The point is, not every deficit serves the broader public good. Deficits can be used for good or evil. They can enrich a small segment of the population, lifting the yachts of the rich and powerful to new heights, while leaving millions behind. They can fund unjust wars that destabilize the world and cost millions their lives. Or they can be used to sustain life and build a more just economy that works for the many and not just the few.

Stephanie Kelton

I think it’s safe to say that there is currently no common understanding of just what in the actual f*#! is happening with our “economy.” Consider these disparate trends or snapshots of what’s going on right now:

• The US economy is growing, and official unemployment is still low — so that’s good
• But inflation and interest rates are still too high — so that sucks
• The stock market is still in the stratosphere — so that’s awesome
• But most of that value is currently driven by AI and data center building, which could be a monstrous bubble — so that’s uncomfortable (oh, and the richest 10% own about 90% of stock market wealth, but that’s another story)
• And speaking of AI: it’s on the cusp of wiping out millions of jobs — so that’s scary
• Or maybe not: AI still sucks for the important stuff, so our jobs are still safe, and/or we’ll just get the great new “jobs of the future” as shepherds of all the great new tech — so that’s hopeful
• Crypto is a liberating force, ready to break the power of the establishment
• Or… it’s a scam that will probably bankrupt your weird uncle and a lot of other people left standing when the music stops
• Social Security is in crisis, running out of cash, so we’re all fucked in a few years, especially since few elderly people have enough money saved separately for retirement
• Companies whine that they can’t find good candidates to fill the huge number of open positions…
• And yet, all of us probably have friends or family members who have been out of work forever, and can’t even get responses back to the eight million resumes they’ve sent out (AI-assisted resumes that are screened by AI-hiring software)
• Democrats have abandoned the “working class, which accounts for their recent dismal showings in national elections
• But the Trumpian GOP also generally stiffs that same class, giving them rage and vitriol for subsistence while the government is used as a piggy bank to build golden ballrooms and hand out kleptocratic contracts like candy
• “America is the hottest country [sic] in the world,” with trillions in investment loot coming in from overseas, which will then tinkle — sorry, trickle down to the masses
• Except all the while, two thirds of American households live paycheck to paycheck, have little to no savings, and live in perpetual fear that they are just one illness, injury, or layoff away from financial disaster
• Tens of millions of people can’t afford to buy a home or rent an apartment in a desirable area, but the market and/or the government don’t seem to be able to respond to this massive demand-pool for affordable housing

You get the idea. One of the side effects of our information-saturation age is that there is not even consensus on whether we’re doing well or getting clobbered. Your tribe will tell you how things are, and if your actual, physical life doesn’t line up with that, then that’s on you. Suck it up and do better. Get with the program.

The issue here, regarding economic reality, is that the Polarization Industrial Complex has taken over people’s perceptions of how we’re actually faring, forcing us into the same dualistic, antagonistic framework that has us hating our fellow citizens for their skin color, genital predilections, and religious affiliation. If your team’s in charge, then full employment and stock market gains are awesome. But if your guys are not in power, then those same stats are misleading at best, and probably just fake anyway.

How can we find a reliable economic barometer to tell us how we’re actually doing, something that is true, beyond just blaming poor people for being lazy and demonizing or lionizing the plutocrats, depending on what your side tells you to do?

This is where the clarity of Modern Money Theory can cut through all the bullshit, not with some complicated model of economic equilibrium or disequilibrium, or with a lot of free-market mumbo jumbo, but rather with a laser-focused take on what we could and should be doing to help people directly and quickly, using the fiat currency power of the federal government to blast away the obfuscation and moral dishonesty that undergirds the plutocracy.

So what am I talking about? Well, let’s look at the basics of MMT, as I interpret it. I am obviously not a professional economist, and my take is not in full agreement with all of the professional advocates of MMT. It’s more of a layman’s philosophical extension of MMT into other areas that I think are crucial to address.

To start, let’s recap the pillars of plutocracy:

• The tools of control and power are at historic heights. The technologies of money and information, which are entwined, have facilitated the largest concentration of wealth and income that the world has ever seen. Our lovely friend Elon Musk is now a trillionaire, so they say.
• Ideologically, this hyper-clustering of wealth and power is explained like this: money must be kept scarce for regular people, to compel their participation in the system, and also to avoid dying. However, money must be kept plentiful and easy-access for those that already have it, as they are the creators of value who drive the system.
• Morally, this is justified by a zombie way of thinking that we all (should) know by now is bullshit: that good and talented people become successful, and bad, stupid people deserve their failure. [This sounds like a crude formulation, and it is. But it’s the real, barbaric core of the plutocratic system.]
• The government is then deployed to put these horrible and destructive ideologies into place in our whole society, buttressed by the purchase of media of all types (mainstream, social, and niche), and the proliferation of think tanks and organizations of all sorts, which put spin and warped rationalizations around the whole thing.

