To some econ­o­mists, that’s non­sense. ​“Deficits absolute­ly mat­ter, always and every­where,” says Pavli­na Tch­erne­va, ​“but not in the way that peo­ple think.” Tch­erne­va is direc­tor of Bard College’s eco­nom­ics pro­gram and a lead­ing schol­ar of some­thing known as Mod­ern Mon­e­tary The­o­ry (MMT).

Amidst such pros­per­i­ty, Krug­man argues, ​“gov­ern­ment bor­row­ing once again com­petes with the pri­vate sec­tor for a lim­it­ed amount of mon­ey. This means that deficit spend­ing no longer pro­vides much if any eco­nom­ic boost, because it dri­ves up inter­est rates and ​‘crowds out’ pri­vate investment.”

“Run­ning big deficits is no longer harm­less, let alone desir­able,” he warns. His log­ic here is two-fold. As the coun­try was recov­er­ing from the reces­sion, grow­ing the deficit was a nec­es­sary mea­sure to let the econ­o­my pick itself back up, per tra­di­tion­al Key­ne­sian doc­trine. Today, though, ​“full employ­ment has been more or less restored,” Krug­man writes, as evi­denced by slight­ly high­er wages and the fact that more work­ers are quit­ting their jobs in a show of new-found bar­gain­ing pow­er. Deficits — as the title of his recent op-ed reads — ​“mat­ter again.”

Paul Krug­man is wor­ried . Repub­li­cans, it seems — after decades of hem­ming and haw­ing — have stopped pre­tend­ing to care about deficits and are prepar­ing to go all-in on a spend­ing-heavy agen­da. As a for­mer Sen­ate Repub­li­can said recent­ly , con­cerns about bal­loon­ing bud­gets have ​“sort of dis­ap­peared from the radar.” A few years ago, this would have been wel­come news to Krug­man, who made argu­ments in sup­port of deficit spend­ing until very recent­ly . But no more.

As Krug­man con­cedes, it would be impos­si­ble for the Unit­ed States to find itself in a Greek-style debt cri­sis. Unlike the Euro, dis­trib­uted by the Euro­pean Cen­tral Bank, the U.S. dol­lar is a sov­er­eign cur­ren­cy, deci­sions about which are made inde­pen­dent­ly — like the one to spend $14 tril­lion bail­ing out the finan­cial sec­tor in 2009. By sug­gest­ing that spend­ing could some­how ​“crowd out” pri­vate sec­tor invest­ment, Tch­erne­va tells In These Times, Krug­man falls into a trap of treat­ing mon­ey as a fixed quan­ti­ty, over which the pub­lic and pri­vate sec­tor compete.

“The Trea­sury and Fed always coor­di­nate to meet gov­ern­ment pay­ments. We don’t depend on pri­vate mar­kets,” she explains. To Tch­erne­va and oth­er Mod­ern Mon­e­tary The­o­rists, deficits don’t mat­ter because the gov­ern­ment will run out of mon­ey to pay its bills, but because of the return they do or do not pro­vide on the state’s invest­ment — and to whom.

“Some deficits cre­ate jobs and some do not. Some deficits cre­ate a lot of inequal­i­ty and oth­ers do not. The way we want to think about it is in terms of what we are get­ting for the mon­ey,” she says.

Tak­ing on Democ­rats in the mid-1990s, Repub­li­cans start­ed to artic­u­late a sim­ple and com­pelling log­ic. ​“Amer­i­cans … are angry and in doubt about the future,” con­ser­v­a­tive poll­ster Frank Luntz wrote at the height of the GOP-engi­neered gov­ern­ment shut­down in 1995. ​“The main cul­prit? Wash­ing­ton’s inabil­i­ty to bal­ance its own books.”

The irony is that the GOP loves deficit spend­ing, just on spe­cif­ic pro­grams. Deficit-fund­ed wars and tax cuts for the rich have ani­mat­ed Repub­li­can admin­is­tra­tions from Ronald Rea­gan to George W. Bush. Yet when it comes to oth­er so-called big-tick­et items, Repub­li­cans warn Democ­rats (and, more impor­tant­ly, the pub­lic) that such spend­ing will dri­ve the coun­try into finan­cial ruin or worse: bring vig­i­lante Chi­nese bond­hold­ers to our doorsteps.

For Tch­erne­va, the GOP’s new­found turn away from deficit hawk­ish­ness makes sense. It also hints at what was dri­ving con­ser­v­a­tives’ deficit fren­zy all along: a quest for pow­er. Sound­ing alarm bells about bud­gets has proven a sound tac­tic to chal­lenge Demo­c­ra­t­ic pres­i­dents. Now that Repub­li­cans con­trol the White House, they can let them go silent.

“Peo­ple are not los­ing sleep over the bud­get of the Unit­ed States,” Tch­erne­va says. ​“What they are los­ing sleep over is their jobs and their income. This is the rea­son why the Repub­li­can Par­ty is right now not pay­ing much atten­tion to [deficit] arguments.”

