Wizard of Oz as allegory

In her book on Modern Monetary Theory Stephanie Kelton touches on the most obvious, inarguable allegory of The Wizard of Oz:

The United States is the wealthiest country in the history of the world. But even when Americans were at their poorest during the Great Depression, we managed to establish Social Security and the minimum wage, electrify rural communities, provide federal housing loans, and fund a massive jobs program. Like Dorothy and her companions in The Wizard of Oz, we need to see through the myths and remember once again that we’ve had the power all along.

The Cowardly Lion was already brave, the Tin Woodman already compassionate (not what you’d expect for someone without a heart), and the Scarecrow (despite having a head stuffed with straw) took care to think things through. In other words, the Oz friends had to learn that what held them back were “myths,” as Kelton puts it. 

The myth Kelton addresses in her book is the myth that the U.S. is deeply in debt and we must continually cut spending in order to keep from going under. I’ve found this truism of Washington politics most curious in the case of our endless wars and so-called defense spending. There never seems to be an issue about paying for that stuff. And yet the economy doesn’t crash based on profligate military budgets. 

Don’t our taxes pay for everything the government does? No, says Stephanie Kelton. Taxes don’t actually pay for the federal government. The federal government self-funds — by printing money. Also, the federal government is never in debt. Those treasury bills bearing interest, that we can read as the federal debt? They’re not really a debt. They’re a way to get people to use the money the USA creates. 

There’s a lot more to Kelton’s argument, and I’m not sure I get it all. But before I read the book I knew there was plenty of money — there is plenty of money to do everything we need to do, everything that’s really a good idea, and a lot of silly, just-for-fun things. Stephanie Kelton backs me up on that. 

The last time I wrote about Wizard as allegory was back in 2012. 

source:

The Deficit Myth: Modern Monetary Theory and the birth of the people’s economy

by Stephanie Kelton

2020. Public Affairs / Perseus Books / Hachette Book Group, New York