Discover and read the best of Twitter Threads about #paygo

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Somehow, @paulkrugman got the impression that “MMT” says we can get to M4A without the need for any offsets. My impression is that he‘s actually arguing with non-economists who say things online.
I recently had an opportunity to explain my own thinking on this very question with @ezraklein and @jasonfurman. Jason shares Krugman’s opinion that you need enough new revenue to fully offset any new spending with M4A. #PAYGO
I responded that no one had done the hard work to try to arrive at the right answer but that I suspect it is not 1-1. Bottom line is that MMT *economists* have approached this question from a serious place, and it is simply wrong to claim MMT says, “Print Your Healthcare.”
Read 6 tweets
Sort of. A lot of Ds are intellectually lazy and do not understand #PAYGO and do not want to. They are mad anyone would dare distrust the fancy folk to whom have outsourced their brain. The danger of @AOC isn't the theatricality, it's that she can think.
So much of the 'we must get along' and process-talk and calls for unity are just about laziness. Writing law is hard! It requires boring detailed work fighting with fancy people who sneer at you. It's much easier to pretend to wonk out than to actually do it.
I noticed this during @AOC's campaign when she made detailed critiques of the #PROMESA bill Obama and Congress passed to hand Puerto Rico over to hedge funds. Lots of progressives supported the bill because they didn't understand it. It was clear she had paid close attention.
Read 4 tweets
1. Ok, a quick thread on what I think was a very significant ideological fight that happened last week. The dispute was over something known as #PayGo and while it appeared to concern boring government budgeting questions, it is actually about the nature of money and democracy.
2. Money is a very weird thing. It is at heart a commodity that a group agrees is a medium of exchange. What gives money value is both a collective belief it does, and an enforcement trigger, ie taxing authority. Dollars have value bc the U.S. gov't collects taxes in dollars.
3. The value of money is essentially the amount of money in circulation versus how much stuff the economy produces. If you have a bigger economy you need more money to match that increased trade. Money is permission to use resources, the more resources the more money you need.
Read 23 tweets
#PAYGO threatens our ability to enact the kind of transformative change we need at this moment in history. Truly undoing its corrosive impact on our democracy requires a change in law, which is why the first bill i'm cosponsoring is for a full repeal of the #PAYGO statute.
The pressure all of you mounted on #PAYGO helped create the space for progressives to win important concessions:
-A hearing for Medicare for All
-Repeal of a rule requiring a supermajority for tax increases
-40% of every committee will be progressive caucus members
For now, Leadership has pledged not to use #PAYGO to obstruct progressive bills, and I know all of you will join me in holding them to that promise.

When I asked you all to join me as I enter the halls of power I meant it, and I thank you for raising your voice on this issue.
Read 3 tweets
#PayGo in simple terms:
Means the government must demonstrate that it will *subtract* a 💵 from the economy for every 💵 it intends to *add*.
Why on 🌎 would we want a rule to prohibit *net* 💵 contributions to the economy?
Without #PAYGO, Congress is free to put more 💵 into the economy than it subtracts away. That money could rebuild infrastructure, fund cancer research, etc. We call it “deficit spending,” which is unfortunate. B/c it all becomes part of the financial surplus *outside* government.
The relevant questions are: (1) Why is that 💵 being spent—i.e. does the spending improve the human condition? & (2) Who ends up with the 💵 surplus—i.e. are you exacerbating or reversing inequality? All deficits improve *someone’s* balance sheet. Ask why and for whom.
Read 3 tweets
I want you to know something terrifying...
Only @RoKhanna and @Ocasio2018 even voiced opposition to #PayGo from the Democratic Party.

Rank and file Democrats on Facebook ignored Dr @StephanieKelton regarding this matter.
Rank and file Democrats give Republicans all the ammo they need pretending the nation is constrained by taxation for spending.

Rank and file Democrats have accepted austerity is the "right thing to do". To be "fiscally responsible" and "clean up the Republicans budget mess".
Rank and file Democrats do not realize our nation creates dollars when it spends and destroys dollars when it taxes.

Rank & file Democrats end up supporting #GreenNewDeal killing economics of austerity then do the Republicans job for them by asking "How are you gonna pay for it"
Read 8 tweets
1. I'm sorry... but we are at a critical point where we can no longer tolerate folks willfully ignoring the economics any longer. Stakes are just too damn high.
This Green New Deal we all want? It is LITERALLY only possible with MMT. Period. #PAYGO is a self inflicted gun shot
2. wound to our goals of a Green New Deal. "A new vanguard of economists in Washington, including former Bernie Sanders staffer Stephanie Kelton, has argued that under modern monetary theory, public spending is only constrained when the economy is running at full capacity
Read 7 tweets

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