I was at the recording of this, and quite awestruck by Stephanie's skill as a communicator.
When governments say they can't afford to fix climate change or lift kids out of poverty are they speaking the truth? American economist Stephanie Kelton challenges economic orthodoxy in her book The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy. She joins Natasha Mitchell in conversation.
MMT had been making inroads before the pandemic in terms of the number of lawmakers who were starting to ask whether they had gotten some big things wrong over the years. I was in meetings in Washington, DC, in February of 2020 with very high-level members of both the House and the Senate. This was leading up to the November 2020 election. So I’m sitting there, and they’re talking about the Trump administration’s massive tax cuts, how they increase the deficit and the national debt, adding some $2 trillion to deficits with total disregard for the fiscal impacts.
This is what Republicans always do when they have power. They don’t care about debt and deficits. They focus like a laser on passing their agenda. So they got their huge tax cuts passed.
Democrats fall for this story every time. When they get into power, they try to tighten the purse strings and say, “We’re going to be good stewards of ‘taxpayer money’ and try to avoid running deficits” and all that. Meanwhile, the Republicans never do that. They just use the deficit to pass their agenda.
Democrats had me come in and they said, “Listen, we think we’ve been misled about the risks of deficits. We don’t think that these things are the bogeyman that we’ve long been told, that it’s the road to ruin.” MMT had caused them to rethink these things.
A job guarantee would go a long way toward helping people afford housing by locating living wage jobs in communities with cheaper housing. However, for the Job Guarantee to deliver the stability and prosperity we hope to see in a people’s economy, it should be paired with a guarantee of homes to everyone. Without a Homes Guarantee, real estate developers, mortgage brokers, and landlords will do everything in their power to capture the increased Job Guarantee earnings. Speculators who treat housing as an investment vehicle leave properties vacant to manipulate prices, systematically pushing people into homelessness. Lacking an alternative due to chronically underfunded public housing and a federal government legally barred from building new housing, many people have no choice but to rely on the private sector. Because the private sector has near total control over the housing stock, and housing is so fundamental to life, it is easy for speculators to bully people into paying more and more of their income. If we want our people’s economy to include quality, stable, community-controlled housing for all, we need the Homes Guarantee to provide an alternative to the speculative housing system.