By Stephanie Kelton
The US is broke. Government deficits are de facto evidence of a government gone wild. We’re careening toward Greece. Entitlements are the root cause of our fiscal woes, and the Chinese are coming for our grandchildren. How many Americans believe this garbage? My guess? Most of them.
Pete Peterson has won and the American people have lost. There is no effective counter narrative, not even from the left. Nearly all “progressives” have accepted the fundamental premise that the federal government is like a great big household. That it faces the same kinds of constraints that you and I face. That it should spend only what it takes in and that deficits are morally and/or fiscally irresponsible. President Obama told the nation, “We’re out of money.” All of this is utter nonsense, as readers of this blog know, and it leave progressives in the weak position of pointing at the 1% and yelling, “Get ‘em! They’ve got all the money!” Want to care for seniors? Tax the 1%. Want safe roads, good schools, investment in alternative energy? Tax the 1%. The problem, of course, is that the 1% tend to fight back …. and win!
The truth is, we’re not broke. The US dollar comes from the US government (not from China, as we’re led to believe). The US government is not revenue constrained. It is the Issuer of the currency, not the User of the currency like you and I. It plays by a completely different set of rules, yet it behaves as if it is still bound by the shackles of a gold standard. It behaves irresponsibly when it proposes policies to reduce the deficit when unemployment is high and inflation is low. We’re letting millions of Americans suffer because Pete Peterson and his ilk have convinced virtually everyone that we face a fiscal crisis in this country. We live in fear of the Chinese, the Ratings Agencies, the Bond Vigilantes, Indentured Grandchildren, and so on. And this fear is used by politicians on both sides of the political aisle to sell “sacrifice” to the rest of us. And we keep buying.
And here’s the really sad part. It will never be enough.
The most empowering thing we can do for ordinary Americans is to provide them with a counter narrative that undermines, fundamentally, the government-as-a-household malarky. And we better do it quick, because America’s CEOs are already building their case against us.