Stephanie Kelton -- MMT and the Deficit Myth (w/ Marshall Auerback)

By both surprise and necessity, Modern Monetary Theory is here at our doorstep. And with neither major party remaining as the party of 'fiscal responsibility', it seems there is little standing in the way of MMT becoming the premise for US government spending initiatives. That’s why it is more important than ever to understand the thinking behind MMT and the common misconceptions surrounding it -- and to prepare your portfolio for its increased acceptance by politicians who view it as an invitation to spend. In this interview with Marshall Auerback of the Levy Economics Institute, Stephanie Kelton breaks down the arguments put forward in her new book, "The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy". Together they discuss why MMT does not give governments carte blanche to spend indiscriminately. Kelton also articulates why comparing government debts to private debts is flawed. She explores the varying gradations of monetary sovereignty as it relates to constraints on countries potentially using MMT as an economic framework. Finally, Kelton touches on the 'job guarantee vs. UBI' debate and much more in this interview that is sure to be a learning experience for MMT skeptics and believers alike. Filmed on July 2, 2020.

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Stephanie Kelton -- MMT and the Deficit Myth (w/ Marshall Auerback)

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[jasonmarch]

I love how this is on real vision this allows me to hear my opposing views and not be stuck in an echo chamber.

[innoccente]

We already have MMT, but only for FED insiders!

[carlosedelorbe]

Why we paying taxes if deficits don’t matter?

[alankauth]

So what happens when the world drops the dollar as the world currency and we are responsible for the money we spend as we can’t just “print money”. Our dollars are created by the creation of debt, when people stop borrowing our currency will shrink. Right now, there aren’t enough dollars in the world, but as we decline from power, so will our currency. Right when we need to pay Trillions in entitlements out of “nothing”. I can remember when bread was 15 cents a loaf, today it is $3 to $5. With where we are heading it won’t be lot long until that same loaf cost $10 instead. But income won’t be keeping up with that. There is a reason people feel they are getting more and more behind - they are. I paid for college, a top 5 engineering university, by working at Kmart part time and full time in summers. I didn’t need to borrow any money. Try doing that today. Paying for school while working at barely above the minimum wage. The 1% and every other asset holder is only going to get much richer while everyone else goes further down the hole.

[ChannelSRL]

Wow, the most economically delusional line of babble I've heard since the last Democratic Presidential Debate.

[rof]

We should never let academics form policy. The end.

[octavimb]

So politicians and lobbyists are right! Now I understand that hard and honest work is killing the economy.

[antoinedesjardins]

Crazy to even consider. All that matters is this: do we produce more than we consume? If no, then we have to fix the problem, not the accounting. Simple.

[aussie_philosopher]

I bought Stephanies book and it is interesting. I went on a trip to the U.S.A and form my observation people are getting a LOT less in terms of government services, standard of living, lower paying jobs with insecure working arrangements, in-equality than some other countries specifically where I live, so the question is what policies are working for the average person in average communities around America, people are getting shafted.

[lh]

If the government is the currency issuer, why would they decide not to fund their policies? Hyperinflation is inevitable in MMT theory, because the government always have incentive to print more money than the economy actually needs since it would guarantee to bring more political supports. Relying ruling parties to hold the flood gate is essentially equivalent to ask drug dealers for not selling their drugs, in which case it would end up very badly for the entire society.

The issue with current system is the deterioration of independence of Fed. The government is failed to rule out the inefficiencies from the economy, and they now always rely on Fed to save them on the crisis.

MMT is basically a joke.

[TobiasGuhlke]

Summary: It's different this time

[d-mrnbaiceyne]

The fact this interview was so negativity received by the broader public goes to show how truly uniformed most are.
Modern monetary theory is a description of the "debt based" monetary system currently in place, and the lifeblood of the world economy.
No, it isn't perfect but it's the truth. Just because you don't understand or are ill informed doesn't mean something is not true.
Firstly you must understand the system before you can work to improve or change the system.
So many seem to want to advocate a message of "TEAR IT ALL DOWN" and replace it with what exactly?
This monetary system is the means by which you have acquired the technology to view such informative content.
And this is the truth, the truth shall set you free.

[amabdall]

She really thinks the dollar would be a world reserve currency forever ...

[danb.]

She says (from about 3:00 to about 4:00) that the "Federal government issues currency, " But that's a lie, and if she really believes that then she is SO ill informed as to be an idiot. The truth is, it is the Federal Reserve who issues the currency through its member banks, NOT the US Government. The Federal reserve is not "Federal" and its not part of the US Government. Its a PRIVATE BANK. It also has no "reserves." -- it just makes up currency out of thin air, and that currency comes with a debt attached. And debts must be repaid -- . To a bank which is PRIVATE and not a part of the US Government.

[sigmarecon]

How is this person allowed to teach at a University!?

[douglascarlson]

Sins of ommision!
Why are we having this conversation? ...
Why is MMT always presented in a perfect-world context with no mention of its susceptibility to political forces?
Our government continues to make arbitrary decisions about how to allocate wealth and we the people always take the hit.

[amraceway]

I love how when you mention MMT it sets a trigger off in the pea brains of the free marketeers.

[nachannachle]

My take from this interview is that money only matters in the form of currency or capital, *not* income (aka if it can be printed to oblivion, it is not worth "working" for).

So, as a woman, here is my life plan:
1. Study a multi-disciplinary degree from the cheapest university - CHECKED
2. Work for 10-15 years earning a $60K-75K salary (i.e an average "Graduate" job) - CHECKED
3. Put as much money as you can into hard/capital-producing assets (RE, Gold, Cryptos) - IN PROGRESS
4. Go on the dole while you are raising children/childbearing - ETA < 2 years
5. Start your own sole-trading/shared economy business - TBC
6. Mint as much tax & welfare benefits as you can from the government - TBC
7. Enjoy the stress-free life - TBC

[lukem]

They don’t understand Yang’s policy proposals. His UBI is tied to economic productivity via a VAT