An MMT Christmas Carol

By Dan Kervick


SCROOGE:  Cratchit!  Cratchit, come here!

CRATCHIT:  Yes Mr. Scrooge?

SCROOGE:  Cratchit, I need you to work until midnight tonight.

CRATCHIT:  Tonight, Mr. Scrooge?    On Christmas Eve?!

SCROOGE:  Yes, indeed, Cratchit.   And you must work every day until New Year’s Day.  I’m sorry about this, Cratchit, but we have very important public business to attend to.

CRATCHIT:  Our lives certainly have changed ever since you were named Lord Mayor of the City of London, Mr. Scrooge.  What is the business now?

SCROOGE:  We have to work around the clock to design an austerity plan for London that will help us avoid the Fiscal Cliff.

CRATCHIT:  Heavens, Mr. Scrooge.   That sounds terrible!   What is the Fiscal Cliff?

SCROOGE:  The Fiscal Cliff is an even bigger austerity plan that will go into effect if we don’t design and implement this smaller austerity plan.   Last year I hired the firm of Obama & Boehner to design the Fiscal Cliff and set it in motion.   The plan goes into effect automatically at the end of the year.

CRATCHIT:  What do you mean by “automatically”, Mr. Scrooge?   Can’t you just cancel it?

SCROOGE:  Of course, Cratchit!    I’m the Lord Mayor, after all.   But I told Obama & Boehner and to put the plan in motion for a reason.

CRATCHIT:  And what reason is that?

SCROOGE:  To give me political cover to introduce the smaller austerity plan this year.   We now just have to replace the Big Fiscal Cliff by the Little Fiscal Cliff.  The people of London will be so happy that we saved them from the Big Fiscal Cliff, that they won’t blame me for implementing the Little Fiscal Cliff.

CRATCHIT:  But, Mr. Scrooge, why have any Fiscal Cliff at all?

SCROOGE:  You do the books, Cratchit!   Haven’t you noticed that our monthly expenditures constantly exceed our monthly revenues?   You don’t think this can go on forever, do you?

CRATCHIT:  I suppose not, Mr. Scrooge

SCROOGE:  “Suppose not”?   Of course not, Cratchit!

CRATCHIT:  Very well, Mr. Scrooge.   I will tell my family I must stay late tonight.   Is there anything else?

SCROOGE:  Just one thing, Cratchit.  I’m sorry to say that I’m letting you go at the end of the year.

CRATCHIT:  Mr. Scrooge!   But why???

SCROOGE:  As I told you Cratchit, we have to cut back.  Your position has been eliminated as part of the Little Fiscal Cliff that will be implemented at the end of the year.

CRATCHIT:  But Mr. Scrooge, what about my son, Tiny Tim?  He needs an operation!

SCROOGE:  Tiny Tim will be fine.  He has a pre-existing condition, and you can keep your basic medical insurance coverage even on unemployment.  We’ve already taken care of that.

CRATCHIT:  Wonderful!  Grandma Cratchit will be so pleased.  She also needs an operation!

SCROOGE:  Well, she’s going to have to wait a couple of years for that one – we’re reducing her coverage as part of the Little Fiscal Cliff.

CRATCHIT:  Goodness!   It will be a difficult wait for her.  What will she do until she can get her operation?

SCROOGE:  Whatever she does, tell her to be frugal.  Her public pension from the city is being reduced too.  Perhaps she should cancel her cable, and stop having tea so often in town with her old friends.

CRATCHIT:  Cable?????    But she worked so hard all of her life, Mr. Scrooge!   Why is the City of London reducing the amount that was promised her?

SCROOGE:  It’s your fault, Cratchit!   You should have saved more, you lazy bumpkin!   Then you could take better care of your mother!   Do you think the city is made of money?!

CRATCHIT:  But Mr. Scrooge, my wages haven’t risen in years – and everything seems to cost a little more every year.  How can I save more?

SCROOGE:  Zounds, man!   Pull yourself up by your bootstraps!    Stand on your own two feet, and stop looking for assistance from others!   What’s happening to you is happening to everyone.  We are spending less money and collecting more taxes.   The whole city will feel the pinch.

