by It was 2020, and Trump was responding to a question about a .2 trillion fiscal package (emergency COVID spending plus day-to-day operations). The reporter might have been confused about where the money was coming from, but Trump wasn’t. “The beautiful thing about our country is…we can handle that easily because of who we are—what we are—it’s our money…it’s our currency,” he explained.…Understanding what it means to issue a sovereign currency is at the core of Modern Monetary Theory (MMT). If you’re new to MMT, click this link and watch Professor L. Randall Wray explain. The bottom line is that a currency-issuing government, like the United States, never has to worry about “finding the money.” As Wray explains, the money gets spent into existence when Congress authorizes a budget
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It was 2020, and Trump was responding to a question about a $6.2 trillion fiscal package (emergency COVID spending plus day-to-day operations). The reporter might have been confused about where the money was coming from, but Trump wasn’t. “The beautiful thing about our country is…we can handle that easily because of who we are—what we are—it’s our money…it’s our currency,” he explained.…Understanding what it means to issue a sovereign currency is at the core of Modern Monetary Theory (MMT). If you’re new to MMT, click this link and watch Professor L. Randall Wray explain. The bottom line is that a currency-issuing government, like the United States, never has to worry about “finding the money.” As Wray explains, the money gets spent into existence when Congress authorizes a budget and the payments are made. (Incidentally, it works that way in the UK and in other countries with sovereign currencies as well.)
If you’ve been following MMT for a while, you’ve probably heard Warren Mosler refer to the U.S. as the “scorekeeper” for the US$. His point is that we shouldn’t think of a currency-issuing government as “having” or “not having” any dollars. The scorekeeper maintains the spreadsheet by crediting and debiting bank accounts as the government spends (adds) and taxes (subtracts) dollars from the various “players” in the game. When there’s a Congressional appropriation for $6.2 trillion, the government creates $6.2 trillion. It literally spends the money into existence. That’s the power of a sovereign currency.
It’s hard to see why anyone who understands how a sovereign currency works would be pushing a sovereign wealth fund. Even if it became “one of the biggest funds” in the world, as Trump envisions, it wouldn’t give the federal government any spending power it doesn’t already have.
The US Needs a Sovereign Wealth Fund Like a Fish Needs a Bicycle
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders