Bernie Sanders' 2016 Advisor On Modern Monetary Theory

Modern Monetary Theory (MMT) is gaining traction in American politics, energizing the progressive left and roiling deficit hawks. Stephanie Kelton, who advised Bernie Sanders' 2016 presidential campaign, explains the basics.
She also talks about 2020, saying Democrat presidential hopefuls are swinging for the fences with ambitious policy proposals while Trump appears to have changed his thinking on the deficit and debt since his 2016 run. On headwinds facing the economy, Kelton says she sees an "extraordinarily resilient" U.S. economy despite a "real" global slowdown and a small chance of additional rate hikes from the Fed.
With U.S. government deficits increasing again and big spending plans coming from potential Democratic presidential candidates, we thought it would be prudent to have a conversation with Stephanie Kelton. She's a proponent of Modern Monetary Theory (MMT), the economic rational cited by rising political stars like Rep. Alexandria Ocasio-Cortez D-N.Y.
Kelton currently works as a professor of public policy and economics at Stony Brook University. Previously, she served as chief economist for the Democrats on the U.S. Senate Budget Committee and was a senior economic advisor to Bernie Sanders ' 2016 presidential campaign.
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Bernie Sanders' 2016 Advisor On The Economy And Modern Monetary Theory

[@CNBC]

Do you think the government spending more money than it raises in taxes is a problem by itself, or only if it results in inflation, as Stephanie Kelton thinks?

[@tylergibson3093]

CNBC DUH!!!! Because this creates a false narrative and creates this sense of we need to raise taxes because we’re spending more even though spending could be less. It also imposes law enforcement to be used on certain conditions for persons of power. There’s a lot more that can be said these are two critical points though

[@mld962]

If theres a way to completely destroy the value of a currency is probably this modern monetary theory

[@mrzack888]

Largest national debt in history, highest stock market and home prices in history. The two are correlated. We do have inflation in assets, but no inflation in easily mass produced items such as cloths, electronics etc.

[@alanparker4922]

Federal Taxes DOESN'T Fund Federal Spending But Federal Spending Funds Federal Taxes PERIOD

[@thisaguyokay6316]

How can this political speech be veiled as news?

[@qxrbil]

"anything could happen..." Corona-virus: "well hello there."

[@jhonnyspeed4513]

Yup. This goes to show you that had we had Bernie in place and he enacted these sorts of policies we'd be sunk right now.

[@BGcam]

Jhonny Speed you mean it would have saved us because our income would have been guaranteed by our country through guaranteed paid sick leave and covered medical costs. Bernie’s policies would have saved our economy from being derailed by this. Now we are likely to enter the next Great Depression.

[@marius6086]

@@BGcam I don't think that's what he meant.

[@Kaptens]

Conspiracy theory

[@HankTheTank23]

@@BGcam Are you kidding me? You don't see any issue with paying people to do nothing? Money is only valuable if there are goods and services you can actually exchange it for. If the economy is virtually shut down, as it is right now, there are much less goods and services available, so each individual dollar becomes worth less and less with each new dollar they print. MMT is lunacy.

[@jorgeponce5512]

Kudos to CNBC for letting her talk, instead of bringing Joe Squawk Box to interrupt her every 12 seconds.

[@jorgeponce5512]

@Mathew Sanders would be better advised by people who have defected from Wall St (Nomi Prins, Jordan Belfort), former Finance Ministers (Varoufakis-Correa), and nuanced entrepreneurs (Andrew Yang - assuming he does not win the nomination). They support him (Sanders), actually know the ropes, and can design policies to curtail corporate welfarism, and privatization-of-gains-versus-socialization-of-losses behavior (i.e. Socialism for the Rich), which is the real scam of capitalism, the only system that have brought mass consumption and unstoppable development of science and technology (USSR-Maoist China-Eastern Bloc-Cuba already proved their economic mediocrity, at best). MMT is a theory, with very little (yet) factual basis, no different from other political ideologies masquerading as economic schools e.g. Austrian Economics. I believe academics like Kelton are not going to bring much to real life, but who knows, I could be wrong. And Sanders would help himself if he wouldn't sound like a broken record with "the top 1 % GRRRRH".

