Can Warren Mosler teach Americans how to stop worrying and love deficits?
He ran a hedge fund, lives in a Caribbean tax haven, and loves fast cars and yachts—not obvious qualifications for a left-wing guru. But that’s what Warren Mosler is rapidly becoming.
The 69-year-old is a tinkerer who likes to figure out how things work, then try to make them work better. He did it with interest-rate swaps and the ferryboat that links two of the U.S. Virgin Islands, where he’s running for governor. Mosler is convinced that he’s identified a fix for economics, too.
It’s called Modern Monetary Theory, and Mosler, who has only an undergraduate degree in economics, will tell you frankly that it’s been a struggle to win acceptance from academia. But now MMT is gaining an unlikely foothold in the Democratic Party. Several candidates in the midterm elections, and a few who have an eye on 2020, are coming out with plans that draw on Mosler’s ideas—even if they’ve never heard of the man himself.
MMT’s main argument is that governments with their own currencies can’t go broke. They have more room to spend than is usually supposed and don’t need to collect taxes (or even borrow) to pay for it. One thing they can, and should, spend on is a jobs guarantee—offering work to anyone who wants it.
In a country where fear of budget deficits and national debt is widespread and unemployment is near record lows anyway, that’s a hard sell. But it may be getting easier. President Donald Trump has helped: By injecting massive stimulus into an already growing economy, he’s sidelined the fiscal hawks in his own party.
This story is from the October 15, 2018 edition of Bloomberg Businessweek.
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This story is from the October 15, 2018 edition of Bloomberg Businessweek.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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