Trump tax cuts, the United States would end up “living on a shoestring for decades to come.” He warned that Congress would be unable to use fiscal policy in the event of a military crisis or to respond to the next recession. But look where we are. The coronavirus came, and Congress immediately started using fiscal policy to support the economy, adding trillions of dollars to the deficit. This idea that the deficits of the past somehow constrain the ability of Congress to commit to more spending in the present (or future) was just wrong.

Levinson: But it’s not just economists like Krugman and Summers. Many more heterodox economists agree with your policy conclusions but don’t adopt MMT.

Kelton: I have spent literally zero hours of my professional career critiquing the work of other heterodox economists. None. That’s not my interest. I’m out to challenge the mainstream, not my heterodox friends, whether they’re Marxists or institutionalists or post-Keynesians. It is true that we often reach similar policy conclusions, but we get there using different analytical frameworks. Sometimes, I think they arrive at the right conclusion for the wrong reasons. But I don’t go around criticizing them for not adopting our framework.

Levinson: The mainstream of the economics profession seems to have moved a lot on the issue of the deficit. Last year the president of the American Economic Association, Olivier Blanchard, gave a speech in which he argued that concerns about public debt have been exaggerated; Summers and Jason Furman wrote an important anti-austerity piece in Foreign Affairs. Yet one of the premier Keynesian economists of our time, Robert Skidelsky, recently wrote in an essay with Mariana Mazzucato that there is “little evidence that any new fiscal thinking is underway.” How would you characterize the current moment?

Kelton: That line about the lack of new fiscal thinking grabbed me as well. I think there’s a lot of evidence! You cite some of it. Skidelsky, for example, has recently become an outspoken advocate for a job guarantee. And Mazzucato has been doing great work on climate change and the importance of public investment as a catalyst for innovation. She has a new book coming out where, I think it’s fair to say, she treats my arguments in a very sympathetic way. In that same essay, they wrote, “The state must be given a permanent, continuing role in guiding, stabilizing, and if need be, transforming economic life. Intervening only in bad times to fix the system guarantees another crisis.” That is exactly the kind of new thinking we need!

Levinson: You were part of the Biden–Sanders unity task force. They just issued their report. How much of your analysis is embodied in those recommendations?

Kelton: Some. You will see in there a couple of paragraphs about reforming the federal budgeting process. This is crucial if we are going to do something big on climate or infrastructure. The way the budget process currently works is that you send the bill over to CBO, and ask them to score it. CBO then tells lawmakers whether (and by how much) it will add to the deficit and increase the national debt over time.

This process is designed to elicit the least useful feedback you could possibly ask for. I think we all understand that the incoming administration is going to be facing numerous crises that are going to require the presence of large fiscal deficits for an indeterminate period of time. We cannot afford to return to the “pay for” game, where lawmakers refuse to do anything that adds to the deficit. And so how do you accomplish that? How do you make sure that the incoming administration isn’t hamstrung by “pay as you go” budgeting rules, or CBO, or whatever? Because it will be much harder to pass legislation if Democrats are only willing to do things that will satisfy the scorekeepers over at CBO. The task force recommendations include some language about how to begin to think about alternative metrics by which to evaluate proposed spending.

Levinson: Is the job guarantee in there?

Kelton: No, not a guarantee. But there is some language in there about direct job creation of the kind that was undertaken by FDR in the New Deal. That leans—a little bit—into the MMT proposal for public service employment. I think we’re ultimately going to need something as bold as what MMT advocates, but you could fill jars with the sweat that went into getting the language we got into the recommendations document.

Levinson: In the Financial Times, Martin Wolf said this about your book: “In my view, it is right and wrong. It is right, because there is no simple budget constraint. It is wrong, because it will prove impossible to manage an economy sensibly once politicians believe there is no budget constraint.”

Kelton: I thought that was an extraordinary statement. I believe in democracy. MMT is not granting any new powers or authorities to Congress. Congress knows that it has the power of the purse. The idea that MMT is letting the cat out of the bag and somehow opening us up to new vulnerabilities—I just don’t understand. What I think the book does is attempt to clear away the myths and misunderstandings about deficits and debt. If someone confronts their elected representatives and says, “Why aren’t you doing more to get clean water to this district? Or to get infrastructure repaired?” and their representative responds, “I’d love to be able to help on that, but we’ve got this big deficit. And we have this enormous debt that needs to be paid off,” I want people who read the book to understand that this is an evasion. I want people to understand that the deficit and the national debt are not obstacles to progress and that our government can always afford to fund its priorities. The aim of the book is to empower citizens with a truer understanding of what’s possible and what the limits are. Let’s be honest with the people and then hold the politicians accountable at the ballot box.

Mark Levinson is Chief Economist of the Service Employees International Union (SEIU) and the book review editor at Dissent.

Stephanie Kelton is a professor of economics and public policy at Stony Brook University. She is a leading expert on Modern Monetary Theory, a former Chief Economist on the U.S. Senate Budget Committee, and the author of the New York Times bestseller The Deficit Myth.

First published on Dissent.

Shared via Creative Commons.

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