The Goldman Sachs technology M&A team, led by Sam Britton, has cashed in on its software focus and decades of experience to dominate 2019's biggest deals.Technologyread more
American small and medium-size companies that rely on China are scrambling to adjust their business plans in response to the escalating trade war.Traderead more
Here are the products that stand to be the most affected by China's new tariffs on $75 billion worth of U.S. goods.Marketsread more
The summit comes amid fears over a global economic slowdown, and U.S. tensions over trade allies, Iran and Russia.Politicsread more
The world's second biggest economy is past a point where it cannot ignore its enormous debt anymore, according to an analyst.China Economyread more
Carl Medlock used to work at Tesla. Now he's one of the few people in the U.S. that can fix the company's original Roadster electric vehicles.Technologyread more
Trump does have some powerful tools that would not require approval from U.S. Congress.Politicsread more
Stocks dropped after Donald Trump ordered that U.S. manufacturers find alternatives to their operations in China.US Marketsread more
As demand for lab monkeys continues to rise, U.S. scientists are reporting delays in research projects because they can't obtain enough animals, according to the National...Politicsread more
The European Union will respond in kind if the U.S. imposes tariffs on France over digital tax plan, EU chief Donald Tusk told G-7.Technologyread more
Trump said he will raise tariffs on $250 billion in Chinese goods to 30% and hike duties on another $300 billion in products to 15%.Politicsread more
Economist Stephanie Kelton, an advisor to Bernie Sanders' 2016 presidential campaign, says there's a way to run the economy to pay for liberal priorities like guaranteed government jobs for anybody who wants to work and Medicare-for-all.
Kelton subscribes to what's called Modern Monetary Theory, which posits that governments like the U.S. that can borrow in their own currencies can't run out of money. That's because money, like bonds issued to finance federal spending, is actually a government promise not a physical commodity.
"MMT is trying to build a better mousetrap," Kelton said in an interview Thursday on CNBC's "Power Lunch." She added that the $22 trillion national debt not a concern. "I'm not worried about $22 trillion in U.S. assets being held in portfolios and pensions all over the world."
At the core of MMT is jobs, said Kelton, a fellow at the Sanders Institute, a group founded by Jane O'Meara Sanders, wife of the Vermont senator who announced last month another Democratic run for the White House.
"What we would do is effectively establish a public option in the labor market. Instead of having millions and millions of people locked out of employment who actually want a way in … we would guarantee employment at a fixed wage. We would say $15 an hour," Kelton said.
She said such a system would differ from how the Federal Reserve steers the economy. The Fed uses interest rates and other tools to keep growth from overheating and causing troublesome inflation. The other part of the central bank's dual-mandate from Congress is to conduct monetary policy in such a way to maximize employment.
Kelton argues that MMT would use "full employment to fight inflation" by giving companies that want to hire a better option. "They don't have to bid wages up trying compete with one another for employed workers. They can hire from this pool, this ready-pool of skilled workers who are employed in public service jobs."
"The government's budget has to be responsive. But it's certainly not a way of you saying you get unlimited deficit spending. It controls itself as the economy goes through the business cycle," she said. "Deficits do matter. But they don't matter in the ways we've been conventionally thinking about them. The way we usually think about a deficit is that it's evidence of excessive spending. And that's just wrong. Evidence of excessive spending is inflation. So I would argue that you don't have a deficit problem, a debt problem, unless you have an inflation problem."
Appearing on CNBC with Kelton Thursday, Dan Mitchell, co-founder of the right-leaning Center for Freedom and Prosperity and a former economist for the Senate Finance Committee, disagreed with that premise.
"Whether you're part of the Modern Monetary Theory people that think you can basically finance more government with the printing press or whether you're talking about it in the sense that Stephanie is talking about it, where you just have bigger government that's supposedly going to be a perpetual motion machine for the economy, in either way I think we're at risk at best copying the economic policies of Greece, and at worst copying the economic politics of Venezuela, " Mitchell said.
Fed Chairman Jerome Powell was asked about MMT this week, during the delivery of his semiannual report to Congress. "The idea that deficits don't matter for countries that can borrow in their own currency, I think, is just wrong," he said. "U.S. debt is fairly high to the level of GDP — and much more importantly — it's growing faster than GDP, really significantly faster. He also called MMT "just wrong."
"Fundamentally, we're really debating should government be a lot bigger," Mitchell argued. "And if you want government to be a lot bigger, which I don't, then you have the challenge of how you are you paying for it. Stephanie is promoting a theory that is rather unconventional. Even a lot of left-wing economists disagree with it."
He added, "If you're going to make government a lot bigger, it's going to, in effect, divert resources from the productive sector of the economy, whether you finance it by taxes, whether you do it by borrowing, or by simply running the printing presses, figuratively speaking."