CRATCHIT:  But, Mr. Scrooge, if we pay people less and raise their tax rates, they will all become poorer.  The city’s struggling businesses will suffer even more, because Londoners will be unable to buy all of the things they buy now.  Even more people will lose their jobs, and those that keep their jobs won’t be able to pay as much tax overall, even if their tax rates have gone up.   And even if we cut the rates of assistance for the City Dole, the increased number of people receiving assistance will mean that we end up spending more money anyway.  Shouldn’t we increase spending now and keep taxes low, perhaps even lower those taxes further, and then readjust taxes and spending later, when the city is back on its feet?

SCROOGE:  Cratchit, you are a very clever accountant indeed. That’s why I hired you.  And perhaps you are right from the point of view of the city’s finances.   But truth be told, the issue here is not really the city’s budget deficit.   The key to the whole business is discipline, Cratchit – discipline!

CRATCHIT:  What do you mean, Mr. Scrooge?

SCROOGE:  The people of London are suffering now, Cratchit, true enough.   And that’s something of which we can take decisive advantage!  The citizens feel the pinch in their own personal finances.  Oddly enough, when people struggle in this way and make do with less, they mistakenly assume the city government should behave the same way and pursue the same kind of austerity.  They don’t understand that the city has much more flexibility in its budget, and that the city’s austerity compounds their suffering, and makes it even worse.  But their ignorance is our gain, Cratchit!   We should take advantage of this situation to compel people to accept a lower level of service from the government!

CRATCHIT:  But, by the saints, Mr. Scrooge!   Why should we want the city to serve people less??  Didn’t we take this job to serve the public and improve their well-being?

SCROOGE:  Cratchit, you took this job because I was good enough to hire you.  Don’t you forget that!   And as for me … I took this job so I could drown the city government in a wash basin.

CRATCHIT:  Heavens, Mr. Scrooge!  That seems awfully cruel.   Why would you want to do that?  Why don’t you want the city government to work better and do more for people?   Many of our citizens are unemployed.

SCROOGE:  Bah Humbug!  Let them remain unemployed and decrease the surplus workforce!

CRATCHIT:  Mr. Scrooge, I have been wondering about something.  We spend our days here counting and re-counting the city’s golden coin, and entering the totals in our account books.   Where does all that golden coin come from?

SCROOGE:  You know very well Cratchit!  From tax receipts!  You do the accounting yourself!

CRATCHIT:  But I mean before that Mr. Scrooge.  Where does it come from in the first place?

SCROOGE: The devil take you, Cratchit, you are impertinent!   But since I admire persistence, I’ll let you in on the secret.   I am an alchemist, and I manufacture the coins in the back room from thin air.  I run the monetary system for the whole city of London from this office.  This office is where all the coin comes from.  The city will have exactly as much coin as I determine it will have – no more and no less.

CRATCHIT:  But then, we don’t really need to get the coins from the Londoners by collecting taxes.  You can always make more.

SCROOGE:  In principle … yes, Cratchit.

CRATCHIT:  So the whole accounting business is meaningless, is it not Mr. Scrooge?  We can never have a meaningful shortfall of something that you can manufacture from thin air.

SCROOGE:  Not quite, Cratchit.  Don’t get carried away!  We can never have the people of London knowing what I just told you.   If I just keep manufacturing golden coins to meet the ceaseless demands of the population, the coins will become too abundant and will lose all their value.  The value of people’s savings will be destroyed.

CRATCHIT:  Most of the poor and the working people have no savings, Mr. Scrooge.

SCROOGE:  But many of our finest citizens do, Cratchit.  The city does not exist to serve the needs of the poor and the lowly.   It exists to serve the needs of the best and the most prosperous.

CRATCHIT:  I can’t agree with that, Mr. Scrooge.   But I suppose I understand what you are saying about the need to exercise some restraint in the manufacture of new golden coin, so that the money the people use remains stable.  But consider this:  As I said before, many of the people in London are unemployed.  If you make more golden coin, and use it to pay the people to make more candles, carry more coal from Newcastle, clean more chimneys, raise more Christmas geese and bake more Christmas puddings, won’t that mean there is both more golden coin in circulation and more goods and services being manufactured at the same time?  So the coin will maintain its value, will it not?

SCROOGE:  Umm… possibly.

CRATCHIT: And if the businesses in the city are unwilling to hire people to create this full employment, couldn’t the City of London hire them directly?

SCROOGE:  A free lunch then, eh Cratchit?  Is that your solution?!

CRATCHIT:  No sir.  Nobody will get a free lunch.  Everyone will work for their wages. But everyone will be employed, and the wages will buy as much as before. And since everyone will be employed, their employers will have to treat them better, and pay them better wage in the future. We’ll live a more prosperous and equal life.  Some will have a little less, but many will have much more.

