Buried deep inside the most recent major Pew Research poll that showed we were winning the political shutdown messaging fight, there was a sinister reminder just how lost the cause of progressive economic policies has become. The result is no surprise to this observer or anybody that understands Modern Monetary Theory and therefore the operational reality of our modern monetary system. Here is the relevant part:
When it comes to the key issue of dealing with the economy, slightly more say the Republican Party (44%) than the Democratic Party (37%) could do the better job. Independents favor the GOP on the economy by a 46%-30% margin.
How is this result possible? In what world can Republicans be seen to manage the economy better than Democrats by a majority of the populace, given that the Great Recession started under President Bush? I mean come on, its not like this happened generations ago, it was only 5 F-ING YEARS!!! I can think of only one possible answer, and it lies in a previous Gallup poll. I've picked this specific poll not because its an outlier but because its the first entry when I googled "polls on US deficit". Almost all of the other entries confirm this result but its unnecessary to post every single one here. If you don't believe me, look it up yourself to see the truth.
Regardless of the historical fact that every Democratic President since JFK has presided over a shrinking annual average deficit during their time in office, and every Republican President (except for Nixon) has presided over annual average increases in the deficit, the American public still thinks of Republicans as deficit cutters and Democrats as tax and spenders.
http://home.adelphi.edu/... (Table 3)
This is wholly due to the Republican messaging machine constantly railing against the evil of deficits. And because Democrats have continued to agree with Republicans publicly that the Federal Govt’s budget is the same as a household budget, why shouldn't the public at large believe deficits are bad and dangerous? If you think deficits are bad, and one party makes cutting the deficit its primary publicly stated goal (especially during Democratic times of Gov. control), then it’s perfectly rational for the public to view Republicans as more responsible on the subject. Here is Harry Reid on the matter back in 2006. Where is the intellectual consistency? Of course there can't be any when you are spreading a complete and total lie, this particular myth just happens to be the most dangerous fantasy facing not only our society but really the entire world today.
And no that’s not just hyperbole.
If you worry about climate change, what has been the single biggest impediment to massively expanding solar and wind power generation? The meaningless question of "how are we going to pay for it?" Democrats only want to raise taxes to pay for spending like this, and Republicans will never raise taxes to do so, therefore we have a complete impasse. And all the while, millions of metric tons of carbon are spewed into the air every day while the nation is paralyzed by a question that is completely inapplicable. Which is "where are we going to get the money to pay for it all?" From the same place all fiat money comes from people, OUT OF THIN AIR!!! The US Dollar does not exist in nature, Congress invented it by passing laws, its not a commodity, its data entry! (tiny rant over)
“If my Republican friends believe that increasing our debt by almost $800 billion today and more than $3 trillion over the last five years is the right thing to do, they should be upfront about it. They should explain why they think more debt is good for the economy.
“How can the Republican majority in this Congress explain to their constituents that trillions of dollars in new debt is good for our economy? How can they explain that they think it’s fair to force our children, our grandchildren, our great grandchildren to finance this debt through higher taxes. That’s what it will have to be. Why is it right to increase our nation’s dependence on foreign creditors?
“They should explain this. Maybe they can convince the public they’re right. I doubt it. Because most Americans know that increasing debt is the last thing we should be doing. After all, I repeat, the Baby Boomers are about to retire. Under the circumstances, any credible economist would tell you we should be reducing debt, not increasing it. Democrats won’t be making argument to support this legalization, which will weaken our country. "Weaken our county.”
This is why MMT is the only hope for progressive economics long term. Once people understand the nature of our monetary system, they begin to realize that not only are deficits good, they are absolutely necessary to the growth and stability of the nation. There are only two ways to grow the supply of money that is necessary to keep up with productivity and population growth, one is with private debt; where banks create deposits (money) in exchange for a promissory debt note or the Gov. deficit (no corresponding private liability). Which is simply defined as the amount of money the Gov. adds to the economy through spending MINUS the amount of money the Gov. withdraws from the economy through taxation.
The best example of this can be seen in the historical record.
The US Gov. has undergone 7 periods of extended budget surpluses (decreasing the money supply) since the beginning of our nation, and it’s no surprise that all 7 of these events were followed by depressions (The Great Recession has not become a depression solely because of the size of deficit since 2009, $6 trillion in new money given to the private economy in 5 years will definitely keep the bottom from falling out).
Again, regardless of the history and the facts, if Democrats admit that the Gov. can run out of money (a totally silly notion) and that deficits are bad (but sometimes necessary), then we have no moral or intellectual authority to beat the party that makes the deficit being bad its primary public policy stance. And sadly, the public agrees with the "deficit is bad" paradigm. It’s only through the insights of MMT that we can ultimately win the economic battle of the hearts and minds in the broader American public and finally re-implement progressive economic policies.
MMT = Reality