Why Understanding Fiat Currency Matters For Scientists: We Are Being Pitted Against Public Health

Cross posted from MikeTheMadBiologist.com

Because we’re being played off against food stamps by Republican congressmen:

We’re only asking for a 5 percent decrease [in SNAP] in a time of budgetary crisis, where this is being put up against funding the NIH for basic medical research, this is against putting money into defense.

But this is stupid, since it assumes the federal government can run out of money. It can’t, since it’s a currency issuer. Let’s work through a couple of thought experiments. First, the Mars rover (boldface added):

It’s a completely false tradeoff, and one scientists have to face all the time.To put it simply, our dollars are not “precious” because we have a fiat currency; we can spend the money. Being a currency issuer is very different than being a currency user. There is no reason to choose between Mars landing or fixing all our other problems if money is the only limiting ‘resource.’ Hell, we could afford to put a whole goddamn showroom of ATOMIC SPACE SCIENCE TANKS! WITH JETPACKS! on Mars.

Actually, that last part might not be true. Landing ATOMIC SPACE SCIENCE TANKS! WITH JETPACKS! seems to be a very intensive undertaking. We might not have enough mohawk-coiffed rocket scientists. Might need to rustle up a few more. We could run into resource limitations–maybe we want some of our engineers, computer whizzes, and mohawk-coiffed rocket scientists to do something else worthwhile (figure out how to download porn faster!). Maybe making a bunch of ATOMIC SPACE SCIENCE TANKS! WITH JETPACKS! would cause shortages in making other fancy gizmos (dunno). It might cause inflation in the ‘send stuff into outer space’ sector. Or maybe we simply don’t want that many ATOMIC SPACE SCIENCE TANKS! WITH JETPACKS! But money is never a limiting resource when you have a fiat currency.

Let’s move on to the NIH (boldface added):

As I’ve noted before, this has ramifications for science funding too. If we wanted to, we could double NIH funding. Arguably, if we don’t change how and what the NIH fund, we could wind up right back where we are today, with too many investigators chasing too few dollars, just at a larger scale. So maybe we shouldn’t increase funding that much until we figure out how to do it better–but that’s a completely separate policydebate. Operationally, as long as we have enough scientists and scientific materiel, there’s no reason why we couldn’t double NIH funding (remember: could and should are different).

So let’s stop worrying about deficits and start worrying about real problems (here’s one you can worry about). Unemployment, underemployment, and stagnating wages, along with a decaying infrastructure, that’s what we should be worrying about, not federal deficits denominated in currency the U.S. government controls.

If scientists don’t start understanding that money by itself can not be a limiting resource, we’re going to end up being pitted against other worthwhile things–and what’s the point of improving human health through better medical interventions if we simultaneously weaken it by making children hungry? We can’t let conservatives divide and conquer based on some simplistic misunderstandings.

This economics stuff matters.

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