“It’s gone. It’s gone, It’s gone!” Wild cheering as Spendy trots round the bases and touches home.

The fans go nuts.

Teammates pour out of the dugout.

High fives and back slapping all around.

Then suddenly the stadium lights flash.

A siren screams.

The announcer, shaking his head, intones mournfully, “Umps declare austerity. Baseball is all out of runs.”

Stunned silence.

The score flips back to 2 to 2.

Wait a second.

Baseball can’t run out of home runs.

It’s just scoring, a way to keep track, bookkeeping.

Well, that’s all money is — a way to record who owes what to whom.

Money, in all its gore and all its glory, is no more significant and no more substantial than a home run, a field goal or a service winner.

I know this is hard to take.

It caught me up short, too.

Like you, I know that money keeps food on the table, gas in the car, inventory on the shelves, the lights on in City Hall.

But really what is money?

Can it do all this and be nothing too?


Therein lies the problem.

Therein lies the solution.

Folktales and common sense tell us that money has substance. That there is a there there. But there’s not.

How much commerce in the United States actually happens with green pieces of paper?

Think about it.

We’ve got a $16 trillion GDP. (That’s $16,000,000,000,000). But only seven percent of the transactions comprising GDP are conducted in old-fashioned money.

The other 93 percent take place when clerks — in banks, corporations or government offices — type on keyboards like the one I’m typing on right now.

This is modern money.

Workers don’t line up at the payroll office each week to collect their Franklins, Jacksons and dimes.

Health insurers don’t dispatch Brinks’ trucks to settle up with hospitals and docs.

Electronic clicks pay GM’s utility bills, Microsoft’s programmers, and Boeing’s engineers.


Computers subtract clicks from your account.


Computers add clicks to your account.

That’s all money is: plus clicks and minus clicks.

The simple truth, despite all the serious people who want you to believe otherwise, is that the U.S. government can no more run out of dollars (clicks) than baseball can exhaust the supply of home runs.

That’s because U.S. Treasury clicks call spendable funds into existence.

Click, click, click.

There’s $900 billion for defense.

Click again and there’s $50 billion for nutrition support.

A few more clicks and presto, K-12 and higher ed. are fully funded.

Since 2007 (the start of the Great Recession), the states that are prohibited from borrowing to cover current spending) have collectively cut over $540 billion from their budgets.

This year they’ll cut another $55 billion. There’s no reason why the Treasury can’t or shouldn’t step in with enough firepower to bring state spending back to 2008 levels.

The sky won’t fall. The world won’t end.

Worried about the resulting deficits?

Chill. They’re just clicks too. Don’t twig out.

U.S. interest rates are not about to go through the roof.

In fact, just last week the yield on treasuries, after accounting for inflation, went negative.

That’s right, the rest of the world is willing to pay for the privilege of lending to us.

What else could they do?

Can you think of a single entity with huge piles of assets (positive clicks) that would be willing to park those assets in euros, yen or pesos?

At least for the time being, U.S. deficits have to exist … if only to provide a safe haven for all the world’s clicks.

The United States is the only entity that can legally create dollars.

We are “sovereign in our own currency.”

Our government spends dollars, borrows dollars and pays interest in dollars.

That’s why we can’t run out of them.

This isn’t true for Greece, Spain or Mexico: in the former borrowing is in euros which those governments don’t control, and the latter’s economy is way too small.

“Susan, you’ve gone off the deep end now. If we just print money (OK, just make clicks), inflation will wipe us out.”


That’s not going to happen either.

For four long years we’ve watched the monetary authorities work to click-start the economy by pumping up bank reserves.

Loanable funds (excess reserves) have exploded but because we are in such a deep recession — don’t forget the 20 odd million who can’t find full-time work — pumping up the monetary base hasn’t and won’t cause prices to surge.

The facts are clear. The U.S. is borrowing at near zero interest rates. Inflation is about as low as it can go.

So why do politicians and pundits scream austerity?

Two simple reasons: ignorance and power.

They flat out don’t understand modern money.

There is no there there. Just clicks, and these are no more a burden on future generations than are the home runs your team didn’t hit.

Obstacles to federal spending like deficit ceilings or congressional roadblocks are self-inflicted constraints that have nothing whatsoever to do with our current or future ability to produce real goods and services.

The only constraint on what we can afford, now or in the future, are the actually existing stores of labor, capital, technology and raw materials — real resources — we have available.

Today’s financial arrangements (i.e., debts incurred in our own currency) do not and cannot in themselves impair future production possibilities. We do no harm to future generations or reduce what they can produce and afford so long as we don’t destroy, waste or needlessly deplete resources available to us now. This is the key to curing ADHD — America’s Deficit Hysteria Disorder.

This knowledge lays bare the deliberate obfuscation conservatives use to justify the austerity policies that damage ordinary people.

The “middle class” isn’t a range of annual incomes, a set of professions or a group of zip codes.

It’s American shorthand for the life, liberty and happiness that rest on economic security.

When a nation’s citizens have some surety that public and private necessities are forthcoming — when they know that neither illness nor recession will leave them scrambling for their next meal or force them to shut the school house doors — they can live middle class lives.

They’ll buy homes, participate in civic life, educate their children, read newspapers and even — gasp — retire!

Baseball can only run out of runs if officials cock up the rules. Disregard malevolent deficit bashing.

We can afford to provide decent retirements, life-enhancing health care, and opportunity-expanding education to all our citizens, now.

Debt-phobic austerity policies are what actually diminish future possibilities. Mighty Spendy’s batting for our team. He won’t strike out.

Susan Feiner is a professor of economics and of women and gender studies at the University of Southern Maine.


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