Coronavirus Response Illustrates Validity of Key MMT Insights
WASHINGTON, March 12, 2020 /PRNewswire/ -- Recently, the House passed an $8.3 billion spending package to combat the spread of coronavirus. Notably, the bill was passed without any tax offsets. Rep. Greg Walden said, "I don't think this is the time to hesitate and wrangle over how to pay for something as acute to public health as this is." This illustrates the dynamic that Our Money strives to make clear to audiences through our work. Congress has the capacity to simply appropriate funds as it deems fit. "Pay fors" are not actually necessary to pay for anything. As long as the entailed spending does not pose an inflation risk, it is perfectly responsible for Congress to appropriate new funds without offsets in order to attend to public priorities.
The response underscores the falsity of the economic framework earlier put forth in hearings by Alex Azar, former pharmaceutical company executive and lobbyist, who is now serving as President Trump's Secretary of Health and Human Services. Azar told Rep. Jan Schakowsky, referring to any vaccine developed to prevent the spread of coronavirus, "we would want to ensure that we work to make it affordable, but we can't control that price, because we need the private sector to invest…. Price controls won't get us there." As the swift appropriation of $8.3 billion without offsets illustrates, we do not need the private sector to invest in order to fund research and development, or manufacture and distribution for a vaccine. It is entirely within the capacity of the federal government to make vaccines, or other medical treatments developed in response to the contagion, available free of charge to the public through federal appropriations.
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