Understanding Government Borrowing: A Discussion with Biden's Chief Economic Advisor

Written by Mike Shedlock, via mishtalk.com

Jared Bernstein and the Modern Monetary Theory

Jared Bernstein, the head of economic advisors for President Biden, was recently asked about his thoughts on the Modern Monetary Theory (MMT). According to MMT, the government is unique in that it owes money to itself and can cancel this debt at any time. Advocates of MMT believe that a benevolent government would use this ability to spend money wisely, cancel all debt, or pay interest to itself, resulting in a utopian society where everyone lives happily ever after. It's a fascinating concept, but what was even more interesting was watching Bernstein try to respond to a question about it.

Do Governments Really Borrow Their Own Currencies?

A clip from the upcoming documentary "Finding the Money" posed this question, suggesting that the answer might not be as straightforward as one might think. The film is set to be released in theaters and on demand on May 3.

Bernstein's Views on the Dollar's Reserve-Currency Status

For those who might be surprised by Bernstein's apparent lack of understanding, it's worth noting that this is only half the story. In a 2014 op-ed for the New York Times titled “Dethrone 'King Dollar',” Bernstein argued that the government should abandon its commitment to maintaining the dollar's reserve-currency status. His views suggest that he is far from clueless about these matters.

"Finding the Money" and the Praise for Stephanie Kelton

Contrary to what some might believe, the film "Finding the Money" is not a call for fiscal conservatism. Instead, it praises Stephanie Kelton, a leading proponent of MMT, which advocates for institutionalized socialism and money printing. Kelton served as the economic advisor for socialist Bernie Sanders.

Final Thoughts

This article presents an intriguing look into the world of government borrowing and the Modern Monetary Theory. It raises important questions about the nature of government debt and the role of the dollar as a reserve currency. What are your thoughts on these issues? Do you agree with Bernstein's views or do you have a different perspective? Share this article with your friends and start a conversation. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.