Democrats are flirting with a dangerous economic theory

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More Democrats are willing to throw out payment plans for expensive programs due to a dangerous, fringe economic idea: modern monetary theory (MMT). Several Democrats have consulted with economist and former Bernie Sanders campaign advisor Stephanie Kelton, who's largely responsible for popularizing MMT and deficit spending. And February has already seen Rep. Alexandria Ocasio-Cortez justify the exorbitantly-priced Green New Deal by pointing to MMT.

But to know why it won't work, we have to understand what it is.

Put simply, MMT turns traditional fiscal policy on its head. We usually think Washington uses American tax money to fund programs like Medicare and national defense. But MMT adherents argue that because the U.S. government creates that money in the first place, it actually doesn't need tax revenue to fund programs, pay entitlements, or settle debts. The federal government has the power to simply issue its own money to whoever needs it. And since the U.S. government has this power, according to Kelton, expensive policies like college-for-all, military expansion, and national infrastructure development are all naturally affordable.

But much of the popular discussion around MMT stops here—perhaps because this is where it gets complicated. Some hear MMT's claim that governments can afford anything they want and deficits are irrelevant, and, thus, spending can be practically limitless. But MMT recognizes governments still have to deal with inflation. More dollars floating around translates into more people demanding scarce resources, causing prices to rise. The way MMT fights demand-fed inflation is not through "printing" less money, but rather by taking money back out of the economy through taxation. Contrary to popular media's discussion of MMT, the theory still sees taxation as a necessary policy tool.

While some disagreements between MMT economists and orthodox economists are relatively semantic, MMT really just has far too many problems in practice.

Balancing fiscal policy to control inflation requires a much less politicized budgetary process than the one we have. For MMT to work, we would first need something like a Federal Reserve for fiscal policy—which we don't have. And advocating MMT requires an unreasonably optimistic view of interest rates. So long as the growth rate exceeds the interest rate, we should always have enough cash to pay our debts. But even as progressive economist Paul Krugman notes, deficits tend to raise interest rates, slowing investment and growth.

That's where MMT faces a crisis. If debt accelerated to, say, 300 percent of GDP–– which would be sooner rather than later if something like the Green New Deal were passed and funded through deficits––and interest rates were 1.5 percentage points higher than growth, Washington would have to run a budget surplus equal to 4.5 percent of its GDP. If the U.S. had to do that today, we would have to run an $872 billion surplus. That's nearly a trillion dollars doing nothing for Americans outside of holding off an economic disaster. So when Democrats like Rep. Ocasio-Cortez use MMT to dismiss concerns about their programs causing massive deficits, they fundamentally misunderstand its principles.

Selling MMT to the public is a way to endorse popular, expensive programs without admitting tradeoffs.

Most economists aren't persuaded by MMT. No significant academic journals have published MMT papers. But ambitious Democrats don't need to worry about winning over economists. Selling MMT to the public is a way to endorse popular, expensive programs without admitting tradeoffs.

This strategy will backfire economically —but it could politically, too. Back in the 2018 primary elections, candidates endorsed by the moderate New Democratic caucus won 86 percent of their races, while only 40 percent of the candidates endorsed by the Bernie Sanders-esque Our Revolution organization won nominations. In the November general elections, 23 New Democrats flipped seats from red to blue, while the Revolution progressives flipped zero.

Moderates found more success than progressives because the vast majority of Americans don't feel represented by the right-populist Republicans or progressive Democrats. Rep. Ocasio-Cortez may be setting the tone for the rest of her party, but when we step out of our social media bubbles, we find most Americans want more civil leadership and fewer war cries from Washington. And given 71 percent of Americans now think addressing the debt should be among the federal government's top three priorities, Democrats should rise above provocative "sloganeering" and champion fiscal responsibility in the 2020 campaigns, formerly a standard GOP platform, and potentially win over disillusioned Republican voters.

There are plenty of plans for pursuing progressive goals like better healthcare coverage and environmental sustainability that don't rely on a widely-dismissed calculus or require America to risk a serious economic crisis. Democrats would be smart to chase after one of those instead.

John Kristof is a research fellow at the Sagamore Institute and a contributor for Young Voices, writing frequently on fiscal policy and other economic issues. Follow him on Twitter.

On Monday's radio program, Glenn Beck and Stu Burguiere discussed former Starbucks CEO and progressive Howard Schultz, a lifelong Democrat who has not only been disowned by the Democrat Party but he can no longer set foot inside of a Starbucks store because of his success in business.

In this clip, Stu explained how at one time Starbucks only sold coffee in bags until Schultz, an employee at the time, convinced the company to open a Starbucks cafe.

Click here to watch the full episode.

At one point, the owners came close to closing down the cafe, but Schultz eventually managed to purchase the company and transform it into the empire that it is today.

