Al Jazeera America, Dr. Stephanie Kelton, Ned Resnikoff, Senator Bernie Sanders, UMKC, University of Missouri-Kansas City
LUMPENPROLETARIAT—On Senator Bernie Sanders’ collaboration on economic policy with heterodox economists from the University of Missouri-Kansas City, such as Dr. Stephanie Kelton. Dr. Kelton has been hired by Senator Bernie Sanders to be the chief economist in the Senate Minority Budget Committee. Could Bernie Sanders inject progressive spirit into the Democratic Party’s agenda? Or will Sanders find that Gresham’s Law always prevails?
Al Jazeera America’s Ned Resnikoff explores the implications of the Senate’s self-proclaimed socialist meeting the revolutionary approach to macroeconomic policy, modern money theory (MMT), which shows us how, and why, we can afford to end involuntary unemployment as we know it.
AL JAZEERA AMERICA—[19 FEB 2015] Ranking Senate Budget Committee member draws on research from heterodox economists to solve country’s financial woes
Bernie Sanders is headed to Iowa. On Thursday, the irascible Vermont senator and self-described democratic socialist will kick off three days of public speaking events in the state, joining the scores of other rumored presidential contenders who have recently descended on the crucial 2016 battleground.
Like the others, Sanders has not yet said whether he is running for president. But he has repeatedly said that he is “prepared to run,” particularly if nobody else steps up to fill a left-wing, economically egalitarian vacancy in the Democratic primary field.
In the meantime, Sanders has used his position as a ranking member on the Senate Budget Committee to expound on his own vision for a political program. Last month, he put out a report advocating for a federal budget that would help “rebuild the disappearing middle class.”
Most of the policy initiatives suggested in that report — such as raising the minimum wage and boosting infrastructure spending — have been proposed before by Sanders and members of the Democratic Party. But the report also included a novel way of thinking about the federal deficit: Although Sanders said debt reduction is a worthy goal, he put far greater emphasis on reducing what he called the “other deficits in our society,” such as unemployment and income inequality.
That shift of emphasis — from an abstract, intangible economic indicator like the federal deficit to more concrete issues such as infrastructure and household income — appears to have been influenced in part by a heterodox strain of economics known as modern money theory (MMT). That school of economics has long been ignored by denizens of Capitol Hill, but it has plenty of adherents on the progressive left who are cheering Sanders’s recent public statements.
The Vermont senator is not an MMT adherent, but one of its leading practitioners, Stephanie Kelton, is now his chief economist on the Budget Committee. That hire, and Sanders’s subsequent public statements, have drawn the approval of progressive journalists such as The Fiscal Times’ David Dayen.
“Sometimes, Washington backs into its best ideas without even knowing it,” wrote Dayen in late January. “Sanders’s MMT-tinged push for higher spending comes at precisely the right time, when politicians are looking to respond to inequality and economic despair.”
MMT economists view money as something that is spent into existence by the state. The more money the government spends, the more money the private sector accumulates. When the government taxes in order to recoup some of that money, it does so not in order to generate revenue for itself, but to limit the supply of money and give it some stable value.
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[Image of Bernie Sanders by Flickr user Donkey Hotey.]
[22 SEP 2016]
[Last modified 12:37 PDT 22 SEP 2016]