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Q: Can we afford a #GreenNewDeal?
A: Yes. The federal government can afford to buy whatever is for sale in its own currency.
A: Yes. The federal government can afford to buy whatever is for sale in its own currency.
Q: Are you saying the government can just "print the money" to pay for new spending?
A: Is there any other way?
A: Is there any other way?
Q: Is there another way? Yes, you can raise taxes!
A: That's not how it works. Taxes remove some of the money the gov spends into the economy. You could spend & tax the same amount. But the gov normally spends more than it taxes so that the economy can keep the extra dollars.
A: That's not how it works. Taxes remove some of the money the gov spends into the economy. You could spend & tax the same amount. But the gov normally spends more than it taxes so that the economy can keep the extra dollars.
Q: But that's deficit spending, so now you have add to the national debt.
A: Except the $ to buy the bonds comes from the deficit spending! It's not "borrowing" in any meaningful sense of the word. When people swap $$ for bonds, they're just holding another kind of gov money.
A: Except the $ to buy the bonds comes from the deficit spending! It's not "borrowing" in any meaningful sense of the word. When people swap $$ for bonds, they're just holding another kind of gov money.
Q: But don't we eventually have to pay back the debt?
A: The government retires bonds all the time. It's simple. You just debit (-) the seller's securities' account and credit (+) a reserve account. It's all done using a keyboard at the NY Fed.
A: The government retires bonds all the time. It's simple. You just debit (-) the seller's securities' account and credit (+) a reserve account. It's all done using a keyboard at the NY Fed.
Q: But what about the interest payments? There will be less money available for everything else.
A: Wrong. The gov makes interest payments the same way it makes all payments. It can always spend more on other things. Inflation is the limit.
A: Wrong. The gov makes interest payments the same way it makes all payments. It can always spend more on other things. Inflation is the limit.
Q: So interest on the debt can never be a problem?
A: All spending carries inflation risk when the economy gets to full capacity. If people are receiving/spending too much interest income, the Fed can cut rates. Or Congress can cut spending or raise taxes.
A: All spending carries inflation risk when the economy gets to full capacity. If people are receiving/spending too much interest income, the Fed can cut rates. Or Congress can cut spending or raise taxes.
Q: Are you saying we can have a #GreenNewDeal without *any* new taxes?
A: It depends what's in the GND and whether the US economy has the extra capacity to absorb the proposed spending *at the time it occurs.*
A: It depends what's in the GND and whether the US economy has the extra capacity to absorb the proposed spending *at the time it occurs.*
Q: But we're talking about trillions of dollars over time!
A: The GOP did well over $5 trillion in tax cuts and war spending without causing inflation to accelerate. And some GND spending will increase capacity, which gives you more room to spend safely.
A: The GOP did well over $5 trillion in tax cuts and war spending without causing inflation to accelerate. And some GND spending will increase capacity, which gives you more room to spend safely.
