CP - Deficits - Michigan 7 2023 STARTER

1NC
Deficit spending and smart usage of MMT solves without taxation.
Santens '21 [Scott; "Why We Need Modern Monetary Theory (MMT) and Why It Needs Universal Basic Income (UBI);" https://vocal.media/theSwamp/why-we-need-modern-monetary-theory-mmt-and-why-it-needs-universal-basic-income-ubi]
In the beginning, man said, Let there be money: and there was money. Centuries later, on March 27, 2020, the United States passed into law the Coronavirus Aid, Relief, and Economic Security Act and with the stroke of a pen, over $2 trillion was spent without first taxing or borrowing from anyone. It included $1,200 stimulus checks for adults and $500 for kids. Another $900 billion was spent without first taxing or borrowing from anyone nine months later as the Consolidated Appropriations Act. It included $600 stimulus checks per adult and kid. Another $1.9 trillion was spent without first taxing or borrowing from anyone another three months later when a third stimulus check went out thanks to the American Rescue Plan Act, this one for $1,400 per adult and kid. It was followed in July by the first of six monthly payments of $250 to $300 more per kid. All told, within one year, $1 trillion in cash was sent directly to the bank accounts and mailboxes of about 85% of Americans, no strings attached.
We didn’t "pay for" any of this. We just did it. None of it was made possible by taxing or borrowing from anyone first, and that’s the big lesson I believe everyone needs to take away from the COVID-19 pandemic besides the effectiveness of direct cash payments and dangers of politicizing science and public health. Americans needed money, so it was created out of nothing. The thing is, that’s not new. It’s how money works in any country that issues its own currency.
Here’s the now less secret truth: the US government is not funded by taxes. It creates its own currency out of nothing. It spends it into existence. Taxes then remove money from the money supply to maintain its value (among other things). For the cryptocurrency enthusiasts out there, the US dollar utilizes a mint and burn model. The eater address is the IRS.
In other words, yes there is in fact a "magical money tree." All money is a human invention and there is in fact no limit to the amount of money that can be created. There is however a limit at any point in time to the goods and services that can be exchanged for money at that point in time, and that real and always changing limit depends entirely on the amount of natural resources, human labor, machine labor, knowledge, skills, time, energy, etc. that is available to meet demand with supply at that point in time. That’s what really matters - what money is meant to measure - not money itself. Money is only a human construct created to very roughly measure the stuff it’s traded for, and taxation is important for a multitude of reasons, but making spending possible by a currency issuing government just isn’t one of them. This is the heart of what’s come to be known as Modern Monetary Theory (or MMT).
Conventional thinking says that the US government first needs to obtain money from taxes or borrowing in order to spend it. MMT says that the government first spends money, then it taxes or borrows money to remove it from circulation. That may seem like a somewhat silly difference, but I’ve come to believe it’s actually an extremely important one, and one that once adopted, is the most likely path to a better future that includes a truly Universal Basic Income — like Alaska's annual dividend but monthly and larger — that’s the highest it can be without surpassing inflation targets.
I’ve never been against MMT as a descriptive theory, but for years I’ve just seen it as an alternative way of looking at federal spending and taxes, but having just lived through the year 2020, and having read Stephanie Kelton’s book The Deficit Myth, I've come to believe MMT may just be the key to achieving UBI, and perhaps even the only way.
Solvency
Solves – GND
Deficit spending can fund the Green New Deal.
Horsley '19 [Scott; 7/17/2019; "This Economic Theory Could Be Used To Pay For The Green New Deal;" https://www.npr.org/2019/07/17/742255158/this-economic-theory-could-be-used-to-pay-for-the-green-new-deal]
When Rep. Alexandria Ocasio-Cortez rolled out her "Green New Deal," calling for clean energy, universal health care and guaranteed jobs, one of the first questions she got was: How do you plan to pay for it?
The New York Democrat argued that ambitious programs can easily be financed through deficit spending.
"I think the first thing that we need to do is kind of break the mistaken idea that taxes pay for 100% of government expenditure," Ocasio-Cortez told NPR's Morning Edition in February.
In doing so, she shined a spotlight on a once-obscure brand of economics known as "modern monetary theory," or MMT.
