'100% crazytown': Alleged econ prof's take on the Green New Deal should come with a warning label

Is our children learning? Hopefully not from Stonybrook Professor of Economics and Public Policy Stephanie Kelton. Check out her take on Alexandria Ocasio-Cortez’s Green New Deal:

Q: Can we afford a #GreenNewDeal?
A: Yes. The federal government can afford to buy whatever is for sale in its own currency.

— Stephanie Kelton (@StephanieKelton) February 7, 2019

Did we mention that she was also the chief economist for Democrats on the Senate Budget Committee?

This is some brilliant economic thinking right here. https://t.co/LfQph2SoWC

— Esoteric Jeff (@EsotericCD) February 7, 2019

Bet you guys can’t guess where this is going …

She literally — LITERALLY — goes onto endorse the idea of Federal government just "printing its own money" to pay for whatever it buys in the next tweet.

Professor of Economics & Public Policy!

— Esoteric Jeff (@EsotericCD) February 7, 2019

Yep:

Q: Are you saying the government can just "print the money" to pay for new spending?
A: Is there any other way?

— Stephanie Kelton (@StephanieKelton) February 7, 2019

Q: Is there another way? Yes, you can raise taxes!
A: That's not how it works. Taxes remove some of the money the gov spends into the economy. You could spend & tax the same amount. But the gov normally spends more than it taxes so that the economy can keep the extra dollars.

— Stephanie Kelton (@StephanieKelton) February 7, 2019

Q: But that's deficit spending, so now you have add to the national debt.
A: Except the $ to buy the bonds comes from the deficit spending! It's not "borrowing" in any meaningful sense of the word. When people swap $$ for bonds, they're just holding another kind of gov money.

— Stephanie Kelton (@StephanieKelton) February 7, 2019

Q: But don't we eventually have to pay back the debt?
A: The government retires bonds all the time. It's simple. You just debit (-) the seller's securities' account and credit (+) a reserve account. It's all done using a keyboard at the NY Fed.

— Stephanie Kelton (@StephanieKelton) February 7, 2019

Q: But what about the interest payments? There will be less money available for everything else.
A: Wrong. The gov makes interest payments the same way it makes all payments. It can always spend more on other things. Inflation is the limit.

— Stephanie Kelton (@StephanieKelton) February 7, 2019

Guys. Guys.

Do you not realize how self-damningly hilarious that tweet is? Handwaving away "inflation" as a mere "limit" is like saying, well, "gravitational acceleration is the limit" to how far you can fall without dying & then advocating jumping out a 10th floor window.

— Esoteric Jeff (@EsotericCD) February 7, 2019

Actually, jumping out of a 10th-floor window would still be less painful than Kelton’s thread.

Q: So interest on the debt can never be a problem?
A: All spending carries inflation risk when the economy gets to full capacity. If people are receiving/spending too much interest income, the Fed can cut rates. Or Congress can cut spending or raise taxes.

— Stephanie Kelton (@StephanieKelton) February 7, 2019

Q: Are you saying we can have a #GreenNewDeal without *any* new taxes?
A: It depends what's in the GND and whether the US economy has the extra capacity to absorb the proposed spending *at the time it occurs.*

— Stephanie Kelton (@StephanieKelton) February 7, 2019

Q: But we're talking about trillions of dollars over time!
A: The GOP did well over $5 trillion in tax cuts and war spending without causing inflation to accelerate. And some GND spending will increase capacity, which gives you more room to spend safely.

— Stephanie Kelton (@StephanieKelton) February 7, 2019

Anyone else need a stiff drink after all that?