But How Are We Going To Pay For it? Modern Monetary Theory and the Public Purse

Amidst panic over our preparedness in response to public health crises such as Covid-19, private debt accumulation, and the urgency of the climate emergency, our nation faces pressing questions about the role of policy and government in the 21st century. The Green New Deal, Medicare For All, and student debt cancelation are a few major propositions that seek to transform U.S. institutions by expanding and guaranteeing social rights and relief. These propositions will include introducing far-reaching changes into our entire economy in order to build an energy system beyond fossil fuels and environmental injustice.

While remaining very popular throughout the nation, these efforts face constant attacks and suspicion under the guise of whether it is possible to afford them. In parallel to the demands for public officials to show dollar for dollar where the money would come from, the public conversation also centers around fears of deficits and the national debt. What do these words really mean and what can our government actually do? In fact, what the heck is money?

In this Olio, we will turn to Modern Monetary Theory (MMT), which has become one of the most relevant analytical perspectives challenging the validity and value of the entire economic mainstream, particularly in Macroeconomics. We will examine what MMT actually argues about the nature and origin of money, the purpose of taxes, and the issue of inflation. The goal will be to understand how the insights of MMT lead to a fundamental shift in how we evaluate policy and how this is fundamental to successfully achieving social change. So what is all the hype? Is this just about “printing money” or is this a potential paradigm shift in politics?

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