Stephanie Kelton: The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy

June 2020

I want to bring to your attention an upcoming livestream Seattle Town Hall event presenting economist Stephanie Kelton. I have followed her work for years and hope the presentation might interest you during this time of extreme economic uncertainty. Kelton has the unusual ability to talk about our money system in a way that is understandable to non-economists. 

Any ambitious proposal—whether it’s fixing crumbling infrastructure, instituting Medicare For All, or combating climate change—inevitably sparks a familiar question: how can we afford it? But according to economist Stephanie Kelton, this question means we’re thinking about government spending the wrong way.

Kelton steps forward with a livestream, setting the record straight with bold ideas from Modern Monetary Theory, a fundamentally different approach to using our resources to maximize our potential as a society. Drawing from her book The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy, Kelton reframes our understanding of important issues ranging from poverty and inequality to creating jobs and building infrastructure. She guides us to consider which deficits actually matter, offering critical insights about government debt, deficits, inflation, taxes, the financial system, and financial constraints on the federal budget. Join Kelton for a crash course on Modern Monetary Theory, and learn how to go beyond the question of how to pay for improvements and policies that are essential to our society.

In response to the pandemic, we’ve all witnessed that Congress can appropriate whatever funding is necessary to meet the need, and Federal Reserve Chairman, Jerome Powell, explained on 60 Minutes where the money comes from.

PELLEY: Where does the money come from? Do you just print it?

POWELL: We print it digitally. So as a central bank, we have the ability to create money digitally. And we do that by buying Treasury Bills or bonds for other government guaranteed securities. And that actually increases the money supply. 

Now our politicians will begin the familiar political theater of threatening us with the supposedly dire consequences of the debt incurred by the stimulus funding. Not only do we not need to fall for it, we need to know how to respond to those who would mislead us. 

Stephanie Kelton is professor of economics and public policy at the State University of New York at Stony Brook and Bloomberg contributing columnist. Kelton was chief economist on the U.S. Senate Budget Committee (minority staff) and an advisor to the Bernie2016 presidential campaign. Her op-eds have appeared in The New York Times, The Washington Post, The Los Angeles Times and Bloomberg.