Connecting Modern Economics with Progressive Politics

Connecting Modern Economics with Progressive Politics

As Los Alamos scientists and engineers working on nuclear weapons, our sole interest was accurately defining the problems and researching, developing, and implementing workable solutions.  Our jobs involved objective assessment of situations, separating the wheat from the chaff, and bringing people together with the right skills to fix problems.   Politics never entered the problem solving processes.

In retirement, several longtime Los Alamos colleagues and friends concerned over the political “wars” in Washington preventing us from addressing Climate Change began discussing how we might contribute to a solution to get our country moving in a positive direction.  We believed we had the right credentials and technical knowledge to address the issue and wanted to find some way to influence our elected officials.  Needless to say, we have not been successful!

Along this path, Dan started digging into economics to see if there was an economic component to the climate change issue that could make the argument for addressing carbon emissions more compelling to our Congressional decision makers.  In the process he found that economic issues were the most important consideration in almost every issue our country faces. 

Dan discovered a group of academics advocating an approach to Macroeconomics called Modern Money Theory (MMT) that is more an explanation of the way a sovereign’s fiat currency works , if unencumbered by needless restrictive legislation, than it is a theory.   

Needless imposed legislative constraints, like the “debt ceiling“ and the obsessive fear over an expanding “national debt,” are causing law makers to make unnecessary and destructive budget cuts that are killing jobs, hurting our economy, and preventing our government from investing in almost every phase of our national public service needs, including now urgent climate change issues.

Unfortunately, both Republicans and Democrats have fallen into the trap of believing economic myths driving our governments decision making in the wrong direction: “our federal government’s finances are no different than a household’s finances, it is going broke, it needs to increase tax revenue or borrow money from China to support our national debt, and it must make major cuts to our safety net programs to survive. “  

All of those often repeated statements are wrong, yet they are so firmly entrenched in our current culture that peoples’ eyes glaze over when they hear anything that conflicts with these myths.

Most people do not understand macroeconomics on any level, but conservatives purposely trumpet these myths to achieve their ideological small government, privatization agenda.  Claiming our government is running out of money is literally the only way to get citizen voters to accept cuts to our social safety net programs as necessary to prevent our country from going bankrupt.

Our challenge is to find better ways to communicate to all citizens, public policy makers, and advocates of progressive policies the message of how money and our banking system really work and the key role the federal government plays in sustaining full employment for all those wanting work.

 

Arguments for saving Social Security, Medicare, and Medicaid from destruction and making the necessary investments to improve our “public common good” would be enormously strengthened by an understanding and integration of MMT principles into our discussion of all the critical issues of our time.

My hope is that others will join us in this quest!