Yes, Let’s Wipe out Trump. But Take Neoliberal Democrats With Him, Too
The Guardian
2213

Just some basic econ 101. While some large states may be able to pull off a Medicare for all plan that would certainly lower costs, they will have to find funding among their constituents for it. This isn’t to say that it wouldn’t be worth doing, only that the states are not the best place to experiment with such large-scale programs.

The federal government has a big advantage over the states above a simple larger pool of insured. It has the power of a sovereign fiat currency that is a no-cost commodity that Congress has available to engineer a society that serves the best interests of the people. It always has had, even when we were revenue constrained by the gold standard.

As the monopoly “issuer” of the currency, the federal government enjoys considerably more freedom in budgeting than do the states which are only “users” of the currency, as you and I are. When we were constrained by the gold standard any spending that caused the money supply to exceed the gold reserve automatically inflated the currency, and this constraint is what our monetary system was designed to work around. This gave us a system that functionally has no need to collect or borrow to fund spending, relegating both to methods of “extracting” currency to allow policy room to create new currency to spend.

Without the gold standard to designate a point of spending at which inflation kicks in, the only constraint on spending is the ability of the economy to produce goods and services to capture the dollars spent by the government. In fact, if deficits are not big enough to compensate for wealth accumulation and the trade deficit the money supply available to the economy is decreased. This is called functional finance, because it recognizes the functional reality of the system and uses the budget to balance the economy, while our fear of debt (that isn’t really a debt to taxpayers) and deficits has reversed this and caused us to obsess on the economy’s ability to balance the budget, to our great harm.

Our reality is that our only concern in affecting a national Medicare for all program is the potential of demand for healthcare to overwhelm the available doctors, nurses, hospitals, etc, not the funding. No matter what the purpose of spending at the federal level might be, the funding is the easy part. When we are asked “how will we pay for it?” the only appropriate answer is “we just pay for it”.

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