SCROOGE:  Damnation Crachit!  Have you been reading again?!

CRATCHIT:  Why yes, Mr. Scrooge.

SCROOGE:  I thought I had increased your hours sufficiently to make sure you didn’t have enough time to read.

CRATCHIT:  Yes, Mr. Scrooge.   But sometimes I read things on the internet during my spare time at work.

SCROOGE:  The inter … what???   Never mind!   Humbug on your benevolence!

CRATCHIT:  Mr. Scrooge!!   That seems so mean-spirited!   But even if you have no spirit of charity, consider the matter from the point of view of enlightened self-interest.   If we paid people to produce more for more goods and services, wouldn’t we all be better off?

SCROOGE:  There is no “we” Cratchit!  There is only a world of me:  a me here and a me there.  We are all separate, and we don’t count for the same amount.   Sometimes a me in one place is much more important than a me somewhere else.  And the whole system only works if we maintain the established social degrees and public discipline.

CRATCHIT:  Discipline again, Mr. Scrooge?

SCROOGE:  You see, Cratchit, it is necessary that we always have some unemployed, struggling, starving people.  If not, the social foundation of London will crumble.  If everyone were employed, they would all be able to bargain for higher wages.  What would my old business associates say – Mr. Dimon and Mr. Blankfein and Mr. Immelt and Mr. Rubin and Mr. Schmidt?   And what about the fellows at the Jacob Marley Foundation who devised the austerity plan I am following?   These are the people who put me in office.  They didn’t give me this position to protect the unemployed rabble of London.  My job is to protect the interests of the upper crust.

CRATCHIT:  I had no idea that was our business here, Mr. Scrooge.

SCROOGE: Were you born yesterday, Cratchit?  Open your eyes!

CRATCHIT: I thought Obama & Boehner were a reputable and public-spirited firm.  Why have they gone along with this sordid business of keeping people unemployed to protect the rich?

SCROOGE: They got their positions the same way I did, Cratchit – the same way.

SPIRITS: Scroooooooge!


SPIRITS: Scrooge!   We are the spirits of Economies Past, Present and Future!  We are Mitchell, Mosler, Wray, Fullwiler and Kelton!

SCROOGE:  Spirits, I fear thee!   What is your message?

SPIRITS:  Attend to your proper business!

SCROOGE:  But what is my proper business?

SPIRITS:  The public interest is your business!   Humanity is your business!   Behold the past of a full employment policy that was abandoned!   Behold the present of want, ignorance, insecurity, stagnation and suffering!   Consider well the future of decline, strife and penury, and the fall of the city!

SCROOGE:  What must I do?

SPIRITS:  Forget both the Big Fiscal Cliff and the Little Fiscal Cliff.    Use your power over the city’s monetary system to run a proper sized deficit.

SCROOGE:  But how large should my deficit be?

SPIRITS:  Large enough to make sure everyone is employed.  You have been entrusted with the government and the public business of the city.    Each resident should have a good job and a good wage.    The alchemy of the golden coins must be used to advance the well-being of all of the people, not just the few and the powerful.  Farewell!

SCROOGE:  I will change, spirits!  It is not too late!  Boy!  Boy!   Take this message down to Obama & Boehner.  Tell them to cancel Big Fiscal Cliff!   And tell them there will be no Little Fiscal Cliff either.

BOY:  Yes, guv’ner!

SCROOGE:  And Cratchit, bring me to Tim!

CRATCHIT:  Tim Geithner?

SCROOGE:  No, not that Tim, my good man!  Tiny Tim!

CRATCHIT:  Yes sir, Mr. Scrooge!

SCROOGE:  Tim!   Tim!    I have a present for you Tim, my boy!

TINY TIM:  Is it an iPad?

SCROOGE: No, it is something even better than an iPad! It is a future, Tim, a real future!  Not the future forewarned of by the spirits, but a future in which you have a decent job and a decent life, and in which you don’t have to struggle with the miserable hours, bone-chilling insecurity and declining standard of living that your poor father feels and fears every day. It is a future in which you can take care of your family, and your elders, and still have a little left over for yourself.   It is a future with less fear and anxiety, in which we share in the general prosperity of our great, good city!

CRATCHIT FAMILY:  It’s a miracle!

CRATCHIT:  It’s not a miracle.  It’s the spirit of MMT!

TINY TIM: God bless us!   God bless us, every one!

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