We have been indoctrinated to transfer our income and wealth to the top continuously. The fact is, we can print money responsibly without borrowing money from the oligarchy.
We can print money responsibly!
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The notion that a sovereign nation like the United States should refrain from printing its own money to fund deficit spending is a flawed and outdated economic perspective. The United States can responsibly print money to finance progressive policies without triggering runaway inflation. The core principles of Modern Monetary Theory (MMT) provide a compelling framework for understanding why this is possible and necessary for achieving social and economic justice.
The issue’s heart lies in a fundamental misunderstanding of modern economies’ operations. Critics of printing money often invoke fears of hyperinflation, drawing misguided parallels to historical examples like Weimar Germany or Zimbabwe. However, these instances of hyperinflation were caused by unique circumstances, such as reparations in Germany and a collapse in productive capacity in Zimbabwe, which do not apply to the current U.S. economic context. Stephanie Kelton, a leading proponent of MMT, emphasizes that the key to preventing inflation is ensuring that spending does not outstrip the economy’s productive capacity. This means that as long as there is slack in the economy—underutilized labor and capital resources—additional government spending can be absorbed without leading to significant inflation.
Current inflation is not driven by excessive government spending but by corporate greed and supply chain disruptions. Ample data shows that corporate profits have surged even as prices have risen, indicating that companies are using the cover of inflation to pad their margins. Thus, the inflation we see today is not a consequence of too much money chasing too few goods but rather a result of market manipulation by powerful corporate interests.
One of the most perplexing aspects of current fiscal policy is why the U.S. government borrows money by issuing bonds when it can simply create money. This practice of borrowing from private investors, including the wealthy, leads to an unnecessary transfer of wealth through interest payments. In fiscal year 2023, the U.S. government spent over $600 billion on interest payments alone. This money could have been used to fund healthcare, education, infrastructure, and other critical needs. By printing money directly, the government can avoid these interest costs and redirect resources to where they are most needed.
MMT proponents argue that the government, which issues the currency, cannot go bankrupt in the same way a household or business can. Unlike households, the federal government does not need to balance its budget and can always create more money to cover its spending. The real constraint on government spending is inflation, not solvency. If the government spends in a way that matches the economy’s capacity to absorb new money, it can finance its operations without causing harmful inflation.
A common critique is that printing money will inevitably lead to inflation. However, this critique fails to account for the context in which money is printed. When the economy is operating below its potential, with high unemployment and idle resources, additional government spending can stimulate economic activity without causing inflation. The COVID-19 pandemic provides a clear example: during the crisis, massive government spending helped to stabilize the economy without leading to runaway inflation. Many economists argued that the stimulus was insufficient and more spending was needed to address the economic fallout fully.
Furthermore, progressive policies such as universal healthcare, affordable housing, and green infrastructure are not just expenditures but investments in the economy’s future. These policies can enhance productivity, create jobs, and increase economic stability. For instance, investing in renewable energy addresses climate change, creates jobs, and reduces energy costs in the long run. Similarly, providing universal healthcare can lead to a healthier workforce, reducing absenteeism and increasing productivity.
The practice of borrowing money from the wealthy to fund deficit spending entrenches economic inequality. Wealthy individuals and corporations purchase government bonds, earning interest payments funded by taxpayers. This results in a wealth transfer from the general public to the rich, exacerbating income inequality. By contrast, printing money to finance deficit spending bypasses the need to borrow and the associated interest payments, ensuring that government resources are used more efficiently and equitably.
Moreover, the fear that deficit spending and money printing will devalue the currency is largely unfounded in the context of a sovereign currency issuer like the United States. The value of the U.S. dollar is determined by a complex set of factors, including the economy’s overall health, interest rates, and global demand for dollars. As long as the U.S. remains a dominant economic power with a stable political system, the dollar will continue to be a reliable store of value.
The United States can and should print money responsibly to finance progressive policies. This approach aligns with the principles of MMT and addresses the real economic constraints of inflation and productive capacity. By doing so, the government can avoid unnecessary interest payments, reduce income inequality, and make critical investments in the nation’s future. It is time to move beyond outdated economic dogmas and embrace a more rational and equitable approach to fiscal policy. The progressive vision of a just and prosperous society depends on it.
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