Mean­while, lib­er­al econ­o­mists like Krug­man remain behold­en to bud­get woes. Lurk­ing beneath the sur­face of his most recent op-ed is some­thing called NAIRU, short for the non-accel­er­at­ing infla­tion rate of unem­ploy­ment. Those who believe in the NAIRU argue that tru­ly full employ­ment — ​“where any­one who wants a full-time, liv­ing wage job can find it,” accord­ing to Tch­erne­va — can trig­ger a neg­a­tive feed­back cycle. When jobs aren’t hard to come by, the think­ing goes, work­ers enjoy more bar­gain­ing pow­er, free­ing them to push boss­es for bet­ter wages and quit if they don’t get them. In turn, boss­es are more vul­ner­a­ble to pres­sure and more like­ly to com­ply with their employ­ees’ demands. They then pass increased pro­duc­tion costs down to con­sumers, who — as employ­ees them­selves — will start to demand even high­er wages.

The clos­er you get to full employ­ment, accord­ing to NAIRU, the high­er a risk you run of infla­tion. It also means that the fix to exist­ing or impend­ing infla­tion is for cen­tral banks to engi­neer high­er lev­els of unem­ploy­ment by rais­ing inter­est rates, plac­ing down­ward pres­sure on employers.

Rohan Grey, founder and pres­i­dent of the Mod­ern Mon­ey Net­work, calls the NAIRU ​“an intel­lec­tu­al edi­fice designed to rein­force and jus­ti­fy keep­ing labor weak and under­mine their abil­i­ty to bar­gain,” argu­ing that it ​“puts the bur­den of macro­eco­nom­ic pol­i­cy man­age­ment on the most vul­ner­a­ble peo­ple in soci­ety.” For the last sev­er­al years, infla­tion has under­shot the Fed­er­al Reserve’s 2 per­cent tar­get, even as unem­ploy­ment has dropped.

The rosy employ­ment data Krug­man cites may be mis­lead­ing, too. In part, due to the chang­ing nature of work, many of the jobs cre­at­ed since the reces­sion are part time, a cat­e­go­ry that includes every­one from retail work­ers clock­ing in for 20 hours a week to Uber dri­vers shut­tling pas­sen­gers for a sin­gle week­ly shift. Hun­dreds of thou­sands of peo­ple have either giv­en up look­ing for work, or — hav­ing failed to find it — are now inel­i­gi­ble for unem­ploy­ment benefits.

The alter­na­tive — tru­ly full employ­ment — would require some­thing called a job guar­an­tee, ​“the miss­ing piece in the safe­ty net,” Tch­erne­va says. While not a replace­ment for oth­er kinds of unem­ploy­ment ben­e­fits, a job guar­an­tee in the MMT vision would look to put those peo­ple out of work who want it into pub­lic sec­tor jobs, and cre­ate a nation­al wage floor that would force the pri­vate sec­tor to com­pete. Such a pro­gram could also deter what Tch­erne­va calls the ​“con­ta­gion effects” of unem­ploy­ment, where­by those out of work stop the kind of dis­cre­tionary spend­ing on things like meals out and trips to the movie the­ater that dri­ve job cre­ation in oth­er sectors.

Of course, such a pro­pos­al falls out­side the main­stream of both the Demo­c­ra­t­ic and Repub­li­can par­ties. ​“Gov­ern­ment,” Oba­ma said in 2010, ​“can’t cre­ate jobs to replace the mil­lions that we lost in the reces­sion, but it can cre­ate the con­di­tions for small busi­ness­es to hire more peo­ple, through steps like tax breaks.” Think­ing about jobs as a pub­lic ser­vice like any oth­er, though, leads to a dif­fer­ent con­clu­sion. ​“When you need edu­ca­tion, the gov­ern­ment builds schools, yet when it comes to jobs we rely on the mar­ket,” Grey says.

If politi­cians seem far from accept­ing the idea of a job guar­an­tee, their con­stituents may be clos­er. A Gallup poll in 2013 found that 72 per­cent of peo­ple would vote for a gov­ern­ment-fund­ed fed­er­al pro­gram to put peo­ple to work on urgent infra­struc­ture repairs.

For Krug­man, the prob­lem is that Repub­li­cans are dri­ving up deficits, peri­od. For Tch­erne­va and Grey, it’s that no one seems to be dri­ving them up in the right way — fore­clos­ing on the pos­si­bil­i­ty of egal­i­tar­i­an reforms before it even arises.

“Democ­rats have moved away from their New Deal roots. Democ­rats can­not be pro­gres­sives and fis­cal con­ser­v­a­tives,” Tch­erne­va says. ​“These are con­flict­ing goals. They have to give up fis­cal con­ser­vatism and stand behind pro­gres­sive policies.”