Stephanie Kelton: The Public Purse

As part of the lecture series between UCL Institute for Innovation and Public Purpose (IIPP) and the British Library, Stephanie Kelton speaks on why a government budget should not be looked at in the same way as a household budget

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UCL Institute for Innovation and Public Purpose
The Bartlett Faculty of the Built Environment

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Drawing on her experience as the Chief Economist on the US Senate Budget Committee, Stephanie Kelton gives a beginner’s class on public deficits and what (almost) everyone is missing in the debate over the government’s budget. Is the government’s budget really just like a family budget? (Teaser: It’s not!) What is the purpose of budgeting anyway? Is it to balance spending and revenue, or is targeting a balanced budget the wrong goal altogether? Is the British government living beyond its means?

Stephanie outlines a new way of understanding deficits, debt, taxes, the relationship between the public and private sectors, and what our economy could look like. Turning the public budget into a participatory, mission-oriented endeavor is critical to restructuring public services and public investment and building the kind of economy that will deliver a cleaner, safer, more secure future for all.

Rethinking Public Value and Public Purpose in 21st Century Capitalism is a lecture series presented by UCL’s new Institute for Innovation and Public Purpose in collaboration with the British Library.

Featuring luminaries from the worlds of arts, economics, architecture and design and policymaking, it considers the role of the public sector in today’s capitalist world and asks what partnerships are needed to address societal and technological challenges? How can public spaces be designed to create more democratic participation and new forms of learning and exploration? Does public necessarily mean free? Can the digital revolution create a new type of public realm?
Speakers include Richard Rogers, Stephanie Kelton, Jayati Ghosh, Lucy Musgrave and Mariana Mazzucato.

The events are free but booking is required.

[Notecrusher]

I've been following Stephanie for years. She is continually upping her game and explains economics better than anyone. I have personally asked her to write a book for the general public. I anxiously look forward to it.

[Herbwise]

During WWII in Canada the MPs were concerned about the growing debt. When one of the MPs commented that the government debt was a private sector asset, the governor of the Bank of Canada agreed. The finance minister then commented, ” If the government debt is a private sector asset, how do we make it an asset of the people.” And national health care, pharmacare, universal daycare, national pensions, national highways, railroads, etc. are examples of how this has been done.

[mitchclark]

Brilliant, engaging, accessible. Professor Kelton has built a great big body of argumentation that has extreme ability to persuade. I learned MMT from her.

[kevinpritchard]

Very interesting take on things. Supporting data and actual empirical unbiased evidence to support this hypothesis more would be helpful.

[realtychek]

Superb from Stephanie. Thanks for making such a great recording with inserted slides etc.

[waynemcmillan]

Mariana and Stephanie are brillant speakers.

[sonjak]

A historical analysis of how this monetary policy has been implemented in other countries and epochs and to what results is needed here, as well as an analysis of the relationship between Federal Reserve and the US government.

[jones]

They (Mazzucato and Kelton) came correct, right out of the gate.
Kennedy didn't say, '... uuh, yea... uhm, if we can find the money in the budget and make it deficit neutral, ... um, we'll take a shot at going to the moon... maybe, ...some day...'
He said, 'We're going the moon by the end of the decade... not because it's easy, but because it's hard (period).
Where did our balls go?

P.S. Great editing.

[northstar]

i have a question for stephanie MMT seems to meld economics and accounting ---and since currently governments inject more money into the system on an ongoing basis creating DEFICITS which cause people heads to explode as if it is bad ----why not eliminate that concept entirely and create a gigantic opening number for available money pool in the government T ACCOUNT and record all spending as draw downs against the pool that way you have a constant indicator or wealth growth in the corporate and individual sector of the economy which is a more positive idea than fretting over deficit spending ----government are eventually going to hit the opening number anyway

[copictutorials]

I agree with most of MMT, however I feel Prof. Kelton should start with explaining to people that money is only a vehicle (or record) for storing and exchanging past value creation and debt a promise of future value creation [and as such also money].
The amount of money in circulation needs to be constantly adjusted to exchange and store the value created (labor and goods/services) at a point in time while also considering the potential for future value creation.

Therefore a currency issuer constantly needs to inject (create) and withdraw (delete) currency from this cycle to adjust it to what is actually happening out there. [Remember that modern money is only a vehicle not a value in itself].
So what some call government debt is in many cases only a adjustment in money supply to match the value creation (defacto and potential) of an economy at a certain time. As such new money can help free up unused value creation potential in a society (even beyond the traditional 'economy'). I feel this might help to understand the whole theory a bit better.

[truthseeker]

Please come to New Zealand and talk to our finance minister. He thinks that he has to run budget surpluses to pay back government debt. I think that he has no understanding whatsoever of how the governments finances operate.

[larrysmith]

What is needed is an honest medium of exchange and less greed, a whole lot less greed.

[brianlund]

Two concerns: 1. I want to hear her expound on UBI; 2. I want to hear her discuss the theoretical limits of MMT. Clearly, you can't double the money supply, all things being equal, and expect no inflation. What are the limits of MMT, and how would we set the bounds?

[pauld]

What's the limiting principle? Why do I need to pay taxes at all if you can simply create more currency without consequence?

[scottmorrison]

1:24:00 She has already said that the public needs are decided at the local level.

[dawnebrown]

Nanny? Housekeeper... different snack bracket than the one I'm in!

[Orf]

46:35 "taxes for revenue are obsolete" - fed banker

[anurakeppe]

I read her book “deficit myth “ in two days . So interesting. I’m fully convinced about MMT . MMT is always there . I’m a lawyer but Stephanie convinced me to take an active interest in economics. This is absolutely fantastic awareness by her

[call-]

Imagine playing the Monopoly game when one player starts with $6500, another gets $700, and three others get $100. That is what the American economy looks like.

[bradkohl]

I really believe if we can keep educating Conservatives, Liberals, and Progressives we can win them over! I am a self proclaimed Progressive. If we can make the light bulb go off we can have all Sanders policies and more even if tax rates stayed at Rebublicans tax rates. Even though technically I prefer creating more brackets over 1 million a year.