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Tag Archives: Modern Monetary Theory

Explaining Why Federal Deficits Are Needed

By Thornton (Tip) Parker Most MMT advocates probably took months to get comfortable with it.  But like a personal computer, one need not understand its innards to use its power.  The great power of MMT is its lesson that the federal government can create new dollars by running deficits to do things that should be done.  But the lesson is counterintuitive and will be rejected by voters unless it can be explained convincingly in a few minutes.  This paper offers five nuggets for explaining it...

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Real Fiscal Responsibility, Vol. II: The Peterson Network, Inequality, and the Failure of Neoliberalism

This is how the mission of the President’s National Commission on Fiscal Responsibility and Reform was defined by the White House on February 18, 2010: The Commission is charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. This result is projected to stabilize the...

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Tax Credits and Dollars—Playing Charades with Low-Income Housing

By J.D. Alt Here is what the HUD.GOV website says about the status of low-income housing in America: “Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. An estimated 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing. A family with one full-time worker earning the minimum wage cannot afford...

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DEBT-FREE MONEY AND BANANA REPUBLICS, PART TWO

By L. Randall Wray My previous blog sparked a lot of discussion, especially over at Naked Capitalism. I do pity Yves Smith! There’s enough nonsense in the commentary to populate a large nation. As I have argued, it is very hard to figure out what the debt-free money folks want as they are confused on the accounting, vague on the terminology, and rarely provide details on their proposal. However, a reader has directed me to a fine published article that has mostly got the accounting right,...

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DEBT-FREE MONEY AND BANANA REPUBLICS

By L. Randall Wray Some time ago, I labeled the “debt-free money” campaign a non sequitur in search of a policy. (See here.) However, this non sequitur refuses to die. I went on to joke that if they want a debt-free money, they ought to propose that government issue bananas as currency. I frequently am asked to do interviews and I almost always accept them. However, when I was asked last week to participate in a radio show devoted to debt-free money, I struggled mightily to get out of it....

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MMT and Bernie Sanders

L. Randall Wray Yesterday Senator Bernie Sanders gave an important speech in which he invoked President Roosevelt’s “second bill of rights” in defense of his platform. As Bernie rightly pointed out, all of Roosevelt’s New Deal social programs to which we have become accustomed, were tagged as “socialism”—just as pundits are branding Bernie’s proposals as dangerous socialist ideas. You can see Bernie’s prepared remarks here. Just before Bernie’s speech, I was asked to do an interview with...

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