#19: A review of Dr. Stephanie Kelton's The Deficit Myth

I give it every yeehaw I have!

[ArtsAlign]

The government is not like a household, it's like a bank. It's one of two ways to create money, and if you don't let them create money by spending more than they take back in taxation, you have to rely on the private banking system to create the money and you therefore get private debt bubbles.

A government is like a bank. And a government running a balanced budget is like a bank that simply lends back as much as it gets in repayments, therefore the money supply never grows and without that, you don't have a growing economy. 

~ Prof. Steve Keen

[donalfagan]

I had been planning on reading Angrynomics, and now I have to read this one, too.

[mesmer]

“Not in the OJ sense.” Hahaha. I learned something and I laughed doing it. Thank you, Professor Harvey!

[mayuresh]

Wonderful, detailed review video! Thanks!

[Dinaniver]

Welcome back professor and thanks for the revue. I've bought the book and will read it soon.

[dalebirononpoetry]

Loved this video! Thanks. I’ve just learned about Stephanie Kelton’s work and am amazed at how wonderfully mind-stretching her ideas are. Watch out chains of old economic thinking, you’re breaking one link at a time...

[georgep]

"I can see the logic, ... but it can't be right."
Yeah, it's right!

[Warrenet]

Dangerous Dollars was my stripper name when I pole-danced to pay my way through college.


Also, I ordered the book.

[LegionKilo]

I'm a budding economist and veteran that grew up in Midland Texas. I'm going to earn a graduate degree in Economics, beginning the first semester in January. Then on to earn a Ph.D. Maybe afterward, public service, and finally the presidency.

[leetaituha]

Great Video. I love how you think Mr Cowboy. I've never been to the US or Texas but I'd lice to come just to meet you.

[dannywindham]

Professor Harvey good to see you back and thanks for the review. Oh and by the way the professor's funny

[dalereynolds]

It takes him 8 minutes of rather dubious charm to start to come to the point, but the cowboy is worth the wait.

[kevinfoley]

Good stuff. If a car is low on oil you don't take more out.

[leetaituha]

That's a big yehaaaw from me. You are righter than right can be...truth is the truth.

[ArtsAlign]

"For ordinary people, public budget deficits, despite their bad reputation, are much better than private loans. Deficits put money in private pockets. Private households get more cash. They own that cash free and clear, and they can spend it as they like. If they wish, they can also convert it into interest-earning government bonds or they can repay their debts. This is called an increase in "net financial wealth." 

Ordinary people benefit, but there is nothing in it for banks. 

And this, in the simplest terms, explains the deficit phobia of Wall Street, the corporate media and the right-wing economists. BANKERS DON’T LIKE BUDGET DEFICITS BECAUSE THEY COMPETE WITH BANK LOANS AS A SOURCE OF GROWTH. 

When a bank makes a loan, cash balances in private hands also go up. But now the cash is not owned free and clear. There is a contractual obligation to pay interest and to repay principal. If the enterprise defaults, there may be an asset left over–a house or factory or company–that will then become the property of the bank. It’s easy to see why bankers love private credit but hate public deficits."

In Defense of Deficits:

[markfabian]

Thet there's mah fayv'rit Cowboy Economist. He's a straight-shooter. Started out as "The Singing Cowboy Economist." Mustah been in- flooenc'd by early John Wayne 'Singing Sandy' films. Thet ended when, I beleeve, the great old economist, Hyman Minsky, tole'm that faymus frase "Any cowboy can carry a tune. The trouble comes when he tries to unload it." 'Course, Minsky then 'strapolayted thet to his even more faymuser sayin' thet "anyone kin create munny. Th' trick is gettin' it axepted." Bad eejucayters jus' bore ya tah teerz. Good'uns mayk ya laff while yer lernin'. John Harvey mayks me laff. Dang it all, I mus' be lernin'.

[PaulAnthony]

Is he saying there’s not a big concern for inflation?

[davidcann]

Yo the best econ-o-mest! If I'd had an econ lecturer like you, I would've never walked out of that neoclassical bulldust. But then, it would not have been neoclassical, right?

[AlanDownunder]

This rancher needs to stick to economics.

[davidsparks]

Meh, just own Bitcoin instead. MMT is crazy.