While widespread confusion about the source of the American dollar continues to muddy Americans’ understanding of the national “debt” and the consequences of the federal government’s “budget deficit,” a popular HBO program could help clarify how the United States should issue its dollars to ensure the prosperity of future generations.
HBO’s “The Last of Us,” based on the video game of the same name, depicts a post-apocalyptic America devastated by a parasitic fungus that has infected most of humanity. Infected humans devolve quickly into zombie-like hosts intent on spreading the fungus through the biting of human flesh. Twenty years after the first wave of infection, FEDRA, the militaristic successor to the US government, has established quarantine zones (QZs) in former metropolitan areas like Boston, Atlanta, and Kansas City. Outside these quarantine zones, pockets of survivors live various stateless existences, sometimes independently, sometimes in roving bands, and sometimes in autonomous enclaves.
As with many fictional apocalypses, the old state-run currency has lost its value. One episode illustrates this when two girls sneak into a deserted mall and find an arcade where someone has scattered a pile of abandoned dollars on the floor. One girl refers to the paper money as “useless” as the other pries open a coin machine to produce the quarters needed to play the arcade games. Rather than dollars, the new currency is the FEDRA-issued ration ticket, which QZ denizens can earn by working for the government. In episode one, the hero Joel, played by Pedro Pascal, spends the day disposing of human bodies to earn a wad of ration tickets issued by a FEDRA officer. After receiving his tickets, Joel asks if there are more state-sanctioned jobs to perform. The officer replies, “Nothing today. Tomorrow we’ve got street sweeping or sewer maintenance.” When Joel asks which job pays more, the officer replies, “That’d be the one with the s**t.”
Proponents of Modern Monetary Theory (MMT) can immediately recognize one of the theory’s major tenets at work in these scenes. In L. Randall Wray’s 2022 book “Making Money Work for Us,” Wray emphasizes that money is a “creation of the authorities who choose a money of account and impose obligations to ‘drive’ the currency.” In general Wray and other MMT economists consider taxes to be the main obligation that drives a state-run currency, and historical examples like the “hut taxes” of colonial Africa show that to be true, but in the world of this fungal apocalypse, taxes aren’t mentioned. Rather, the ration tickets seem to be the only currency allowed to purchase resources owned by the state. Thus, the “obligation” that drives the use of ration tickets is that the militaristic regime controlling the resources will only take them as their currency. The money issued by a government that no longer exists is now worthless, except to the extent that the coinage can still be “redeemed” to play video games in an abandoned arcade.
Knowing that FEDRA ration tickets are the only viable currency, American viewers accustomed to the way their own government operates may ask why FEDRA spends so much of this currency during a time of crisis. Surely FEDRA has a budget office tracking the number of ration tickets that contribute to this government “deficit.” When that balance gets too high, surely someone is ready to put the brakes on all that ration ticket spending so the QZ economy doesn’t “overheat.” Yet when Joel asks what other jobs are available, the FEDRA officer doesn’t tell him, “Sorry, we’re in an apocalypse, and we’ve got to tighten our belts.” Why not?
Anyone with common sense knows the answer. Basically, there’s work to do. Someone has to bury the bodies. Someone has to sweep the streets. Someone has to clean the excrement out of the sewers. FEDRA knows this and uses its monopoly on the creation of ration tickets to incentivize the completion of work that must be done. It further incentivizes the completion of the more onerous work—like sewer maintenance—by paying more. Any government that issues its own currency can do this. But in our world, where media and politicians promulgate the delusion that a currency-issuer becomes “indebted” when it spends its own currency, many Americans don’t realize that if there is work to do, the federal government could, without concern for the financial cost, pay people to do it. The problem, of course, is whether the people doing that work can use that government-issued currency to buy anything. Unlike the United States, FEDRA does not use taxation to “drive” demand for its currency. Thus, the success of their entire economy depends on their ability to provide enough food, shelter, and other resources for their workers to purchase. Eventually, a lack of these resources will disincentivize the completion of any work around the QZ, regardless of how necessary it is. No taxation means QZ residents have no need to earn and save ration tickets for the future. If they can’t even use their hard-earned “money” to buy food, why work in the sewers?
And here we arrive at the main question regarding the real value of money and resources in both pre-apocalyptic and post-apocalyptic worlds. Within the Boston QZ, even though FEDRA spends its currency to create jobs, there’s little evidence of the government issuing ration tickets to increase the availability of resources. In a black-market exchange with a FEDRA guard, Joel and the guard muse that the Atlanta QZ has two factories, one for producing ammunition and one for producing pain pills. There is no mention of the productive capacity of the Boston QZ where they reside. Their access to food seems minimal, as evidenced by Joel’s consumption of jerky and 20-year-old cans of Chef Boyardee. Granted, there is one scene where a character inexplicably produces a chicken sandwich from her backpack, but mystery chicken aside, there’s no other evidence that the FEDRA government has prioritized food production for its residents. Rather, we only see the Boston QZ providing jobs involving maintenance, the violent enforcement of laws, and the disposal of bodies killed through that violent enforcement. In subsequent episodes, the show reveals individuals living alone or in self-sustaining collectives outside of FEDRA’s influence. Though these characters live outside of this currency-issuing economy, the ones with access to food and other necessary resources are obviously richer than FEDRA residents with their pockets full of ration tickets.
