Alexandria Ocasio-Cortez says the theory that deficit spending is good for the economy should 'absolutely' be part of the conversation
- Rep. Alexandria Ocasio-Cortez has received one question more than any other: How will she pay for her ambitious policy proposals?
- The newly sworn-in lawmaker told INSIDER that there are many ways to come up with the funding, including cutting back on military spending, raising taxes on the wealthiest Americans, and deficit spending.
- Ocasio-Cortez also said that modern monetary theory, which holds that the government doesn't need to balance the budget and that budget surpluses actually hurt the economy, "absolutely ... needs to be a larger part of our conversation."
Rep. Alexandria Ocasio-Cortez has received one question more than any other during her short time in the political spotlight: How will she pay for her ambitious policy proposals?
The newly sworn-in lawmaker has largely shied from specifics. And she called the question itself "very disingenuous" in a recent interview with INSIDER, arguing that critics don't ask the question when it comes to defense spending.
"It's not a question that is evenly applied across issues, and it's one that I actually don't think people genuinely are interested in," she said. "It's a question that is only targeted to healthcare and education expenditures."
She argues there are myriad ways to fund free college, Medicare for All, a federal jobs guarantee, and the other bold policies she and other progressive Democrats have proposed.
"You can pay for it by saving costs on expenditures that we're already doing," she said. "We can do it by saving money on military spending. We can pay for it by raising taxes on the very rich. We can pay for it with a transaction tax. We can pay for it with deficit spending."
"You recognize that people still ask the question as though I didn't just answer it," she told INSIDER. "Because it's not an interest in the actual answer. It's an interest in the attack and it's an interest in debasing the agenda."
She said she's open to modern monetary theory, a burgeoning theory among some economists positing that the federal debt is not an economic restraint for the US. She said the idea, which holds that the government doesn't need to balance the budget and that budget surpluses actually hurt the economy, "absolutely ... needs to be a larger part of our conversation."
Ocasio-Cortez staked out a more concrete position last week when she told "60 Minutes" that she supports taxing super-wealthy incomes - those above $10 million - at a 60-70% rate to boost government revenue.
The comment generated outrage among conservatives, who characterized the proposal as radical, and received widespread support among progressive economists.
Many supporters pointed out that the US maintained a similarly high marginal tax rate on the ultra-rich for nearly four decades after World War II, which included the most economically prosperous period in the country's history.
Nobel Prize-winning economist Paul Krugman argued in a Sunday New York Times op-ed that Ocasio-Cortez's proposal is "fully in line with serious economic research," pointing out that a host of leading economists believe the optimal top tax rate in the US is between 73% and more than 80%.
President Donald Trump and the GOP lowered the top tax rate to 37% from 39.6% as part of their 2017 tax bill.