Modern Monetary Theory, or MMT, analyzes how our money system actually works. It is a myth-busting paradigm shift. Unfortunately for Hoosiers who rely on public transportation or who recognize the importance of public transportation to the growth of our state, Attorney General Todd Rokita is stuck in the myths of yesterday.
In connection with pending legislation, Senate Bill 141, Rokita opined on the nearly $56 million IndyGo receives through a federal grant: “The main source of federal revenues comes from taxes individuals or corporations pay. … Without question the character of these grant funds are that of public monies paid by individuals and corporations for the public benefit. Because the grant monies at issue are public dollars or funded by monetary charges imposed by the government on persons or property to be utilized for public purposes, they are considered taxes.” Therefore, Rokita says, IndyGo may not count federal grant money toward its obligation to raise 10% of operating funds from funding “other than fares and taxes.” This conclusion jeopardizes the operation and expansion of IndyGo services.
Compare Rokita’s analysis to this statement from “The Deficit Myth” by Stephanie Kelton: “The taxpayer, according to the conventional view, is at the center of the monetary universe because of the belief that the government has no money of its own. Therefore, the only money available to fund the government must ultimately come from people like us. MMT radically changes our understanding by recognizing that it is the currency issuer—the federal government itself—not the taxpayer, that finances all government expenditures.”
Hoosiers should explore MMT’s explanations of how our monetary system actually works and how we can be free of self-imposed myths about what we can “afford” to do. An excellent place to start is “The Deficit Myth” by Kelton, who is an economist, professor and policy advisor to the U.S. Senate Budget Committee.