Stu continued, describing how Schultz, a lifelong Democrat, went on to implement liberal corporate policies that earned the company a reputation for being a "beacon" of liberalism across the country.

"And now he (Schultz) can't even get into the Democrat Party," Stu said."That is craziness," Glenn replied.

Citing a "60 Minutes" interview, Glenn highlighted the journey that Schultz traveled, which started in the New York City projects and evolved, later becoming the CEO of a coffee empire.

"This guy is so American, so everything in business that we want to be, he has taken his beliefs and made it into who he is which is very liberal," Glenn explained.

Catch more of the conversation in the video below.


This article provided courtesy of TheBlaze.

This weekend, March 17, Rep. Rashida Tlaib will be speaking at (Council on American Islamic Relations) CAIR-Michigan's 19th annual "Faith-Led, Justice Driven" banquet.

Who knows what to expect. But here are some excerpts from a speech she gave last month, at CAIR-Chicago's 15th annual banquet.

RELATED: CLOSER LOOK: Who is Rep. Ilhan Omar?

You know the speech is going to be good when it begins like this:


CAIR-Chicago 15th Annual Banquet: Rashida Tlaib youtu.be


It's important to remember CAIR's ties to the Muslim Brotherhood. Think of CAIR as a spinoff of HAMAS, who its two founders originally worked for via a Hamas offshoot organization (the Islamic Association for Palestine (IAP)).

A 2009 article in Politico says feds "designated CAIR a co-conspirator with the Holy Land Foundation, a group that was eventually convicted for financing terrorism."

The United Arab Emirates has designated CAIR a terrorist organization.

In 1993, CAIR spokesman Ibrahim Hooper told a reporter for the Minneapolis Star Tribune:

I wouldn't want to create the impression that I wouldn't like the government of the United States to be Islamic sometime in the future.

In 1998, CAIR co-founder Omar Ahmad said:

Islam isn't in America to be equal to any other faith, but to become dominant. The Koran … should be the highest authority in America, and Islam the only accepted religion on Earth.

Notice the slight underhanded jab at Israel. It's just one of many in her speech, and is indicative of the growing anti-Semitism among Democrats, especially Tlaib and Omar.

Most of the speech, as you might expect, is a long rant about the evil Donald Trump.

I wonder if she realizes that the Birth of Jesus pre-dates her religion, and her "country." The earliest founding of Palestine is 1988, so maybe she's a little confused.

Then there's this heartwarming story about advice she received from Congressman John Dingell:

When I was a state legislator, I came in to serve on a panel with him on immigration rights, and Congressman Dingell was sitting there and he had his cane, if you knew him, he always had this cane and he held it in front of him. And I was so tired, I had driven an hour and a half to the panel discussion at the University of Michigan Ann Arbor campus. And I sit down, my hair is all messed up, and I said, 'Oh, my God, I'm so tired of this. I don't know how you've been doing it so long Congressman. They all lie.' And he looks at me and he goes. (She nods yes.) I said, 'You know who I'm talking about, these lobbyists, these special interest [groups], they're all lying to me.' … And he looks at me, and he goes, 'Young lady, there's a saying in India that if you stand still enough on a riverbank, you will watch your enemies float by dead.'

What the hell does that mean? That she wants to see her enemies dead? Who are her enemies? And how does that relate to her opening statement? How does it relate to the "oppression" her family faced at the hand of Israel?

Glenn Beck on Wednesday called out Reps. Ilhan Omar (D-Minn.) and Rashida Tlaib (D-Mich.) for their blatantly anti-Semitic rhetoric, which has largely been excused by Democratic leadership. He noted the sharp contrast between the progressive principles the freshmen congresswomen claim to uphold and the anti-LGBTQ, anti-feminist, anti-Israel groups they align themselves with.

Later this month, both congresswomen are scheduled to speak at fundraisers for the Council on American-Islamic Relations, a pro-Palestinian organization with ties to Islamic terror groups including Hamas, Hezbollah, al-Qaeda, and the Islamic State.

Rep. Tlaib will be speaking at CAIR-Michigan's 19th Annual Banquet on March 17 in Livonia, Michigan, alongside keynote speaker Omar Suleiman, a self-described student of Malcolm X with links to the Muslim Brotherhood. Suleiman has regularly espoused notably "un-progressive" ideas, such as "honor killings" for allegedly promiscuous women, mandatory Hijabs for women, death as a punishment for homosexuality, and men having the right to "sex slaves," Glenn explained.

Rep. Omar is the keynote speaker at a CAIR event on March 23 in Los Angeles and will be joined by Hassan Shibly, who claims Hezbollah and Hamas are not terrorist organizations, and Hussam Ayloush, who is known for referring to U.S. armed forces as radical terrorists.

Watch the clip below for more:


This article provided courtesy of TheBlaze.

The roots of AOC

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It wasn't too long ago that Blanca thought it was all over.

