Learn About MMT (Modern Monetary Theory) from Progressive Economist Warren Mosler:
Launching its new speaker series, LIA (Long Island Activists), in conjunction with NYPAN (New York Progressive Action Network) presented an informational session with Warren Mosler. Mosleer is an expert on MMT (Modern Monetary Theory). The event was zoomed on April 8, 2021.
A Progressive economist and founder of a successful hedge fund based on his theories about the money supply, Mr. Mosler is the author of numerous articles and monographs that explain why the prevailing deficit model of funding the government through taxation and borrowing “has it backward.” By that, he means that conventional thinking takes it as a given that we first consider how much money the Treasury has or can raise, and then decide what we can afford. This thinking results in large deficits that will supposedly bankrupt future generations. Mosler believes that public spending should not depend upon the money supply, but that the money supply should increase to meet the public’s needs. Mosler’s Law states: “No financial crisis is so deep that a sufficiently large increase in public spending cannot deal with it.”
According to traditional economic theories, inflation results when the government increases the money supply. But proponents of MMT counter that inflation will not necessarily result with an increase in the money supply because such an increase would be counterbalanced by an increase in borrowing by the private sector.
As a Progressive economist, Mosler sees the traditional deficit model as impeding the Progressive agenda, including Medicare for All. If we had Medicare for All, he explained millions of people in the insurance business would lose their jobs. But…that is not necessarily a bad thing when you consider that these people could then be retrained into jobs that would, unlike insurance jobs, directly benefit society as a whole: jobs in fields such as healthcare itself, education, environmental protection, and scientific research.
Mosler further explained the effects that MMT would have on the chronically unemployed. As it is now, it is difficult for an unemployed person with limited skills to get a job in the private sector. But the government could employ these people, providing not only a living wage, but the training, experience, and self-esteem that would enable them to transition into the private sector.
Mosler is optimistic not only about the potential of MMT to transform the economy of the United States as well as other countries, but also about its growing acceptability. As we grapple with multiple crises—the pandemic, the ever-growing income inequality, climate change—MMT represents a new way of viewing the relationship between public needs and public funds.
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