We Can Spend Enough To Meet Our People's Needs— Politics Is About Who Determines What The Needs Are

Thomas Witkop’s Tutorial With Stephanie Kelton

On his blog yesterday, Noah Smith noted that European Greens got their asses kicked in the EU election that past weekend, especially in German and France (although the Greens actually gained seats in Italy, Denmark, Netherlands, Romania, Croatia, Latvia and Slovenia). It’s being attributed voters not being in “a mood to prioritize the fight against climate change over bread-and-butter issues.” Smith was excited to talk about “degrowth” and “making people poorer in order to fight climate change... The reality is that Europe is already embracing degrowth— perhaps not intentionally, but in actual fact. And this is not only making Europeans poorer, it’s making the region much more vulnerable to the imminent threat of a China-backed Russian invasion. The Greens’ message to Europeans is essentially that this is a good thing— the necessary price of reducing carbon emissions a little bit faster— and that what the region needs is more of the same. European voters are not having it.” This is such utter nonsense. The Euro— and a green agenda— are not dependent on taxing working families into poverty. All it would take to reach the group’s climate goals is the same kind of shared political will it would take to defeat Smith’s nonsensical “China-backed Russian invasion.”

Blue America congressional candidates have had the opportunity to avail themselves of something no one seems to have ever offered Noah Smith, a chance to sit down and talk with economist Stephanie Kelton about where the money comes from to, for example, institute a Green New Deal. The latest candidate who did do just that was Thomas Witkop, who’s running for a House seat held by reactionary Brian Mast along Florida’s Treasure Coast, just north of Trump’s Mar-a-Lago swamp. I asked Witkop if he’s tell us about the experience— and he did. Stephanie Kelton sent over these paragraphs from The Deficit Myth for DWT readers today. You'll soon see why:

A Talk With Stephanie Kelton

-by Thomas Witkop

Yesterday, a few members from the campaign and I had the great treat of talking to legendary economist Stephanie Kelton. While I have read a considerable amount on MMT, I never fully grasped the concept. As a candidate for US House of Representatives, I'm often asked by voters “how will the government pay for your goals of universal healthcare, education, social security, and addressing climate change?” Thanks to Stephanie, I now know my answer: “We will pay for these human rights the same way we pay for everything else.” Here were my key takeaways from the conversation:

1. MMT is a framework for analyzing policy options. Folks that call MMT fiscally irresponsible (like Mitch McConnell) disregard the national deficit all the time as long as it supports their agenda. They don’t ask “where will we find the money?” when it comes to spending on national defense or cutting taxes (Trump 2017 tax cuts). But then they hit every news outlet to talk about reckless spending for programs for the bottom 99 percent (such as the Biden American Rescue Plan) when that increases the national deficit. Both increase the deficit and both are a windfall for the American public— just for different groups.

2. Increasing the deficit has historically been good for our population. When the government injects 100 dollars into the market and only taxes out 90, someone gets 10 dollars and can spend that on REAL benefits like safer infrastructure or education or anything else we put money into. The budget of the government is not supposed to balance and we shouldn’t try to make it balance. Instead, we should focus on two economic goals that are actually felt by the population: inflation and employment. 

3. We should stop trying to “find the money.” Bernie always says we have to increase taxes or come up with the money or scrap the cap so that we can pay to provide human rights like healthcare, education, or nature. Realistically, it’s much easier to pass legislation to spend than it is to increase taxes because the rich don’t like to increase taxes and they influence the halls of power. The question is not “where to find the money,” but how safe is it to increase money in the economy without taxing it out. The answer to that lies in how much slack exists in the economy which is best judged by many factors including whether we are close to full employment.

Before this conversation, I sympathized with folks that believed not worrying about the deficit was too good to be true, but I also knew that the USA (the richest country in the world) has the power to more effectively support our working class who do not have the sway that the one percent have in the halls in Congress. I also knew my role models— smart leaders who refuse super PAC money and only have the interest of the American public at hand— understand the government refuses to spend on the welfare of our country’s working class not because we don’t have the money, but because lawmakers lack the political incentive. Thanks to Kelton (and Congressman Yarmuth's CSPAN session about MMT) I understand the mechanism of spending that offers a feasible way to move closer to the great American ideals outlined in FDR's Second Bill of Rights.

And for anyone who still hasn't seen Finding the Money, this short clip from the film, a film which goes a long way towards stripping out the mysteries behind how money works-- and should work-- explains why billionaires so desperately need to be taxed. I would say "out of existence," but far be it for me to put words in anyone's mouth, let alone Thomas Witkop, Stephanie Kelton or Maren Poitras, the producer of the movie, who was generous enough to allow us to make the clip. Please enjoy it and think about it. You won't see it anywhere else, at least for now.