Q: What are federal programs funded by? A: The decision to do them.

At the federal level, the decision to do something is the funding. In the United States, this means the votes in each house of Congress and the President’s signature. As Clint Ballinger told me (in episodes 39 and 40 of my podcast, Activist #MMT), “When the gavel hits the desk and they say we’re going to build a bridge, that’s the funding.”

Related post: If federal taxes don’t pay for anything, then why do we pay them?

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These resources were created by Activist #MMT, the podcast (Twitter, Facebook, web, please consider becoming a monthly patron). This post was last updated September 8, 2020.

Disclaimer: I am a layperson who has studied MMT since February of 2018. I’m not an economist or academic and I don’t speak for MMT. The information in this post is my best understanding but I don’t assert it to be perfectly accurate. In order to ensure accuracy, you should rely on the expert sources linked throughout. If you have feedback to improve this post, please get in touch.

When the gavel hits the desk

Once law, currency is issued by the central government (as specified in the new law) in order to communicate that decision to the non-government sector (meaning, those not in the government – in other words, us!). This is so they know what to do, what to do it with, and how and when to do it. (At tax time, that same currency serves as proof that it was done – or at least, someone did something.)

Knowing this, the “How’re you gonna pay for it?” question is revealed to be truly nonsensical (and the answer even more obvious: “It’s funded by the votes and the president’s signature”).

Taking it a step further, a federal representative expressing concern over inflation is nonsense on top of nonsense. (Setting aside that there is a big difference between Inflation the Boogeyman and inflation in reality.)

Do you want to do this program or not? Do you believe healthcare is a right for all or do you not? As a federal representative, you have access to almost any expert in the country. Have you had these experts analyze the practical, resource, and inflationary impacts of that program? What was their conclusion? Not knowing the answer can only mean that you have not asked the question. Therefore, how can we conclude anything but: you don’t care enough about the problem to even look into it?

Finally, we as citizens must use this knowledge to demand our representatives make different decisions. If they won’t do it, then perhaps we should replace them with someone who will – or become that someone who will.


Top image: QuinceCreative on Pixabay (license)