Can Uncle Sam Afford Any Amount of Spending?

Source: Heartland Institute
by Daniel Sutter

“In 2019, Congresswoman Alexandria Ocasio-Cortez introduced the Green New Deal, with a price tag estimated at trillions to possibly tens of trillions of dollars. When asked whether Washington could afford the Green New Deal, Ms. Ocasio-Cortez said Modern Monetary Theory (MMT) showed that we could. … MMT begins with the observation that, in Professor Kelton[‘s] words, ‘Uncle Sam will never go broke.’ Because of monetary sovereignty, the Federal government does not face the financial constraints of a household or business. Consequently, Kelton claims that Congress could ‘advance legislation — today — aimed at raising living standards and delivering the public investments in education, health care, and resilient infrastructure that are critical for our long-term prosperity.’ Evaluating this claim requires unpacking the three components of monetary sovereignty.” (10/12/21)