Sometimes it takes a crisis to open our eyes.
 | By Max Strasser International Editor, Opinion |
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March 27 feels like a hundred years ago, doesn’t it? Maybe that date doesn’t stand out to you: It was the early days of the pandemic, the official death toll from Covid-19 in New York City was only 365 people, and Americans were just starting to get used to life under lockdown. It was 60 days before George Floyd said “I can’t breathe” and America — and the world — erupted in protest, forcing a reckoning on policing and racism. |
But that was the day that the CARES Act, a $2 trillion stimulus bill, was signed into law. And I wonder whether it will prove to be the day that thinking about economics changed forever. |
I’m Max, and I’m the international editor for Opinion. My day job is overseeing our coverage of everything beyond America’s shores. But for now, I’ll be moonlighting as a semiregular host of this newsletter, sharing some thoughts on the Opinion section’s journalism — essays, graphics, videos and art — from the United States and beyond. |
I’ve been thinking about March 27 because of Stephanie Kelton’s recent Opinion essay, “Why I’m Not Worried About America’s Trillion-Dollar Deficits” Stephanie is an economist and probably the most famous proponent of “modern monetary theory,” an increasingly popular economic view that holds that deficits in and of themselves don’t matter, federal debt isn’t like a household’s, and as long as inflation is under control, many governments can spend freely to encourage economic growth. |
The truth is that M.M.T. (as people in the know call it) is more complicated than that simple summary, and I’m not going to do it justice here. I encourage you to read the piece for a clear, convincing explanation. It describes the moment when Stephanie herself came around to M.M.T., what she describes as a “Copernican moment” of understanding how the economy really works. Having seen the light, she wants the rest of us to see it, too. And now — at a time when more spending is needed — is a perfect opportunity. |
Of course, not everyone is on board. Our columnist Paul Krugman has explained his wonkish objections to the theory from the liberal side. And ideas on the right about austerity and “fiscal discipline” die hard. But it’s difficult to imagine even most Republicans wanting to cut federal budgets right now. |
I’m probably being a bit hyperbolic about March 27. But there are times when a new idea suddenly takes hold, when a country’s understanding about “how things work” shifts. Moments of rupture — in the economy, in politics, in society — are frightening, but sometimes a crisis opens our eyes. |
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