Our Money: MMT for State and Local Governments During COVID-19 Crisis
WASHINGTON, March 24, 2020 /PRNewswire/ -- During the COVID-19 crisis, state and local governments will inevitably come under great pressure to provide funding to attend to the urgent needs of constituents. Our Money urges state and local governments to be cognizant of the fact that the federal government is in a position to responsibly appropriate new money and disburse it to state and local governments to assist them in meeting constituents' needs, simply by issuing new money. Federal lawmakers are increasingly aware of the Modern Monetary Theory budgetary framework which tells us that the federal government, as a currency issuer, has this capacity. State and local officials should pressure Congress to provide federal money to state and local governments, with the knowledge that Congress need not raise taxes, nor make any interest payments it does not wish to make, in order to fund its spending.
State and local governments have a crucial advantage over the federal government because they can cater to the needs of their specific communities and are better positioned respond to the concerns of those communities. However, unlike the federal government, state and local governments do not have the capacity to issue money. This means that state and local governments are far more limited in their capacity to appropriate funding for their constituents' priorities, as doing so requires either raising taxes or issuing bonds with excessive interest attached. MMT explains that the federal government faces no such constraints and is only limited by the availability of real resources and inflation risk. State and local governments should not tolerate the federal government failing to provide needed funding to address the COVID-19 crisis, particularly so long as inflation is not an issue.
About Our Money
Our Money is a campaign which seeks to popularize an understanding of the importance of our public power of money creation and demand that it be used on behalf of the public to the fullest extent responsible, rather than diverted towards private interests.
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Tomeka B. Scales, Ph.D.
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Our Money
www.ourmoneyus.org
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