The COVID-19 pandemic has claimed 165,000 Americans’ lives and the death rate is rising. It is America’s greatest challenge since World War II. The big question of our time is: Will the federal government provide the leadership, commitment, and funding required to conquer the pandemic and provide for the future health and prosperity of all people?
Some worry about spending money the government does not have, thus increasing the national debt. Others claim the federal government should not worry about the debt; it must provide the funding needed to address the pandemic, climate change, and infrastructure crises similar to the way we mobilized to meet the demands of WWII.
The recent New York Times best seller, “The Deficit Myth” by economics professor Stephanie Kelton supports massive federal deficit spending. Indeed, modern monetary theory, as explained by Kelton, was at play when President Roosevelt responded with unprecedented federal spending, first to recover from the Great Depression in 1933 and then to mobilize for WWII less than a decade later.
Striking similarities define the two periods separated by almost a century. First a depression threatening the lives and livelihoods of Americans and the depression was followed by a massive federal jobs effort to build our country’s infrastructure and fight a world war.
Why is our government so hesitant to step up to the funding required to finish our fight against the COVID-19 pandemic? Why doesn’t our government invest in addressing solutions to climate change that would create new good jobs, and especially at a time when unemployment is so high?
By the 1970's Milton Friedman and the Chicago school of economics raised the fear of inflation that ushered in President Reagan’s "Trickle Down" theory.
Reagan claimed private enterprise was more efficient than the government. Therefore, he reasoned that government should just stop spending into the economy, get out of the way, and cut taxes on the wealthy. According to his plan, the private sector would provide the money to do the investing needed to create jobs. He claimed the wealthy would do a better job of investing than the government.
Forty years of federal government austerity policy practices has led directly to wealth inequality that is larger than the Gilded Age of the 1920s that led to the Great Depression.
With strong leaders with a bold vision for America, we recovered from the Great Depression, won WWII, built a great national highway system, and sent a man to the moon. America was the envy of the world. We sat at the top of the world’s technological and manufacturing powers.
Can America remember how to fight a war and win it? Professor Stephanie Kelton describes how our once great country did it. We can do it again, if voters elect public leaders who will accept the challenge to again do big things.
Only our lack of resources and political will limit us. The US government does not lack money. The federal government can legislate all the money it needs to mobilize the nation’s resources to meet its objectives. It does not need to tax more in order to spend more.
The national debt is nothing to fear. It is only an accounting record of private sector surplus resulting from deficit spending by the federal government. It is not a debt to be paid off by our progeny. As mandated by the Constitution, the U.S. government is the source of all U.S. dollars in circulation. Voters must understand that U.S. dollars spent by the federal government is public money that fuels our economy and creates jobs; it is not taxpayer money.
America must live up to its means, not within its means like a household.
It is up to the citizens to become educated, learn about candidates’ values and agendas, and make sure that they register and cast their ballots. True patriots vote and this is the most important election of our time.
Duane Catlett of Bozeman and Daniel Metzger of North Carolina are retired PhD scientists and former technical managers at a premier national laboratory. They share an interest in modern monetary theory and have collaborated to write about its application to public policy.
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