By J.D. ALT
In a recent essay (“A Strategic Thought”) I suggested that right now is an opportune moment for some brave progressive leader to step out and explain what modern fiat money is, why we’ve been using, in fact, it for the past half century, and how it changes the way we imagine our federal government pays for public goods. Whoever takes on this challenge, I suggested, would be treated as a harlequin by mainstream media and economic pundits—and would be marginalized and shunned by other political leaders on both sides of the aisle. No main-stream politician is ready to hear—let alone agree—that the federal government can issue and spend as many dollars as needed to accomplish whatever the nation has the real resources to undertake. No main-stream economic pundit is ready to hear that our federal “deficit” is a necessary aspect of a healthy fiat monetary system. No main-stream Republican or Democrat is ready to acquiesce to the reality that our national “debt” is not something we have to “repay” to anyone but is, in fact, the savings account of our private sector economy. No main-stream anybody who, by definition, depends on their position in the main-stream idea-flow for their livelihood and personal status, is ready or willing to hear, or even seriously listen to, any of those realities. Yet at some point all of it has to be formally presented and argued on the national stage—otherwise, modern fiat money, and the enormous possibilities it creates for human society, will continue to languish forever as a suppressed and poorly understood reality.
Putting modern fiat money on the stage now, I suggested, would have the merit (in the near term) of keeping the conservative deficit hawks activated—which will pose the same difficulty for President Trump as it did for President Obama: it will force him to put any spending proposals through a “budget deficit” and “national debt” logic. This will, in effect, make it virtually impossible for him to spend in any meaningful way—which is strategically important because, as I noted, one of the essential tools of every authoritarian populist is to send a stream of dollars, perks, or rebates to his, or her, voters.
In the meantime, the newly emerging progressives—who I believe will rise out of the ashes of the “old” Democratic Party—can stand just far enough to the side of the Harlequin to avoid being pummeled themselves. While the Harlequin makes a constant fool of herself, or himself, explaining the realities of modern fiat money and the possibilities it unfolds, the “new progressives” can propose serious federal spending programs that would, if implemented, have dramatic impacts on specific, real communities-in-need across America. As I suggested, the new progressives can safely call these proposals “deficit spending”—fitting themselves (at least temporarily) into the existing misunderstandings and power-structures of the monetary system. But the Harlequin’s message will be out there, and can be picked up and echoed in many different ways. Once it is on the stage of serious debate—even if its “role” is to be shamelessly and irrationally denigrated—its arguments and possibilities will begin to percolate into popular awareness.
The “new progressive strategy,” then, is to (a) keep Trump tied up with the fiscal hawks of his own party; (b) make serious federal spending proposals that would provide real assistance to communities-in-need across America (whether those proposals currently have any prospect of enactment or not); (c) do not directly contradict or delegitimize the message of the Harlequin, but allow, enable, and (to the extent possible) assist it to percolate into the popular awareness; (d) make a strong showing in the mid-term elections based upon the concrete spending proposals to assist specific local communities; (e) win the Presidency in 2020 with a “new progressive” platform that includes at least a “preliminary” acknowledgement of the possibilities of using modern fiat money more rationally to achieve national goals and address the real needs of America’s struggling citizens.
But who is willing to play the Harlequin? Who has the public face, credibility, knowledge, charisma—and courage—to pull it off? Any suggestions?