[@jorgeponce5512]

@MathewA Sanders presidency can easy slip into inflation, not so much by increasing government deficit and debt, but due to supply constraints (now I am sounding like an economist).

[@jorgeponce5512]

Meaning that if Sanders attacks or threatens the profit motives of the entrepreneurial class, they could shrink production or shift it elsewhere. Couple that with a Sanders administration's proclivity to give money away. Would that mean inflation ?

[@avigindratt7608]

Joe Squawk Box bout to get a job in the White (supremacist) House.

[@utubeddong]

Jorge Ponce joe is too political

[@JacobSwiftCA]

I like the format of this type of video journalism where it's more about the content of the answers than the interviewer.

[@catcherboy96]

Wow. Props to msnbc for covering this. Credit where credit is due.

[@robertjenkins6132]

Technically CNBC but I get your point.

[@unbanunbanunban9083]

No.. no just no. This is what the news people are supposed to be doing. I get really miffed when people give praise to institutions, this one in particular and the punditocracy it has spawned, for doing the bare minimum of *WHAT THEY ARE SUPPOSED TO BE DOING!* this is online because they want younger eyeballs. I’d bet they’ve yet to broadcast this on their any of their cable programs. So no! No credit for this or anything the resembles education the masses

[@catcherboy96]

XX Watcher I believe in purity of outcome. Not purity of method. But point taken.

[@infinitesingularity3835]

I know lol corporate media showcasing economic theories that would possibly affect their executives/owners profit wow never thought I would see the day

[@consciouscrypto3090]

This is the first time I've seen Japan presented as an example of things working well economically. Usually they're presented as a cautionary tale. Interesting stuff to contemplate here. Basically the problem with previous QE is that all the money wound up with corporations and stock market investors, not reaching the real economy. So all the inflation wound up in the stock market. So the trick is to stimulate the main street economy (investing in infrastructure, education, R&D, etc.) but vetting each policy to make sure it doesn't cause inflation. Result might be Japan's situation of a stagnant stock market for decades, which hurts the rich, but lots of benefits for the working class. If we shore up social security to make the working class less dependent on the stock market for their retirements, then we further protect the working class from necessary contraction of the stock market to deflate the bubble that was caused by the last QE. Maybe the reason we haven't been considering these ideas in the government is because those who hold/make great wealth in stocks have controlling influence over our government. Time to change that.

[@JohnnyJr396]

Have you read anything about Japan’s economy ?

[@JohnnyJr396]

I just find it hard to believe . If the US economists were the only group saying Japan has major issues I would buy what you’re saying. There are too many articles from Japan about their concerns for the criss they’re in.

[@JohnnyJr396]

Bam Boozled, thanks for replying the way you did. Let me ask you this. With fractional reserve banking based on the minimum reserves, the funds rate and the discount rate controlled by the Fed reserve to keep our economy from overheating and stalling. Is she saying not to worry about the deficit increasing based on what they are doing now or dose she want the entire monetary system changed?

[@JohnnyJr396]

Bam Boozled , I’d like to hear your thoughts on this. The thing that helps Japan and other major exporting countries, especially China, is productivity and keeping their currency weak compared to the US dollar. Since the US dollar is a world reserve currency, countries buying US bonds and the petro dollar in the past , have kept dollars from flowing back into the US and has propped up the dollar .To me it seems this is mutually beneficial between the exporters and the US as an importer. Once the US starts expanding it’s money supply to the level of Japan , then global trade will change drastically...and the deficits will be in values many couldn’t understand I personally would love to see many jobs coming back to the US. I do understand we went from manufacturing to service as we have advanced, but many people have fallen through the cracks from a lack of productivity.

[@christianlibertarian5488]

@@bamboozled1618 You have given Japan "credit" for doing government run socialized programs, assuming they are in some way superior to not having such programs. What you see in Japan is a transfer of wealth from the young to the old, from the productive to the retired. This is what Pinketty refers to in his "f>g" equation. Japan is essentially living off capital. Some of that is our capital, BTW. But the apparent economic lesson is to not have children, and find a Sugar Daddy (the US).

