Maybe Modern Monetary Theory is an answer to the COVID-19 economic crisis
Depends on if you think debt matters. For an individual, a household or even a generation, sure it does. But what about a nation?
It’s a question that’s become even more urgent as the federal government passes one multibillion-dollar aid package after another and the Fed pumps billions more into the economy. The Congressional Budget Office has more than tripled its original projected 2020 budget deficit to $3.5 trillion.
And while that number might make a deficit hawk’s feathers fall off, Modern Monetary Theory says it’s actually just not as big of a deal as it sounds. Better instead to spend massively to fight off economic collapse and pervasive problems from health care to climate change.
We’ve been teasing this episode for a while, and we finally got the MMT expert on to talk about it. Stephanie Kelton is a professor of economics and public policy at Stony Brook University, and she served as an adviser to Sen. Bernie Sanders’ presidential campaign. Her new book, “The Deficit Myth” is out June 9.
Today Kelton walks us through how MMT works, why it’s not as counter-intuitive as it sounds and where the will is at the Capitol to actually utilize it. Plus, we’ll hear from listeners dealing with the ripple effects of this crisis on child care and health care, and an epidemiologist weighs in on the limitations of digital contact tracing.
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Some of the links we talked about this week:
- “The Economist Who Believes the Government Should Just Print More Money” in the New Yorker
- “Is modern monetary theory nutty or essential?” in The Economist
- “Stephanie Kelton: ‘They’re going to have massive deficits. And it’s fine’ ” in the Financial Times
- “Dr. Fauci says NFL season is feasible” in the L.A. Times
- “Twitter Will Allow Employees To Work At Home Forever” in BuzzFeed
- “Uber Technologies Makes Takeover Approach to Grubhub” in The Wall Street Journal
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