The question that spells an end to so many policy proposals is “how will we pay for it?” But the support for the massive coronavirus stimulus—and its success in forestalling the worst possible outcome of broad shutdowns—could cause more politicians to look at a different theory of spending: Modern Monetary Theory, once an obscure branch of economic thinking that’s been gaining mainstream attention. It asserts that (at the federal level, at least) we don’t need to ask how to pay for things: The money has always been there for the spending, and always will be.

There are some constraints that should curb government spending, the unfounded fear of a deficit—that the government should be run like a business—should not be one.

According to modern theory MMT relies on the basic fact that the U.S. government is a currency issuer: It has its own sovereign currency, the U.S. dollar, just like Japan has the yen, and U.K. has the sterling.

While those entities can easily run out of money and so must strive to stay in the black, the government can afford to be in the red. In fact, MMT posits that it should be in the red: federal deficits can be good and necessary for the economy. That’s because the government’s deficit is the people’s surplus. “A government surplus works like a vacuum,” Kelton says. “It sucks dollars out of the economy. And a deficit works like a blower—it blows dollars onto the balance sheet, injecting dollars.”

The question that spells an end to so many policy proposals is “how will we pay for it?” But the support for the massive coronavirus stimulus—and its success in forestalling the worst possible outcome of broad shutdowns—could cause more politicians to look at a different theory of spending: Modern Monetary Theory

Once an obscure branch of economic thinking that’s been gaining mainstream attention. It asserts that (at the federal level, at least) we don’t need to ask how to pay for things: The money has always been there for the spending, and always will be.

As one of the current champions of MMT, Stephanie Kelton, a professor of economics at Stony Brook University, former chief economist for the Democrats on the U.S. Senate Budget Committee, and economic advisor for Bernie Sanders in 2016

The book was supposed to come out earlier, but Kelton broke her wrist during the writing process. The resulting publication delay turned out to be serendipitous. Now, the need for spending is more potent, as the U.S. officially entered a recession on June 8, and is headed for a $4 trillion deficit by the end of the year.

MMT relies on the basic fact that the U.S. government is a currency issuer: It has its own sovereign currency, the U.S. dollar, just like Japan has the yen, and U.K. has the pound sterling.

She disputes that the government surplus during the Clinton years—acclaimed at the time—was actually beneficial to country. At the time, the administration imposed a large tax increase on wealthier individuals, a payroll tax increase intended to fund Social Security, and some spending restraints

The prevailing system allows monetary policy, set by the Federal Reserve, to steer the economy when it gets too hot or cool by modifying the money supply, and manually tweaking interest rates to encourage or discourage borrowing and spending.

Stephanie Kelton’s new book, ‘The Deficit Myth,’ argues that the path to shared prosperity and achieving progressive goals means no longer asking how we will pay for things, and instead just creating the money to make them happen.

As one of the current champions of MMT, Stephanie Kelton, a professor of economics at Stony Brook University, former chief economist for the Democrats on the U.S. Senate Budget Committee, and economic advisor for Bernie Sanders in 2016, has taken on the daunting task of persuading Americans to think differently about how the government spends money.

While MMT may still be on the outer edges of the mainstream, Congress has used the MMT lens to pass legislation time and time again, perhaps inadvertently or for political expediency. Congress annually spends $700 billion on defense “because they feel generous.

MMT is something of a misnomer. Far from being “modern,” it draws heavily on monetary theories developed in the 1930s by John Maynard Keynes, and since that time, by left Keynesian economists rejecting orthodox finance and the view that government budgets should (almost) always be balanced

Stephanie Kelton’s new book, ‘The Deficit Myth,’ argues that the path to shared prosperity and achieving progressive goals means no longer asking how we will pay for things, and instead just creating the money to make them happen.

The national debt of the United States is the total debt, or unpaid borrowed funds, carried by the federal government of the United States, which is measured as the face value of the currently outstanding Treasury securities that have been issued by the Treasury and other federal government agencies

In this coronavirus pandemic,world get a great impact of economic and the Congress passed to point $2.2 trillion stimulus package but the question arises that how will be pay for it?

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