In her op-ed at Bloomberg economist Stephanie Kelton lost me at this paragraph:
Option B is your standard Robin Hood redistribution. Money is taxed away from those at the top, and money is invested in programs to lift everyone else (shown in blue). Again, the distance (or degree of disparity) between the top and the bottom is the same as under Option A, but this time the top lost and the bottom gained.
Name one federal program that does that. Overwhelmingly, federal government programs do one of two things
- They notionally at least help everyone. That’s the case with military spending, Department of Agriculture food inspections, the judiciary, and so on.
- People who already have income in the top 10% of income earners are paid to do things on behalf of “the bottom”. Whether the things they’re paid to do actually “lift” anyone is hard to say. At the very least it’s disputed.
If you’re going to just extend credit indefinitely, why not actually “lift” those at “the bottom” with direct cash grants? If you argue to do anything else, you’ve stopped being an economist and started being a politician. Or a commissar.
I think we could point to a couple of programs that do a lot of good. The public health response to Ebola was incredibly good. We would not have had anything like it with a private system. We could have had thousands die. The whole vaccination program profoundly benefits everyone. It was public health the largely carried out the research and then the comparing against tobacco. Many lives saved.
” direct cash grants? If you argue to do anything else, you’ve stopped being an economist and started being a politician.”
You would still be a politician if you went the grants route. A lot of people think they money would be better spent that way, but no one has ever done the tin our country on a large scale. We dont really know what would happen. It would take a gifted politician to convince some political groups that the poor wouldn’t use that money to buy drugs and luxury foods like lobsters. (If you read Drudge you know that there are recurrent articles about poor people misusing their food stamps, which are basically a cash grant with a few restrictions.)
Steve