Greenville, NC—I said in a congressional campaign strategy meeting a few months ago that politics in North Carolina is a contact sport. And, I believe that.
But, it’s not just in NC, it’s all over the country. If political campaigns are managed right, it should be a full court press. The voters deserve to have their candidates challenged and held to a higher standard.
Jefferson once said that if Americans are given all the facts, they can never make a wrong decision. The problem is that there are many self interest groups out there in medialand spending a lot of money to distort those facts..
Yesterday, a friend told me she was not going to watch the debate because all politicians will tell you anything they think you want to hear just so they can get elected.
To some extent, I agree. But, it’s a little more complicated than that.
Here’s a few things to consider before you watch the first debate between Kay Hagan and Speaker Thom Tillis
Several months ago, Paul Ryan was asked, by an MMTer, (Modern Monetary Theory advocate) why his budget tried to bring down the national debt at a rate that would significantly hurt the economy. His answer was that people want to see the deficit come down.
But, here’s the problem: money doesn’t work like that anymore.
I’m certainly not in a position to school anyone on MMT (Modern Monetary Theory) but I do have conversations with people who know more theory than I: Mike Wright, Bruce Patrick and international monetary theorist Warren Mosler. Mosler, by the way, is a former hedge fund manager—one of the most successful in the business.
In a nutshell, since the Nixon administration, America has operated on a fiat currency—we’re not tied to a gold standard anymore. That is a game changer.
Taxes need to be low (and I would argue corporations should not be taxed at all). And, although taxes serve about four absolute purposes, the key is that taxation, in and of itself, creates unemployment.
But, here’s the rub: on the flip side, if corporations don’t pay tax then they need to reinvest that money into American jobs. Why? Because mv=pq.
The key here is “V”, the velocity of money. The current one percent pay less tax than at any time in our taxation history. But, they haven’t reinvested that cash into jobs, they have banked their savings, albeit in sometimes creative ways like offshore accounts.
So, the final answer is this: if corporations want to not pay tax on sales and profits, they must be required to create jobs with that money.
Here’s some proof: remember that $300 tax incentive check you got from the government all those years ago? Well, that economic stimulus was suppose to have created job growth through spending. It didn’t quite do that as planned because many people paid off credit cards or banked the cash in saving accounts.
Arguably, spending equates to job growth and banking your cash does not.
Politically, the tea party and Republicans are right on tax. Taxation does, indeed, hurt the economy. Where they fail is by not legislating the one percent and corporations into spending their tax savings on job growth.
Now, before you ask me to turn-in my “tree hugging liberal Democrat” card, let me explain a little further.
A week or so ago, I had the pleasure to talk face-to-face with Sen. Bernie Sanders (I-Vt). Although Sanders isn’t an “official” MMTer, he does advocate federal spending on social programs.
Many may think Sen. Sanders—a self reported socialist democrat—goes overboard on some spending issues, but I would argue that he does understand the need of the federal government to intervene with a monetary fiscal policy that creates a safety net for the least among us.
A safety net in housing, the power to adequately feed the hungry, the medical care of our people and the ability to provide an exceptional education for our children should not be a problem for the richest and greatest country on earth if it’s approached logically.
That logical approach is founded in the understanding that government must spend and, in fact, deficit spending is needed to sustain and grow our economy.
Especially, since the United States can create out of thin air the money it needs for literally anything it might require or want. Like it or not, Americans live on a fiat currency.
As former Fed Chairs Alan Greenspan and Ben Bernake both said on many occasions, “the United States has the ability to pay any debt, at any time.” Or, to create money at any point it sees fit.
If any MMTers read this, they will probably be outraged at my simplification of this monetary theory. And, they should be angry, I’ve left out a lot of information and most all the important formulas. I’ve also left out the Fed and their ability to create money.
But, I’m addressing the theory here because it’s important to understand the difference between Sen. Kay Hagan and NC House Speaker Thom Tillis.
Kay Hagan is a moderate. She’s proven herself as a middle of the road, logical Democrat—who has looked for compromise between two extremes.
Thom Tillis is much like Paul Ryan. Both know that the extremist far right positions on taxation and debt are contrary to real fiscal responsibility and overall will lead to our social, political and financial destruction if their policies are left intact. Yes, the stakes are that high. But, it seems Tillis is more concerned with his ability to fund his campaigns with special interest money. Money he can only get if he proposes and adheres to the ultraconservative special interest ideology.
It’s much better to have a moderate in Congress than to have extremists willing to shutdown the United States Government when they don’t get their way.
Look into MMT, especially taxation and deficit spending. Then, look into Kay Hagan’s voting record and ideology. No politician is perfect, but Hagan’s moderate approach is closer to the truth than Tillis.