This post describes how those in power use small numbers to hide mass suffering, and large numbers to hide immorality and corruption. For an alternative, U.K.-based take on these concepts, see this 2020 post by MMT Podcast host, Christian Reilly: Some numbers are big. Let me help you get over it.
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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 the MMT project. 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.
How can small numbers ever be harmful? How can large numbers not be harmful?
In December of 2018, the Federal Reserve raised its target rate by .25%, which is less than 1%. According to an analysis by Bill Mitchell, of the Fed’s own press release and data, the increase was a conscious choice by the Fed to disemploy at least 1.2 million more Americans. (It also exacerbated inequality by further enriching the rich.)
.25 is almost 0! How can a number that small ever be harmful?
By the same token, MMT shows that the inequality of the national debt is always a problem but, in and of itself, the raw size never is. But the national debt is currently $26 trillion. That’s a twenty six followed by twelve zeros:
How can a number that big not be harmful? [Related post: The reality of the national debt.]
The truth is that .25 is such a small number, it’s used as a tool to hide the fact that the Federal Reserve will do whatever it takes to ensure that 1.2 million additional, actual human beings lose their jobs. The scaremongering regarding the massive raw size of the national debt is a signal to the public that they will not be given anything they need to survive, because doing so would make that big scary number even bigger.
In 1983, UK Prime Minister Margaret Thatcher informed the world: “The state has no source of money other than the money people earn themselves…. There is no such thing as public money. There is only taxpayers money.”
What she really meant was that “there is no such thing as public money because we have decided to no longer create it for you.” In other words, it was a signal to average people to brace for crushing and ongoing austerity, which so many all around the world have now endured for almost forty years. Thatcher and her neoliberal descendants have been so successful, it‘s increasingly possible that we face worldwide societal collapse in the not so distant future. We can certainly change that path, but the window for doing so appears to be quickly closing.
Here’s a quote from Stephanie Kelton‘s 2020 book, The Deficit Myth: “MMT fights involuntary unemployment by eliminating it” (pg 66). What this means is that the goal of price stability can be achieved, and with much greater and longer lasting success, by stopping real-world human suffering with truly full employment.
- Managing price stability only for some, on the backs of millions (our current system)
- It is official American policy to keep millions unemployed.