(i) Orain dela urtebete bat
Warren B. Mosler #MMT@wbmosler
One year anniversary next week: https://hern.house.gov/news/documents
(ii) Ia oraintxe
@tobararbulu # mmt@tobararbulu
Watching Representative John Yarmuth on President Biden’s Fiscal Year 2022 Budget Request
Representative John Yarmuth on President Biden’s Fiscal Year 2022 Budget Request
House Budget Committee@HouseBudgetDems
As Chair @RepJohnYarmuth said on @cspanwj earlier today, for too long, self-inflicted austerity has been mistaken for fiscal responsibility–to the detriment of America’s families & our economy. @HouseDemocrats are ready to change course.
Chair Yarmuth Joins CSPAN to Discuss the President’s Budget
Chair Yarmuth joins CSPAN to discuss President Biden’s FY22 budget proposal.
(a) Warren Mosler: Warren Mosler: interes tasak eta inflazioa
00:20:59.130] – Reporter
Back with us this morning is the chair of the House Budget Committee, Congressman John Yarmuth, Democrat of Kentucky. Congressman, as you know, the president unveiled a $6 trillion budget request for fiscal year 2022. Chairman Yarmuth, how can we spend $6 trillion and all the other money that President Biden wants to spend? How can we afford it?
[00:21:22.980] – John Yarmuth
We can afford it because we determine how much money is in the system at the federal level. The federal government is not like any other user of currency, not like any household, any business, any state or local government. We issue our own currency and we can spend enough to meet the needs of the American people.
The only constraint being that we do have to worry about inflation from that spending. Now, so many people say, well, we’ve got so much debt and our grandchildren, it’s going to be on their backs and so forth. That’s not the way it works. And I think the American people need an education about how the monetary system does work.
I remember going back when Paul Ryan was chair of the Budget Committee and even before that and all of these forecasts of gloom and doom about, “Oh, we’re going to accumulate so much debt and interest rates are going to crowd out all other spending.” Well, we basically doubled the national debt from the recession in 2009 until last year before the pandemic.
And none of the things that people warned what happened, happened. We didn’t have inflation. We had record low interest rates rather than higher interest rates. And the dollar was trading within normal levels vis a vis other currencies. So I think a lot of economists now have begun to say, “Wait a minute. Maybe we’ve been thinking about debt in entirely the wrong way.”
And even the Fed chair, Jay Powell, has basically said we have the fiscal space to do what we need to do right now to make the investments we need to make to build the kind of economy for the future that we all hope we’ll have.
[00:22:56.730] – Reporter
Well, why are people wrong about this? And how should we be thinking about debt and deficits?
[00:23:02.670] – John Yarmuth
Well, I don’t get any royalties from this, but I would flag a book called “The Deficit Myth” by Stephanie Kelton, an economist and professor. And it’s become quite a bestseller, actually. And what she says is that if you look at the total national debt, $28 trillion right now, what we think of as the national debt, she said, “Don’t think of it as debt. Think of it as all the money that the federal government has invested in the country over our history, minus taxes.”
And that’s really what it is. I mean, those $28 trillion didn’t exist before the federal government issued them. So the federal government has the ability to create money, create financing, and that’s what we’ve been doing, will continue to do. The thing that I am so impressed about from the Biden administration is that they’re reversing decades and decades of our asking questions in the wrong order.
Historically, what we’ve always done is said, “What can we afford to do?” And that’s not the right question. The right question is what do the American people need us to do? And that question becomes the first question. Once you’ve answered that, then you say, “How do you resource that need?” And that’s not just money, that’s also capacity.
So, for instance, there’s a $225 billion investment in child care in the American Families Plan, but you can’t just say we’re going to give $225 billion to people to pay for their child care because there’s not enough capacity. So what you do is you’d make a false promise to the people and then you would drive the price of existing childcare even higher.
So what you have to do is spend part of that money on building capacity so that there’s enough child care to actually service the people who need it. So, again, they’re just very different ways of thinking about money. And I understand why most people don’t understand this concept because they think of it in their own framework, which is their household, which is you can’t borrow so much money that you can’t pay back. But that’s not the position that the federal government’s in.
[00:25:02.010] – Reporter
Congressman, are you saying we can just print more money and there’s no consequences?
[00:25:06.600] – John Yarmuth
There could be consequences if there is too much inflation. So let me give you a hypothetical. We could say that we’re going to give every American family a $200,000 voucher to buy a house. We could create the money to do that. But what would happen? Well, there’s not enough housing. So the prices of existing houses would go through the roof, no pun intended.
And again, you’d be creating a false promise. But meanwhile, you drive up the housing market to unsustainable levels. So there is a limit as to how much money we can inject into the economy. The thing about the rescue plan, and here’s where I think Kevin Hearn makes a mistake, is he said $6 trillion, American Families Plan and job plan.
It’s not quite that much, but that’s over eight to10 years. So the $6 trillion budget that the president proposed actually would have been $5.7 trillion if you had had no American Jobs Plan or American Rescue Plan, because only $300 billion of that is in fiscal year 2022.
So, again, you’ve got to realize these are numbers that are very large, of course, but they’re spread out over a number of years. And that’s why I think the Fed chair and others have said we have the fiscal space to do this because injecting this over a period of time will not cause the kind of inflation that is dangerous.
(b) Randall Wray: Randall Wray, elkarrizketa (2021.07.10)
[00:11:35.150] – Wray
Yeah, in fall 2019, Yarmuth invited me to the Budget Committee and I gave a talk and I talked to him beforehand. I talked to his staff on the phone so that they could tell me what they wanted me to do there. And I was surprised because I thought I should put together a presentation that would just focus on the data and show that all the fears about deficits have never come true.
So demonstrate the whole Orthodox thinking about deficits and debt is just completely wrong. And so I sent them a bunch of slides and they said, “Yeah, this is good, but we really want you to talk about MMT. This is what Yarmuth wants. And he said that we’re all talking about this and the Democratic side is pretty much on board, they really do want to hear the explanation.”
And I got a bit of a warning just before I went to Washington that a right-wing think tank had prepared the talking points for the Republicans. And so if anyone’s watched that video, you’ll see they’re like zombies. They’ve been programmed to just repeat those talking points. That’s all they did.
The Democratic side, so I was assured that they were on board. And I think that Yarmuth’s interview recently demonstrates just how onboard they are. This is not just him. I know he was only speaking for himself, but I think that the others on the Budget Committee, the other Democrats, share many of those same views. So the tide has turned.
[00:13:27.900] – Grumbine
That’s huge. That’s huge.
[00:13:31.110] – Wray
They’re still, of course, are politics. There’s still is hesitation about what can be said in public because you’ve got to run again and whatever you say will be used against you by the Republicans using the usual scare tactics. So I’m not saying it was going to come out and be as forthright as him. People in safe districts, I guess, could do that.
But, you know, they’ve got to be careful about what they say and how they vote and so on. I understand all that. But just as far as the message getting through, it has gotten through. And I think that also explains why we were able to have $5 trillion1 through in various relief packages. Some people call it stimulus, but there was no stimulus.
It was really without talking about pay fors. But as we see, pay for is being used by both sides actually in the next four trillion. So, the ideas are there, the politics are still difficult. We’re not home free…
DTM ofizialki onartua AEB-ko Kongresuan via John Yarmuth (eta Randall Wray gehi Stepanie Kelton-en liburua: The Defizit Myth)
1 Amerikar trilioi bat = europar bilioi bat.