A radical economic theory keeps gaining converts
That’s so sad, but notwithstanding recent innovations, American economy recovery is still low. So there’s no wonder we hear loud calls for the US government to take urgent relief measures. Many financial analysts state that today’s monetary policy’s running out of ammunition. The major focus is currently shifting to fiscal policy.
After the 2008 downtime, America drastically loosened the purse strings. The number one world economy posted an apparent deficit of more than ten percent of GDP the next year.
The gap is expected widen further in the next decade, because retiring baby-boomers keep choking the government with high social security as well as health-care costs. Undoubtedly, that’s one of the most dangerous financial risks of the country.
Meanwhile, at least one presidential candidate in the US is trying to listen to MMT economists. That’s Bernie Sanders, who has already promised huge investments in education, health and infrastructure. Sanders isn’t interested in the economic theory. He’s just giving an emphasis to the necessity of rebuilding the middle class, increasing wages and making sure America no longer has one of the highest poverty rates of all developed countries. Is it a hint at the upcoming belt tightening? Time will show, of course.