"There was something of an Oprah effect when she did that," said economist Stephanie Kelton of Stony Brook University. "People immediately probably started Googling 'modern monetary theory' to find out what she was referring to."
Run that Google search and you'll quickly find Kelton herself. The economist, who advised Bernie Sanders' 2016 campaign, is one of the best-known evangelists for the theory. Kelton says paying for big government programs is the easy part. If Congress has the will, the Federal Reserve can effectively print the money.
"If Congress authorizes a few billion dollars of additional spending, or a few hundred billion dollars, then the Fed's job is to make sure that those checks don't bounce," Kelton told NPR.
A central element of MMT is that governments that control their own currency — like the United States — don't have to worry about spending more than they collect in taxes. They can always create more money. But despite the caricature sometimes offered by both the theory's critics and supporters, Kelton insists that's not a blank check for unlimited government spending.
"Too often, people get a whiff of MMT, they don't read the literature, and they somehow arrive at the takeaway that MMT is about printing prosperity," Kelton said. "And of course when people hear printing money, they go straight to Zimbabwe or Weimar Germany."
Those are notorious cases of hyperinflation. But Kelton argues that runaway prices are only a danger when demand outstrips the real resources in an economy — the people, machines and raw materials. If there's idle capacity, MMT maintains that additional government spending does not trigger inflation.
Last week, under questioning from Ocasio-Cortez, Federal Reserve Chairman Jerome Powell acknowledged that the U.S. job market has shown more capacity to grow without sparking inflation than he and his colleagues had expected. Still, Powell is no fan of MMT.
"The idea that deficits don't matter for countries that can borrow in their own currency, I think, is just wrong," he told a Senate hearing in February. "We're going to have to either spend less or raise more revenue."
Solves – Job Guarantee
We can just print money to lock in job guarantees.
Epstein '20 - @TorrensUni masters student [Jeff; 9/1/20; "WHAT IS THE MMT-DESIGNED JOB GUARANTEE? (WITH SOURCES);" https://activistmmt.org/job-guarantee/]
The MMT-designed job guarantee
The MMT-designed job guarantee (MMT-JG or just “JG”) is a guaranteed opportunity for a job in your local community at a living wage-benefit.
The word guarantee is used in the sense of the public library or school systems: all are allowed to enter and take advantage of its services, as long as rules are followed and performance is acceptable. If these conditions are not met, that person may face discipline. If the negative behavior persists, they may be temporarily ejected and, in extreme cases, permanently ejected. Just as with a troubled child in your own family, you do the best you can to make it work. You provide help and guidance, training, therapy, and other accommodations. You don’t just kick them to the street. In the context of the job guarantee, in extreme cases, opportunities may be provided to, for example, work in isolation or remotely (Wray 1997, pg. 15, item 4).
A primary goal of job guarantee jobs is caring (Tcherneva JG-FAQ, questions 8 and 8a): caring for people in your community, caring for the community as a whole, and caring for the environment. These jobs are valuable but not profitable. Among other reasons, this is why JG jobs do not conflict with any existing job in the private (for-profit) or public (government) sectors.
The MMT-JG proposal “favors a fixed living wage with basic benefits, as opposed to tiered wages” (Tcherneva 2020, p. 89), currently proposed to be $15 an hour (plus benefits including healthcare, on-the-job training, and childcare). This means the MMT-JG wage is an unchanging “minimum wage floor” (ibid). Regardless how long they have been in the program, every JG worker in the nation is paid the same rate – there are no raises. Private sector businesses can, and are encouraged to, offer a marginally-higher wage in order to attract workers out of the JG program. This is another way in which the JG does not compete with existing jobs in the private or public sectors.
(The wage floor is also why it is not possible for the MMT-JG to cause a wage-price spiral, which is a form of cost-push inflation. In addition, because the federal government funds job-guarantee wages only for those who are currently employed in the JG program*, and only until that worker [chooses!] to leave the program, the MMT-JG program is perfectly funded by definition. Because of this, it is also not possible for the MMT-JG to cause demand-pull inflation. Further, since the funding is non-discretionary, it is not vulnerable to elimination or reduction from periodic political bickering, such as related to the budget or debt ceiling. Although there can still be inflation in the economy, it is not possible for it to be caused by the MMT-JG.)
