Warren Mosler is running for Congress in Connecticut. Before he can be elected, however, he says we need to get a few things straight.
“I am running for U.S. Senate to see my policies implemented to create the 20 million jobs we need,” he said today. “And to do this it must be understood that there is simply no such thing as the U.S. Federal government running out of money, nor is the Federal government operationally dependent on borrowing from China or anyone else. U.S. states, individuals, and companies can indeed become insolvent, but U.S. government checks will never bounce. Yes, large Federal deficits that push the economy beyond the point of full employment can lead to inflation or currency devaluation, but not bankruptcy and not bounced checks. If lawmakers today understood this fact, they would not be looking to cut Social Security and we would not still be mired in this disastrous recession.”
Because lawmakers apparently do not understand this, Mosler, who also threw in an analogy about football (“When a touchdown is scored, the number on the scoreboard changes from 0 to 6. No one wonders where the stadium got the 6 points, no one demands that stadiums keep a reserve of points in a lockbox and no one is worried about using up all the points and thereby denying our children the chance to play.”) has said that if anyone can prove him wrong re the government not being able to run out of money, he’ll donate $100 million of his own money to “pay down the Federal deficit.” Read more »