Left Out: [FULL EPISODE] Stephanie Kelton on MMT and debunking budget deficit myths

Stephanie Kelton is a leading American economist and a Professor of Public Policy and Economics at Stony Brook University. Kelton was Chief Economist on the U.S. Senate Budget Committee and Economic Advisor to the Bernie 2016 presidential campaign. She's most known for being a pioneer of Modern Monetary Theory (MMT).

In this episode, Professor Kelton debunks budget deficit and government spending myths, and explains why understanding how our monetary system works is crucial to making the political and economic case for important programs like universal health care, free public higher education, infrastructure investment, and more.

We also explore some current economic issues, including how we might be able to cancel all public and private student debt in the U.S., and lastly the role and challenges of women in economics.

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[TedApelt]

Whenever you hear "shared sacrifices", you had better believe that those on the top will not be doing any sharing or any sacrificing.

[MalcH]

This was really an outstanding discussion. I really love discussing the elimination of student loan debt. We loved having you at UMKC, professor Kelton... You do us proud!

[topaazmoons]

Dr. Kelton does a great job at explaining how our modern monetary system works on the macroeconomic level.

[xiaohuisun]

Kelton is really good in answering all the questions in very clear manner with all the sound logic. I need to get myself involved in the MMT movement and be a force to doing society justice.

[MatthewBorn]

When Dr. Kelton was discussing the community health centers, I immediately saw those abandoned strip malls that were killed by Amazon and Walmart magically rehabilitated. Health Infrastructure is rarely discussed, well done.

[zoomdaddyo]

Stephanie Kelton is 100% correct. The fact that the U.S. government is still not using the monetary system we already have in place to make the lives for the Working Class better, is criminal. There is absolutely no reason that our economics system should ONLY work for the benefit of CEO's and their corporation. There is absolutely no reason that 84% of the TAX CUTS should only benefit the top 1%. If the Working Class had real and meaningful tax cuts, too, they would have more disposable income to spend, which would only spur the economy and create more jobs.

And as far as the worry about inflation is concerned. Inflation could always offset by a Federal Job Guarantee Program the way FDR did with the New Deal in the 1930's, which created the great Middle Class we once had. Lastly, politicians like Paul Ryan who push the "Deficit" myth and austerity and cuts Social Security, Medicare, etc, is literally costing people their lives. Paul Ryan has pushed that LIE for decades. All Ryan wants to do is "privatize" those programs, so that he and his predatory cronies can make a buck off the Working Class.

[james]

5:20 That is so true. I currently attend Quinnipiac and the university scrapped the history of economic thought class that is rarely if ever given.

[klubsvetnikov]

Cancelling Student debt - of course, basically very simple, but Stephanie still explaines a solution which would help using primary money (issued by FED) to pay fat profits to student debt creditors. Thank you very much!

[lutherblissett]

History of economic thought and political economy are the two most valuable elements of economic teaching.

[Achrononmaster]

@54:00 On debt jubilee...INTERESTING! I used to like Steve Keen's view, but SK changed my mind a bit. Chronic unpayable debt is a failure, a mistake of government in failing to regulate banks and failing to provide free or lower cost public services. To fix it a periodic debt jubilee is stupid, it is palliative, not a fix, although of course necessary if you don't fix the underlying mistake. The underlying mistake is as Kelton says, bad policy. Then following Mosler, I'd say banks need to be narrowed in scope and told only what they CAN DO, not what they can't do, and once you legislate to say what banks can do (make reasonable loans and facilitate payment transfers) then you say they simply cannot do anything else. That should fix a LOT of fraudulent loans, and hence obviate a lot of household debt build-up. Then a debt jubilee I think is thus an emergency measure, only used when indicators suggest an imminent Minsky crisis. A debt jubilee totally prevents a Minsky debt-deflation recession. And that'd be the sole purpose.

[econrith]

How come the government has never thought about the creation of timed money! This is money specifically created currency in accounts to be spent before it expires! Just think of the boost there would be. To do this you note the total in the account, add the sum to it in much the same way that all government workers are already paid, then take it away at expiry date if the total in the account amounts to more beyond normal payments of necessity, wages, assisted benefits, rents, mortgage payments, service payments, thereby forcing the amount to be spent in the local economy.

[hs]

Can someone please answer this question: Does Richard Wolff SUPPORT and BELIEVE in MMT theory???

[markuspfeifer]

Great talk! This contains almost everything that German economist Heiner Flassbeck is preaching. However, there's one thing to add: if you use the GDP-deflator to measure inflation, then it turn out that there's a really really close and stable correlation between inflation and unit labor cost. That is, inflation happens if and only if wages grow faster than productivity. Actually, this is not hard to comprehend on the theoretical level: if wages increase 'too fast', companies will protect their profits by increasing prices; if wages grow 'too slow', then companies have to lower prices in order to sell their stuff.

Hence, government spending will only affect inflation, if it leads to working people in private enterprises demanding higher wages (this might happen, e.g., if the government gives a job-guarantee and pays public employees higher wages then private employees). If it doesn't, then government spending will just create more jobs until everyone who wants to work has a job and then, it actually becomes a zero-sum-game where the government buys goods and services that private entities cannot buy anymore (which doesn't necessarily cause inflation, because it could instead also lead to higher private savings or to ever-increasing taxes).

[brahnseer]

I wish those not a principal speaker would remain silent so we could hear properly what is being said.

[klubsvetnikov]

Stephanie is great, one of the best economists today, she is correct regarding MMT and concepts of money, but very naive about the Democrats and their policies. Not holistic enough in the sense of Polanyi or Raworth or even Fullerton (who is a similar dude as Mosler), ...

[danwoods]

Doing good work Steph, listen to her america.

[Mutineer]

Problem with all this economist working for capitalist funded institutions that they can not look on the system as a whole. They all, even Keen and before him Keyness reject Marx. You can not understand economy without understanding the class relationship. You need to include all parts. Money Relationship. Class relationship. Even now when they finally try to include money in models, they still refuse to include class relationship.

[MrKongatthegates]

The political process is to slow to save the banks in times of crisis and to inept and slanted to save the labor market.

[SUNNMANN]

I'm amazed that MMT continues to be hypnotized by the concept of Profit. The concept of Profit was, is, and will always be a TRICK played upon the wage-slaves of society by the Private Banking Cartel. Profit is the ENEMY of a just and honest society. The value of ANY individual is simply what the individual can produce and contribute to their society. And it is the duty and responsibility of govt (the people) to make certain that each individual in society earns their true value. But govt has irresponsibly abandoned its control and regulation of currency creation to the Private Banking Cartel whose ONLY motive is Profit. Think about it. If the concept of Profit was eliminated and banned from society, honest individuals could earn and save all the money they wish and NEVER impact the lives of others. Savings are nothing more than future spending. Spending/sales in itself only supports a producer's honest income. The more they earn, they more they can save-invest-spend on whatever they please.
The Profit concept is nothing more than a 'get something for nothing' scam that only drains currency from society to feed the Private Banking Cartel. MMT needs to WAKE UP to the Private Banking Cartel Profit Scam and realize that if govt (the people) is the Sole Creator of currency, it has to mark the honest value of the creative and productive social contributions of the people. Create currency only in DEFINED amounts in proportion to the value that individuals produce for society - and NO more. What MMT has FAILED to recognize is the concept of Value - what it is, how individuals produce it, and how to MARK it with the correct amount of Currency.

[bargdaffy]

Is that Warren Mosler in the background talk?