The recently passed $2.1 trillion stimulus proves that Congress has always had the power to fund big spending packages, without worrying about how to offset the costs. That is according to Modern Monetary Theory, an economic school of thought that’s been gaining prominence in recent years, including among rising progressive political stars like Congresswoman Alexandria Ocasio-Cortez.
Stephanie Kelton
Stephanie Kelton, Modern Monetary Theory’s most prominent advocate, spoke to Capital & Main about the federal government’s response to COVID-19 and the oncoming economic recession. Kelton is a professor of economics and public policy at New York’s Stony Brook University. She has served as a chief economist for Democrats on the U.S. Senate Budget Committee and as an advisor to Senator Bernie Sanders’ 2016 and 2020 presidential campaigns. Her new book, The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy, will be published in June.
This interview has been edited for length and clarity....
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2 comments:
Stephanie seems to support UK policy. She says “Even the United Kingdom’s conservative government is telling employers, “We will pick up the tab for 80 percent of payroll, just keep hold of your workers.”
What’s the point of that? There’s nothing much to spend money on, given that most retail outlets are shut and airlines are closed down. So what would be wrong with paying standard unemployment benefit?
Re “keep hold of your workers”, where are those workers going to go? There’s precious few vacancies out there. And when the recovery comes, 90% of employees’ best option will be to return to their original jobs: after all, their old employers know them and trust them. Why would the employer want anyone else?
Is it for public relations? To keep the unemployment rate artificially low?
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