Economist Fadhel Kaboub frequently outlines three “structural deficiencies” that cause economies to suffer—namely, the lack of food sovereignty, the lack of energy sovereignty, and the tendency to produce low-value goods while importing high-value goods. Those three structural deficiencies interfere with the success of an economy, regardless of its access to money. Like the United States government of today, the FEDRA government creates its own money and “spends” it into existence to circulate throughout its economy. The difference between the US and the fictional FEDRA, however, is the access to the real resources Kaboub and other MMT economists believe to be necessary components of a functioning economy. At this point in history, the United States has vast tracts of land for food production and numerous methods of generating renewable energy. Our ability to produce high-value goods may have faltered with the de-industrialization and outsourcing of the last few decades, but at this time, we still have the resources needed to produce the high-value medicines, electronics, and transportation infrastructure we need to be self-sufficient. If we made it a priority, we would have the human resources to teach our children and young adults through universal preschool and public college. If we used those educational investments to train our next generation of doctors, nurses, and other medical professionals, we could even have universal healthcare like most other developed nations, many of which don’t even have the triumvirate of resources—food, energy, high-value goods—that we have as a monetarily sovereign nation.
While every libertarian fever dream features a world where corporations are free to exploit essential resources to maximize profit, we have, in fact, numerous policy choices for incentivizing and—dare we say it—regulating the industries currently monopolizing the food, energy, and other resources our society needs to thrive. And here we return to the topic of money, which is not a limited resource in either the post-apocalyptic economy of the FEDRA QZs or the pre-apocalyptic economy of the United States. Any government that issues its own sovereign, fiat currency can create money, as much as it needs. The constraint on any currency issuer is the quantity of real resources—food, energy, high-value goods and services—available to purchase with that money. Inflation can occur when the aggregate demand for resources outpaces the supply of stuff to buy. But inflation also occurs when a government sits on its hands while corporations producing necessary resources use “inflation” as an all-purpose boogeyman and pretext for keeping prices high, even after the supply has been restored.
Since the start of the COVID-19 pandemic, large-scale disruptions to global supply chains have contributed to ongoing inflation and resource shortages across the US. Targeted grants and tax breaks for sustainable food and energy production could go a long way toward mitigating future food and energy shortages, but federal funding could also allay supply-side disruptions caused by a scarcity of skilled labor. During the last few years, the US has suffered from human resource shortages in industries like education, construction, childcare, and healthcare. An investment in this human infrastructure would have a bottom-up benefit to all other industries currently suffering from other types of shortages. An increase in the number of skilled laborers able to teach children, build houses, or provide healthcare would undoubtedly increase the productive capacity of Americans who could then spend less time seeking access to scarce preschool, housing, and medical resources. Additionally, human infrastructure—like a national childcare or eldercare program—would be easier to build than physical infrastructure, considering that the main resources needed to implement such programs would be human beings willing and able to work. The only reason childcare and home health aide shortages continue to exist is not the lack of people happy to work with children or senior citizens, but rather the government’s refusal to spend its dollars on livable salaries and improved working conditions for these essential workers, whose labor allows other laborers to leave their homes and participate in the workforce.
Like the post-apocalyptic FEDRA government, the United States has inexplicably chosen not to use its currency to build productive capacity in a way that will benefit future generations. The mirage of “debt” supposedly caused by a government spending its own currency—or issuing interest-bearing bonds in its own currency—continues to shimmer before the eyes of confused Americans who earnestly believe corporate-owned politicians and their media mouthpieces when they say that the US government can run out of its own dollars. Too busy running around trying to acquire the real resources they need for survival, many Americans don’t realize the fact that the federal government’s budget constraints are not the same as their own. They believe pundits who argue that spending dollars to provide universal healthcare, education, or childcare will be “stealing” resources from future generations, completely unaware that the refusal to use those dollars to produce healthy, educated, financially stable citizens is the biggest grift a monetarily sovereign nation can pull on its people.
Our final apocalypse has not yet arrived, but many of us feel with instinctive clarity that it’s coming, maybe not during our lifetimes, but possibly the lifetimes of our children or grandchildren. Even if we can rest assured that zombies will not cause our inevitable downfall, we have no such assurance when it comes to the droughts, floods, ecological disasters, wars, and pandemics that will undoubtedly restrict our access to food, energy, and other necessities in the future. Building up our nation’s capacity to confront those future shortages—through education, care, and infrastructure—would be our best hope for survival. The dollars needed to build those resources should be an afterthought.