Why Congress will Try to Recapture Fed Payments to Banks in 2023 and Why It Can’t
Among the unmourned victims of 2022 is to be found modern monetary theory. Although it seemed clear from the start that MMT was a product of magical thinking, it engendered insouciance that kept fiscal deficits rising ever higher. Now, Republicans will press for fiscal austerity. Democrats will fight back, but they too will seek as much fiscal constraint as compatible with gaining power in 2024. Congress thus will look for new revenue sources that aren’t taxes and quickly find one at the Fed on which both sides agree: cutting payments to the nation’s biggest financial institutions.