Earlier in the hearing, the central bank chief issued another warning about U.S. fiscal policy, which he again called “unsustainable” over the long run.
Ocasio-Cortez and others have presented a “Green New Deal” resolution that would call for a government conversion away from fossil fuels over the next decade. Sanders and several of his fellow Democratic presidential hopefuls have called for a Medicare-for-all type of proposal that would overhaul the current system.
CNBC has reached out to Ocasio-Cortez for comment.
Sen. David Perdue, R-Ga., asked Powell about the theory, saying its advocates back a “spend-now spend-later spend-often policy that would use massive annual deficits to fund these tremendously expensive policy proposals.” MMT advocates figure the Fed would be a partner in funding these programs through easy monetary policy.
“Our role is not to provide support for particular policies … It is to try to achieve maximum employment and stable prices,” Powell said.