This is the simple economic reality that overarches the cacophony of conditions that we reviews at the beginning of this piece. Plutocracy subsists by making money scarce for regular people while abundantly available for the already-rich. That’s it. Everything else that happens economically is just derivative of this fundamental, false-morality view of money. Full employment structures, business regulations, Fed monetary policy, etc. — these are all outgrowths of forcing artificial money scarcity on the masses, while heaping rewards on the already-flush. As the cruel Parable of the Talents puts it: “For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away.”

An MMT revolution in thinking about federal financing would shatter this existing ideology, with a potent combination of simultaneous action from above and below. As regular readers of this blog know, I propose a three-pronged approach to fixing things: Universal Basic Income, Bigger Home Bases, and Modern Money Theory. See some recent posts for more detail on the first two themes.

The MMT piece is really pretty simple, but is still fundamentally true and powerful:

• The federal government in a fiat currency nation like the United States, can never “go broke.” The government is not a a currency user, like an individual, household, town, or even a state.
• The federal government is the currency issuer, not a user, and can thus spend as much money as it wants into existence via keystrokes; and it can spend it on whatever it wants (which should be what we want as a society).
• The only constraints on money creation are self-imposed. Debt ceilings are arbitrary limits to government spending built on the faulty equivalence of the government to a household budget, a completely false comparison. Indeed, the whole idea of a “balanced budget” for a fiat currency nation makes no sense, as the government can use money creation power without limit.
• At the federal level, taxes are not needed to “pay for” things. At the state, county, city, and town levels, taxes do pay for things, as those entities are currency users. But at the federal level, money can be created without prior taxation. Indeed, that’s how we paid for the bank bailouts during the GFC and stimulus payments during Covid, and all modern nations run perpetual budget “deficits” for decades, because taxes don’t pay for things. So the whole “Social Security is going broke” thing is bullshit. The US government can keystroke whatever dollars it needs into existence, to pay for whatever we want it to. [Federal taxes should and do have other purposes, like driving the currency itself, discouraging damaging behavior, and a limited effect on inflation.]
• The only considerations when creating money are inflation, the international standing of the currency, and most importantly, “what are we printing the money for?”
• In reality, the language around “budget deficits” and “government debt” is completely misconstrued. All of these obligations are denominated in US dollars, and thus subject to the overriding power of fiat currency creation. Plutocrats understand this, but the austerity language of debt and deficits are used to scare politicians and the public into thinking that we need to tighten our belts and give more resources to the already-rich to “fix” a reckless system.
• This is where the ideology of money comes into play. Currently, we deploy the old morality: keep money scarce for the masses, make them work their asses off and jump through hoops for every penny of federal assistance, but shower the rich with easy cash via tax cuts, deregulation, industry subsidies, no-bid contracts, free money via bond offerings and the Fed discount window, etc.
• But a new MMT philosophy would allow a complete reversal of this ideology: make money easy to get for regular people via a Universal Basic Income, and shut down the easy money for the plutocrats. Don’t worry about “paying for” the UBI with taxes, because taxes don’t pay for things, and as Dick Cheney said, “Reagan proved that deficits don’t matter.” And the inflationary effects of a UBI would be squelched by the social pivot to Bigger Home Bases, which would sharply reduce consumption demand while also giving people much more leverage over the labor market itself.

In an economic landscape where human skill and labor are becoming less valuable, and where the cost of living is hurtling into the stratosphere due to corporate control of the entire playing field, the old ideology of money has become completely toxic and destructive. The only alternative approach that can break this system is a new paradigm: Bigger Home Bases backed by Universal Basic Income, funded through the fiat currency power of the federal government.

Money cannot be made artificially scarce for people any longer, and the false narrative of federal deficits, debt, and balanced budgets must be scrapped completely. The old ideology of money and morality masquerades as common sense and sober rationality, but it’s really just a grand scheme to protect the plutocracy and unsustainable growth in general. It is one of the many ways that we delude ourselves into believing that our current system is the only way that things can be, even if it’s on a path that leads to ecological collapse, political chaos, and social disintegration.

We can do better.