CHRISTIANSTED, U.S. Virgin Islands — Warren Mosler is a card-carrying member of the 1 percent. The deeply tanned, tennis-lean hedge fund executive lives on this Caribbean island for tax reasons.
But his prescriptions for economic policy make him sound like a warrior for the 99 percent. When the recession hit, Mosler said, the government should have spent and spent until unemployment came down to a comfortable level. Forget saving the banks through the Troubled Asset Relief Program. Washington should have eliminated the payroll tax, given every state $500 per resident and offered a basic job to anyone who wanted one.
“There would have been no recession,” Mosler, 63, said.
Washington’s debts would have soared, of course. But Mosler sees no problem with that. A failed Senate candidate in Connecticut with unorthodox but attention-grabbing economic theories, he says he believes the United States should be running much bigger deficits and that the last thing the government needs to worry about is balancing its budget.
Mosler’s ideas, which go under the label of “modern monetary theory,” or MMT, are clearly on the fringe, drawing skeptical reactions even from many liberal Keynesian economists who agree with some of his arguments. But they have attracted a growing following, flourishing on the Internet and in a handful of academic outposts, as he and others who share his thinking have made the case that austerity budgeting in the United States and in Europe is doing irreparable harm.
Mosler has played a pivotal role in promoting the theory, and unlike many economists he has the resources to do so.