(*Plus a small markup for administration purposes.)
A critical difference between the job guarantee and our current system (one with no JG) is that when workers lose their job, they often have no choice but to go home and do nothing. Among its other horrific effects (Tcherneva 2017), extended unemployment causes skills and experience to wane and wither, social connections to decay, and options overall to become more and more limited. Since your bills (and the for-profit companies they’re owed to!) don’t care if you have a job or not, it also means that your savings will decrease and credit card balances increase. In addition, for-profit businesses prefer to hire workers with skills and experience over those without. So, those who end up unemployed often become a permanent member of the reserve army of the unemployed. Those who still have a job fear themselves falling into that terrible position, and are therefore less likely to demand better wages or working conditions.
The MMT-JG program prevents this situation by serving as a “transition job.” It gives the unemployed somewhere to go. Once settled into a JG job, workers can maintain their skills and experience (and pay their bills!) until they are ready to return to the private sector, or the private sector is ready to offer them a more attractive position.
Solves – Social Security
The plan pays for social security through taxes, we pay for it with deficits.
Petcher '20 [Kerry; 7/16/20; "Where Does the Fed Get Its Trillions? Ask MMT," https://retirementincomejournal.com/article/another-big-moment-for-mmt/]
MMT and Social Security
Given its applicability in financial crises, MMT has generated a lot of media attention relative to its size. All of its leading figures—Warren Mosler, Randall Wray, Bill Mitchell, Stephanie Kelton, Pavlina Tcherneva, and Scott Fullwiler—could fit around a large dinner table.
And while they don’t lack for important academic predecessors—Keynes, certainly, Wynne Godley and Hyman Minsky, whose “financial instability hypothesis” was rediscovered in the Great Recession and gave impetus to MMT—the nation’s most influential economics departments have not been hospitable to economists specializing in MMT.
You won’t find MMT economists on the faculties of the biggest and most prestigious universities. They teach at fine schools like Bard College, the University of Missouri at Kansas City, the State University of New York, but not at the University of Chicago, Harvard, or MIT, whose graduates will someday set policy in Washington and on Wall Street.
Social Security, which will technically run short of money between now and 2034, might turn out to be a test case for MMT. In the conventional view, Social Security is a zero-sum game between America’s tax-paying workers and the rising number of retirees their payroll taxes support. It’s assumed that unless payroll taxes go up or benefits go down, the system will fail to fulfill its promises.
On the topic of retirement income, I asked Kelton for her thoughts on the Social Security funding dilemma. She doesn’t see it as a crisis. If Congress can’t agree to lift the cap on the earnings subject to FICA taxes, she told me, it could cover the impending Social Security funding shortfall with an appropriation from general funds—the way it currently pays for most of the costs of Medicare Part D. Social Security doesn’t face an actual funding crisis, she said, “but if everybody agrees to keep up that fiction, I don’t know who will win.”
Solves – UBI
MMT is necessary to actualize a UBI
Santens '21 [Scott; "Why We Need Modern Monetary Theory (MMT) and Why It Needs Universal Basic Income (UBI);" https://vocal.media/theSwamp/why-we-need-modern-monetary-theory-mmt-and-why-it-needs-universal-basic-income-ubi]
Conclusion
Having now lived through the novel coronavirus pandemic, and having witnessed with my own eyes the politics of what was made possible in response, and what was still not considered possible even at the height of Great Depression levels of mass unemployment, I have come to the following conclusion: UBI in the form of a fully universal payment to all Americans is unlikely to ever happen without MMT logic gaining sufficient influence among policymakers. Why do I say this? Because even in a time of national emergency, and even when the most money was ever spent, there remained an insistence on targeting. Full universality was still unattainable because of a belief that only those “in need” should get a stimulus check, even when we knew that definitions of need were utilizing old tax returns that were no longer relevant in 2020. People just couldn’t wrap their heads around the fact that targeting could be achieved on the back end via taxes. Pay people first. Tax them last. Taxation achieves the desired targeting by removing money ex post instead of ex ante. But we didn't do that because there was still a concern about the price tag of the legislation and keeping it as small as possible on the front end.
