kelton

https://youtu.be/ls8EBaqFlUo

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So I want to start first of all with medicare-for-all because it's gotten a lot of attention including in the Democratic debates

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How much would it cost because I see different estimates. I've seen one coming out of Bernie Sanders campaign

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That's about thirteen point six trillion. Then it goes up from there. How much do you think it would cost?

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Well, I think we have good estimates

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The question is over what period of time?

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So we know that we're already spending in excess of three trillion dollars a year on health care

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So sometimes you hear numbers like thirty trillion. It sounds like an enormous sum of money, of course

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We're already spending more than that, and we're on track to spend more than those projections have us spending under a medicare-for-all system

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So sometimes people look at it on a 10 year horizon. Sometimes people talk about it on an annual basis

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I think the important point to make though

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Is that what we would be projected to spend if we were to transition away from the bloated inefficient?

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Bureaucratic system that we have today to a leaner more efficient system like Medicare for all that. We will be spending less as a

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Society on health care and we'll end up getting more coverage

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Everyone will be covered and we'll expand the types of coverage that people get so they'll have mental health coverage

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They'll have dental they'll have vision they'll have long-term care. So give us some estimate of that right now

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We're about 18% of GDP on health care, right?

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Okay, once it was fully implemented Medicare for all what percentage of GDP would be represented by health care

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It's it's impossible to know exactly what we do know, is that the next closest country to where we are today?

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spends about 10 or 11

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percent of

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GDP so we may not get there and I'm not sure we would want to because we're talking about expanding care to include things like

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I mentioned like long term care and dental and vision

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so we're beefing up the coverage that we're offering and that might get us to something that looks more like

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15 or 16 percent of GDP. It's impossible to know until we end up

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Actually spending the money and we find out how much of our national

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resources we're gonna turn over to health care and if you think about it in a sense what better way to use national

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Resources then caring for our health and well-being

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so, let's assume that it gets down from 18 percent to

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Pick a number 15 percent 14 percent something like that

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All of that 14 percent would be coming from the federal government because it would be Medicare for all

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Not be the private sector paying into that. Where does the federal government fund that?

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Well, it funds it the way it funds everything else

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So, you know people ask these questions about how the government is going to end up paying for whether its infrastructure investment or healthcare

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There's really only one way that the federal government pays for anything at the end of the day

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The federal government pays for everything by instructing the Federal Reserve to clear the payments that Congress has authorized so clancer

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Is that Congress will authorize the spending and it will take place so that the government is paying the tab?

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Rather than the rest of us in the form of co-pays deductibles and premiums

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I assume there are prints of two principal sources of revenues one is texts of taxes and the other is now revenues is borrowing

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Basically, so how much would come from increased taxes and how much we come from increased borrowing?

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I think the the thing is with Medicare for all is that as we talked about just now we're going to end up using

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fewer national resources to deliver health care for everyone

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so if you think about it Medicare for all actually works like a tax cut for 95 percent of the American people why because

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You're going to end up spending on average about

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$3,000 a year less than you're spending today. That's $3,000 that stays in your pocket

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It has the same sort of economic effect as if someone cut your taxes and left you with $3,000 more years

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So Medicare for all really does work like a tax cut

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So if that's right that those savings for the entire country have to come from someplace. Somebody has to get less money

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Doctors or insurance companies somebody has to get less money. So who's getting less money? Where does that say me?

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Well, most of its coming out of the middleman, right? That's where so much of the overspending takes place today

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It's because we have this additional layer someone is standing between you and the person on the other end of your health care

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Right and that that middleman is taking enormous

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chunks of money tens in tens of billions of dollars annually that you're paying in the form of

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premiums co-pays deductibles

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That are being peeled off by the intermediaries by the health insurance companies by the pharmaceutical companies

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So when you bring down health care costs and you start paying less not just for the care itself

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But also for the prescription medications that all accounts for much of the saving

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So I said earlier Bloomberg News has called you

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I think the the public face of

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Modern monetary theory as you described the health care the Medicare for all it has nothing to do with modern. No

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No, it doesn't won't be borrowing more money. Well, it doesn't have anything to do with modern monetary theory because we're just talking about a

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Policy proposal that asks, how do we transition away from?

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Making the payments the way we make them today to a more efficient system where we make smaller payments in the future

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but as I understand modern monetary theory and I don't understand the way you do it basically says a

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Country that has the reserve currency for the world doesn't have to worry as much about borrowing more more funds. Is that there?

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Mm, I'd say it's pretty close. It's not bad

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It doesn't mean you don't have to be the reserve currency

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Issuer in order to be liberated from some of the kinds of constraints that households in private businesses face

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It gives you an extra degree of freedom to be the United States of America and to have the reserve currency

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but other countries have the capacity to

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run their budgets in

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The interest of their people rather than running their budgets the way a household or a private business is required to run them

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But if in fact you can borrow money

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Rather than raising it from things like taxes under that doesn't that affect investment in the country as a practical matter

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Well when the go so let's if you want to break it down into a little bit of mmt here

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So when the government borrows remember that it's not

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Crowding out some other form of spending when the government engages in borrowing because it's run a deficit. Let's say the government

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Let's just use some easy numbers spends $100 into the economy

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Taxes $90 back out. It leaves $10 somewhere in the economy. And we say the government has run a deficit

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We write a minus 10 on their ledger, but we forget that the government's deficit has placed $10 somewhere in the economy

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Now the government comes along and says I'd like to take that $10 out

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I'll swap it for a US Treasury and we label that borrowing and it's a really unfortunate

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term that we use because the money to buy the

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Bonds comes from the prior deficit spending. So

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There's a lot that we get wrong in these conversations

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About bar because we liken it to what households do when they borrow money house wants borrow money

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They don't have the federal government borrows back money that hit deposits through its budget deficit

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But isn't it competing with private enterprise corporations and the capital markets to borrow money? I mean no

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It's providing the funding first and then swapping the dollars out for US Treasuries

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Which at least right now still pay a little bit of positive yield

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That's not the case as you well know for much of the world right now

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Fascinating so so as you advise senator Sanders on his campaign, what are the major?

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elements of a Sanders economy as president Sanders

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We've talked about health care Medicare for all what are the other major component that he says this will change the lives of everyday Americans

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Well, you know, this is a man who has spent his entire

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Career fighting on behalf of working people and so his deep concern

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His heart is with the working men and women of this country

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And so he talks about things like good jobs good-paying jobs raising the minimum wage

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He's been talking about inequality for decades before it was pooled to talk about the problems associated with

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increasing concentrations of wealth and income and so he talks about ways to

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Address this this gulf between the people at the very top and everyone else in our society

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Rebuilding unions again part of strengthening worker bargaining power. He talks about the problem of college affordability

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How is it that we have a generation of people today who are finding it harder and harder to pay for college

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Education leaving with record mounting student loan debt 1.6 trillion in outstanding student loan debt

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He's talking about canceling all 1.6 trillion. And of course I can go on and on but those are some of the bigger things