Stephanie Kelton, senior economic adviser to Bernie Sanders' presidential campaign.
Medicare for All works "like a tax cut"
by Tom Sullivan
Stephanie Kelton, senior economic adviser to Bernie Sanders' presidential campaign.
The weekend's mass shootings and Congress' summer recess have shifted national focus away from stories that were headline news days before. (That's not to allege a conspiracy, just an observation.) As a reminder, what about the investigations into Jeffrey Epstein's sex trafficking and what his pal Donald Trump is hiding in his taxes? Whatever happened to those?
This item related to Medicare for All also flashed across the Internet Monday and quickly disappeared under the body count.
Prof. Stephanie Kelton teaches public policy and economics at Stony Brook University. Kelton is the face of Modern Monetary Theory (MMT) and was chief economist on the U.S. Senate Budget Committee in 2015 and in 2016. She advises Sen. Bernie Sanders’s 2020 presidential campaign, as she did in 2016.
In an appearance on Bloomberg's "Balance of Power" to discuss Medicare for All, Kelton addressed the standard question from pundits accustomed to thinking about the U.S. budget the way people think of their household's: How do we pay for it? Her answer is not tight enough for a stump speech or debate, yet, but worth noting nonetheless:
The thing is with Medicare for All is that ... now we're going to end up using fewer national resources to deliver healthcare for everyone. So if you think about it, it actually works like a tax cut for 95% of the American people because you're going to end up spending, on average, about $3,000 a year less than you're spending today. That's $3,000 that stays in your pocket. It has the same economic effect as if someone cut your taxes and left you with $3,000 more a year. So Medicare for All really does work like a tax cut.The question for Kelton is how do we transition from making health care payments as we do today to a more efficient system where we make smaller ones?
Spending even one more second discussing how we will pay for Medicare for All (or any program that benefits the powerless) is a supreme and cosmic waste of time. In fact, the entire “pay for” question is a sham and a scam, and a trap and a trick. It is cruel and unfair to the millions and millions of Americans that are suffering from ailments, stress, red tape, and bankruptcy.Answering a tangential MMT question, Kelton explains that, as the issuer of currency, when it "borrows" the U.S Treasury is taking back money its budget spent into the economy. "Households borrow money they don't have," Kelton explains. "The federal government borrows back money that it deposits through its budget deficits." The government doesn't get money from the economy. It injects money into the economy first. It takes money out through taxes to control inflation and aggregate demand.