MMT is a pivotal mindset shift by looking at taxation differently. With MMT, taxation goes from being the source of funding to being the tool to accomplish certain goals like inflation management, inequality reduction, and incentive shifting. It means going from an additive mindset to a subtractive one. It’s like the difference between filling a hole with one shovel full of dirt at a time, or dumping a pile of dirt into that same hole followed by bulldozing away the excess. Taxation is about avoiding the excess of dirt after the hole is full, not about figuring out just the right amount of dirt to put into the hole in the first place.
Understanding UBI is helped by using this same subtractive mindset. Everyone gets money, and then money is deleted for some more than others via taxes. Because taxes aren’t about funding, and are instead about shaping the outcome of the policy, the focus shifts from how to pay for UBI to how to best shape the UBI. The type and amount of taxes used in combination with the level of UBI determines who is and isn’t a net recipient of UBI after taxes. Instead of deciding who should and shouldn’t get income using an inefficient and error-prone means-test, the combination of UBI and taxes makes those with lower incomes into net recipients who receive more in UBI than they pay in total taxes, while making those with higher incomes pay more in total taxes than they receive in UBI.
Targeting does nothing but create unnecessary bureaucracy, holes for people in need to fall through, damaging stigma and distrust, and excessive marginal tax rates. Pay 'em all and let taxes sort 'em out. Utilizing taxation as a tool of targeting through subtraction opens up all kinds of new additional benefits. Carbon taxes go from “paying for” UBI to reducing inflation plus also reducing greenhouse gas emissions. Value-added taxes and automated universal transaction taxes go from “paying for” UBI to reducing inflation plus also clawing back the UBI from those doing the most consuming plus also incentivizing savings and investment over consumption. Land-value taxes go from “paying for” UBI to reducing inflation and wealth inequality plus also incentivizing housing development and disincentivizing idle land speculation. Intellectual property fees go from “paying for” UBI to reducing inflation plus also disincentivizing patent trolling and incentivizing a larger public domain. Etc. As soon as we start thinking about taxes as a tool of erasing money and disincentivizing specific choices, a lot of tax options make a lot more sense, while other tax options like taxing income make a lot less sense.
With MMT, the question changes from “How do we pay for it?” to “We’ve decided this is important and we have the resources to do it, so we’re doing it, but what’s the best mix of ways to make the best most efficient use of our resources to achieve the best outcomes doing it?” We have to stop thinking about what something costs at the federal level. If it’s important and we can do it, then we should do it, and then manage the economy around that, around us, because that’s the entire point of the economy, to work for us. We are at the center, so it should serve us, not the other way around. The limits of what we can actually do are determined by our actual physical capacity to do it, not by some construct we call money.
To me, this kind of mindset shift opens the door to a new kind of economy, a human-centered economy, a resource-based economy, where we start asking deeper questions about what the point of all of this is in the first place. What’s the point of money? Why did we develop all of this technology in the first place? Shouldn’t the economy we create together work for all of us, and shouldn’t it be engineered in a way that maximizes human wellbeing and minimizes our negative impacts on the ecosystem that makes all human life possible? And shouldn't all of it be built on a foundation of human rights that secures freedom and dignity for all?
In conclusion, I propose we need MMT and UBI, and also MMT and UBI need each other. MMT needs UBI to achieve the best use of available resources with the most optimal outcomes, and UBI needs MMT in order to achieve full universality, and in order to move from questions about affordability to questions of optimal tax design. Without UBI, MMT’s reliance on FJG alone will reduce total potential productivity by suboptimal allocation of resources and inferior amounts of demand and intrinsic motivation. Without MMT, UBI seems less likely to be viewed as a stigma-free right and more likely to be limited to implementations like the stimulus checks that include means-testing and thus all the problems that go along with non-universality.
AT: Perms
AT: P DB
Perm links to the IRS DA.
Toder '2000 [Eric; "Tax Cuts or Spending - Does it Make a Difference;" Urban Institute; https://www.urban.org/sites/default/files/publication/63871/410261-Tax-Cuts-or-Spending-Does-it-Make-a-Difference-.pdf]
While a tax expenditure can 

Preview shortened. Download the file for the full document.