Preparation for the upcoming "Grand Bargain"
The Conservative response to this Progressive’s strategy is built completely upon a single question: How are you going to pay for it? ... This is the pivotal question where the partisan debate becomes suddenly clouded with confusion. Implicit in the Conservative’s question is the unspoken assumption that the financial resources of the sovereign government come from the Private Sector—either through taxes or borrowing. .... The confusion is created because both the Conservative and the Progressive believe this to be an absolute, uncontested truth—a veritable “law of nature.” Money for public spending comes from the Private Sector. Where else could it possibly come from?
Together, the Conservative assertions and the Progressive rejoinders, create a self-deceiving and self-defeating dialog that has devolved into nothing more than a shouting match: The building is burning, but since we have agreed we don’t have enough water to put it out, we can only argue about whether we’ll douse a little over there or a bit over here. If I say it we ought to douse here, you scream that’s not fair—we ought to be dousing over there instead. At what point in this futile effort, I am wondering, will we stop shouting at each other and realize the fundamental, almost silly, error in our thinking? Oh, look! We actually do have all the water we need to put the fire out completely. Look! Over there! You see that great big water spigot? What have we been thinking?
In other words, what if it turns out the original, pivotal assumption the Conservative assertions and Progressive rejoinders are built upon is simply untrue? What if it turns out the sovereign government doesn’t need to collect taxes, or borrow from the Private Sector, to pay the men? What if the sovereign government, all by itself, can issue the currency required to put them to work stacking stones? What then?
Well, that would be MMT. Often, however, ideas that can't be put across as statements can be rephrased as questions with a happier result, which is what this post does.
Meanwhile, the legacy parties have mutually agreed that this election is going to be about a mandate for cuts -- unemployment having been taken off the table -- and that discourse will explode a little before September 6, right after the Democratic National Convention. So get ready.