On today’s BradCast: Avery important lesson from the coronavirus crisis for progressives and for all Americans that I hope we are all able to remember once this crisis has finally ended. [Audio link to full show is posted at end of article. Please click it!]
Britain’s 71-year old Prince Charles, 71-year old Rock-and-Roll Hall of Famer Jackson Browne and 81-year old playwright Terrence McNally all tested positive. The prolific playwright succumbed on Tuesday in Florida. They were all able to get tested for coronavirus. Tens, if not hundreds of thousands of Americans still cannot. Add it to the list of national disgraces we are collectively enduring as we stay-at-home as much as possible in hopes of slowing the spread to keep our medical system from becoming overwhelmed.
That said, Senate Democratic and Republican leaders have come to an agreement on another emergency spending bill to address a bit more of the growing fallout from the global coronavirus pandemic. The bill, if allowed to pass in the Senate by four Republicans now blocking it, and if House Democrats can pass a similarly acceptable bill, will cost a record $2 trillion. That’s half the size of the nation’s annual $4 trillion annual federal budget, and many experts agree, there will need to be much more spending hereafter.
And yet, nobody — not Republicans or Democrats in the Senate, House of Representatives or White House — seems to be complaining that we don’t have the money to pay for it, or that we must cut somewhere else or raise taxes to be able to afford it. It is as if, as our guest today, Stony Brook University Professor of Economics and leading authority on Modern Monetary Theory STEPHANIE KELTON notes, we are able to just “conjure into existence, in a matter of days, a couple of trillion dollars,” enough money for the largest spending bill in the history of the country. And, as it turns out, she is right!
As Rep. Alexandria Ocasio-Cortez (D-NY) noted recently in response to the sudden disappearance of so-called “Deficit Hawks” on Capitol Hill: “It’s actually a fascinating progressive moment, because what it’s shown is that all of these issues have never been about ‘how are you going to pay for it?’ It’s never been about whether we have the capacity to do these things. All of these excuses that we have been given as to why we can’t treat people humanely have suddenly gone up in smoke. And what has been revealed is that all of these issues were really about a lack of political will and who you deemed worthy to be in an emergency or not.”
Kelton, the former Chief Economist for the U.S. Senate Budget Committee, has been trying to make these points of late in Twitter threads, New York Times op-eds, and her upcoming book The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. As she tells me today, “Congress will always find the funds to accomplish the things that it considers a priority. If that’s tax cuts, then that’s the priority, and the money will be there. If it’s wars, that’s the priority. If it’s dealing with a global pandemic, then that suddenly becomes a priority.”
She laments that Democrats, over months on the Presidential campaign trail, have not been able to educate the American public about these facts and how difficult it has now become — after years of phony claims from politicians (of both parties) that the U.S. was going broke or that government should be run by the same fiscal rules that govern households and businesses — “to disabuse people of these myths that we have heard from our politicians, pundits and reporters.”
She argues “There is a time and a place for offsets. It’s not a free lunch”, but Bernie Sanders’ call for “canceling $81 billion of medical debt is nothing. It’s everything to the people who have medical debt. But from the perspective of the federal budget, it’s practically a rounding error, it’s so trivial. We could have done that and not offset it,” she says. “The federal government’s finances don’t work like ours. They’re not subject to the same constraints as a household or a private company. Once you get your head around that, a lot of other things follow.”
“A year ago, could we have just done free college or Medicare For All or whatever? The answer is yes. Congress can write and pass any bill it chooses, period. The risk, though, is that if you don’t include offsets, and you’re simply authorizing these huge spending bills left and right, at some point you’re going to eat up all of the fiscal space left in the economy. In other words, it’s going to become inflationary. So there is a time and a place for offsets.” That time, apparently, is not now, however. And she hopes that after this emergency finally passes, enough Americans will remember what happened here, how easy it was to “find” all the money when it was needed, to finally do away with the notion that endless wars and corporate subsidies and tax cuts for the wealthy are the only things we can afford to spend money on to “promote the general welfare” of the American people.
We discuss all of that and much more today, including details on what the proposed Phase III emergency coronavirus spending bill will and won’t pay for, and the good news that America’s Governors — both Democratic and Republican — seem to be rejecting our corrupt, man-child President when it comes to his dangerous coronavirus idiocy.
Stephanie Kelton “hopes that after this emergency finally passes, enough Americans will remember what happened here, how easy it was to ‘find’ all the money when it was needed, to finally do away with the notion that endless wars and corporate subsidies and tax cuts for the wealthy are the only things we can afford to spend money on to ‘promote the general welfare’ of the American people.”
AMEN.