So when the story’s reported that “AOC says tax the rich to pay for universal health care” or whatever, immediately everyone who pays close enough attention to economics to be aware of MMT and understand what it is – a description of the way things work, not an ideology sits up and goes “Wait, she knows better, why is she saying that?”
Because we live in a world where nearly everyone just reads and reacts to headlines, suddenly there’s all this talk about how AOC either isn’t paying attention or doesn’t know what she’s talking about, and she should know better, and she’s had prominent MMT economists advising her, why’s she saying all this?
But she never said it. The closest it came is in an exchange that begins around the 20 second mark in the embedded video for context. AOC, having asked why it’s so radical to expect and advocate for the application of our very best minds and resources to the solution of key problems threatening national and global stability and even the future of the species, advocated for strong spending on environmental progress to be entirely off fossil fuels in 12 years.
What Actually Happened
At around thirty seconds in the clip, Cooper says “This would require raising taxes.” Note that he does not say “this would be paid for by raising taxes” or “we would have to raise taxes to pay for this wouldn’t we?”
AOC responds, correctly, that it would. The reason why this – this aggressive and powerful vision of the future in our hands – would require raising taxes is because a progressive tax system with a 50-70% rate on the uppermost wealth percentiles spurs growth, and that has been proven many times.
But that question was never asked in the interview, nor was it answered. Cooper did not ask “how will we pay for this?” This may be because he’s economically literate enough himself to know that’s a meaningless question in this country or any other that is a sovereign issuer of its own currency, or it may be more or less lucky phrasing. I don’t think Cooper’s particularly stupid or anything, so it seems reasonable to think he’s at least passing familiar with MMT.[Added just prior to press time: On CNN’s extended broadcast of clips from the same interview, which was being broadcast live as I was writing this interview, Cooper does later ask the question “how are we going to pay for it?” AOC’s answer – “the same way we pay for everything else,” and why even bother asking? Why are we asking how to pay for it instead of asking why that’s even a question in the face of our current challenges and opportunities?
This is, economists know, the correct answer. And it’s still not what the headlines claim she said, nor does it imply anything that would reasonably support that assertion.]