L. Randall Wray is a founding father of Modern Monetary Theory and is always a welcome guest on this podcast. This is his SIXTH episode of Macro N Cheese.
Our community recently celebrated Congressman Yarmuth’s statement in support of MMT and his shout-out to The Deficit Myth. Randy tells Steve he was invited to speak to Yarmuth and his staff in 2019. He had planned to make a presentation on the data to show deficit fears have never come true.
And so I sent them a bunch of slides and they said, "Yeah, this is good, but we really want you to talk about MMT. This is what Yarmuth wants. And he said that we're all talking about this and the Democratic side is pretty much on board, they really do want to hear the explanation."
Sounds promising, but we’re far from out of the woods. We’re facing multiple pandemics in addition to Covid - the pandemics of racism, inequality, climate catastrophe are but a few, each linked to each other. The climate crisis has caused a pandemic of fires, of heat, of oceans rising, all of which lead to a pandemic of refugees. They must be tackled simultaneously.
The private sector has proven inept at solving these problems, partly because addressing such massive issues requires a carefully coordinated and centrally planned effort. In the case of the climate, only a global effort will do. Major economic powerhouse countries like the US, China, and Russia need to take proactive roles in addressing our environmental crises, as they have the fiscal ability to mobilize resources on a mass scale, AND they’re the nations most responsible for the climate emergency.
Steve asks Randy to talk about and look at the current push for universal single payer health care in the US, and explain why a state by state approach cannot work. On the state level there are a series of interrelated problems that cannot be avoided. Certain programs - like healthcare, unemployment compensation, or a job guarantee - require open-ended spending. If someone meets the requirements, the service must be provided. During an economic downturn, a state’s tax revenue is shrinking while the demand for services is expanding. Necessary programs providing jobs and healthcare, must be federally funded; there’s no way around it.
Randy reminds us that careful analysis shows how Medicare for All is going to significantly reduce the number of resources needed to devote to health care. So it’s not just that the federal government can afford it, there’s really no credible argument against it.
The episode looks at the problems causing migration from rural areas to urban centers, while neglect of infrastructure causes flight from the cities into the suburbs. As always, Randy brings clarity to these complex questions.
Be sure to check out the Transcript and Extras pages in the Macro N Cheese section of our website.
L. Randall Wray is a Professor of Economics at Bard College and Senior Scholar at the Levy Economics