Born in Puerto Rico, Blanca lived in New York most of her life. Recently, a reporter from the Daily Mail sent a reporter to interview Blanca. When the reporter arrived, Blanca was calmly sculpting wood in the front yard of her modest, 860-square-foot home down the street from a cemetery. Occasionally, a drug deal takes place out front, and the house is crumbling in parts, but Blanca has been fixing it up since she moved in a couple years ago, and this is home.

Reading the article, you can feel the writer's surprise, you can feel an unsuspecting writer being wrapped in Blanca's story.

RELATED: We are all now dumber for what Alexandria Ocasio-Cortez had to say

By day, Blanca works for the Lake County School District as a clerical assistant.

This is a story about mothers.

Blanca is a woman who makes lasagna for visiting relatives and watches over her 78-year-old mother, "who suffers from pulmonary fibrosis and often breathes oxygen from a concentrator, and a loud rescue mutt named Tammy."

This is a story about daughters.

Because Blanca always believed in her daughter. Believed her daughter would be important. And, regardless of your opinion on her daughter—and, believe me, you have an opinion about her daughter, because everybody has an opinion about her daughter—there's no denying the wholesomeness of this story, so hear me out.

"Her dad and I were preparing for Alexandria's birth and still picking names," Blanca told the reporter. "And he came up with 'Alexandria.' I thought about it for a while and I said: 'Alexandria Ocasio-Cortez. That sounds very powerful. That'll be her name.'"

Yes, that Alexandria Ocasio-Cortez, the infamous millennial Democratic Socialist who represents New York's 14th district (covering the Bronx and Queens) in the House of Representatives.

And her mother is Blanca Ocasio-Cortez.

Blanca married Sergio Ocasio in Puerto Rico, then moved to New York. She knew very little English, but she learned. She worked the jobs nobody else wanted. She mopped floors at night, she drove school buses, she answered phones, took orders.

In 1989, she gave birth to her first child, a girl, in The Bronx, New York City. Two years later, she gave birth to a boy.

Until Alexandria was five, the family lived in a one-bedroom condo in the Parkchester neighborhood of the Bronx.

Theirs was an American struggle.

Theirs was an American struggle. Sergio worked hard until he had his own business, and the small family pooled together their resources and took out a mortgage, and moved into "a small single-family house with a yard in nearby Yorktown Heights."

"We had a great life there," Blanca said. "Alexandria was very social, so she always had a bunch of girls over. She took over the shed in the backyard. She cleaned it up, put up curtains and photos and made it look nice, and that was like a clubhouse for her and her friends."

Blanca talks about her daughter the way any good mother does, recalling that her daughter was always talkative.

"When I took her to her pre-K interview, she didn't let me talk much. She was going on and on about knowing the alphabet and being able to count."

In 2008, while Alexandria Ocasio-Cortez was a sophomore at Boston University, her father, Blanca's husband, died of lung cancer.

Overnight, Blanca had to become the breadwinner.

I was cleaning houses in the morning and working as a secretary at a hospital in the afternoon... it was still difficult making ends meet. At one point, I was skipping mortgage payments and we almost lost the house.

This is a story about a single mother who raised her family after her husband died of lung cancer.

As the Daily Mail notes:

Sergio's death put the family into a tailspin. He had no life insurance, two years of health care bills due and the money his business brought in dried out. Blanca recalls she faced foreclosure not just once, but twice.

"It was scary," Blanca told the reporter. "I had to take medicine I was so scared. I had to stop paying for the mortgage for almost a year. I was expecting someone knocking on the door to kick me out at any time. There were even real estate people coming around to take photos of the house for when it was going to be auctioned. The worst is that I only had $50,000 left to pay on the loan."

Funny enough, it was the bank, not the welfare office or the local church that helped her.

Blanca worked from 6am until 11pm.

And I prayed and prayed, and things worked out. After the children graduated from college, I figured it was time for me to move to Florida.

These days, Blanca lives in Eustis, Florida, a lakefront community of about 16,000 people near Orlando. She moved here just before Christmas in 2016. She'd been paying $10,000 a year in real estate taxes in New York. Now, she pays $600 a year.

When she first got here, the world, her world was much different. Her daughter was a bartender in New York and hadn't filed paperwork to become a Representative.

Really, though, this is a story about what it means to live in America.

"I love privacy and calm," Blanca said. "I don't like the limelight for myself and my family. But it seems that God played quite a joke on me with this politics stuff."

The Daily Mail sent reporter Jose Lambiet, presumably to do a hatchet job. The story is tempting: taxes are so severe in New York that even the mother of the wild-eyed Democratic Socialist representing that area can't even afford to live there. Really, though, this is a story about what it means to live in America.

And while liberal media has paraded the story around with that smug look on their faces, so have conservative outlets, and in both cases they've missed the real story. The human story. The story of all of us. Because Blanca is an American, same as you and me.