[@amabdall]

The Fatal flaw in MMT is the fact that international involvement in this monetary system is rarely mentioned. The world is already starting to move away from the dollar (Russia and China leading the charge) and all this printed money which we sent overseas will come home to roost. It's enough that the dollar is the biggest heist in history, taking it to the level of MMT will only expedite the fall of the dollar and thus no one wants to sell us anything using a useless currency.

[@RCHsieh-pz8sf]

So we need to have and to have a world central bank be set up.

[@Knight766]

The whole system is a scam and it will eventually collapse. It can't be avoided.

[@winteriscoming4407]

4:40 mmt 5:24 deficit 13:12

[@DaveVoyles]

0:20 "I don't think there are very strong indicators that a recession is imminent." *CORONAVIRUS HAS ENTERED THE CHAT*

[@God-yr9rs]

It would have happened anyway.

[@alvarolopez8448]

@@God-yr9rs The asset overvaluation was already there; the coronavirus just exposed that.

[@Inazarab]

She put a lot of qualifiers after that. She made it clear that a recession was possible. But a recession wouldn't have an effect on MMT, if anything a recession is the perfect time to implement MMT.

[@priatalat]

Oh look, and we're all fine and doing even better!

[@GaneshKrishnan]

"I think you're seeing more ambitious policy proposals this time"... Ended up with Biden and Trump

[@mind-of-neo]

Because those with ambitious policy ideas were crushed by the conspiracy of the establishment to take them down

[@plumbus813]

She used one data point (Japan) to dismiss government debt. Venezuelan debt to GDP ratio is about 35% and they are going through hyperinflation. Which one is correct?

[@consciousbeliever2470]

Venezuela's debts are denominated in dollars not their currency the bolivar.

[@xyzsame4081]

to be fair: Japan does not have oil and is not the target of U.S. hostilities (yes that is connected, search for Koch brothers, coup 2002, refineries Texas).

[@RuinDweller]

It's not about the money, or the ability to issue it, it's about real resources. Show me a monetarily sovereign nation, even one with a fiat currency, that spiraled into hyperinflation, and I'll show you one that ran out of real resources.

[@danilthorstensson8902]

The difference is that Vuvuzuela pegs its currency to USD

[@ginza69gmail]

HELLO from Japan

[@jesselivermore2291]

so according to her high debt and deficits are good...

[@soulfuzz368]

Of course, we get more stuff right now!

[@KevinOrePflucker]

for a government, yes

[@pietersteenkamp5241]

According to Japan and the USA, yes.

[@johnlocke4695]

But in the long term dollar experiences hyperinflation and debt crisis.

[@dnickaroo3574]

A sudden spike in Interest Rates unravels the whole mess. The Fed has to "print money" to keep Interest Rates artificially low (and in ever increasing amounts). It can do little if there is a Recession -- except try Negative Interest Rates!! You cannot manage inflation by "money printing".

[@Timanator]

That makes no sense, just because someone has good credit, they should spend away without worry about being able to pay the debt? We do still sell bonds to other countries right? The deficits lender is not US citizens, so if they get liquidated, dollars will fall.

[@Inazarab]

The government issues it's own currency, unlike a person.

[@gilkeydickinson2550]

Saying there is no problem in Japan currently is a lie. Wages are low and the cost of living is high. I live in the countryside and the economy out here is terrible. Is that due to the national debt? Hard to say, probably a lot of factors contribute to that, but it doesnt help.

[@patrickvalencia3991]

Thank you for having Dr. Stephanie Kelton on! 💥💥💥💯💯

[@HuevoDuro702]

was she in the Jimmy Dore show?

[@TCt83067695]

Yep

[@Hooch802]

Last October I think

[@Unclejamsarmy]

Jimmy ahead of the curve!!!

[@TCt83067695]

@@Unclejamsarmy always. So much for a jagoff comedian 😁👍🏾

[@dpersonal4187]

Yes, and she blatantly lied about the Green Party's student loan forgiveness proposal.

[@michaelobrien5910]

So Japan has a debt-to-gdp ratio of some 240% with no inflation AND no growth. So, at the moment, debt does not seem to have affected inflation but neither has it positively impacted growth.

[@pietersteenkamp5241]

We don't have a growth problem but a wealth distribution problem; japan like any society has more than enough economic activity to afford everyone a great lifestyle and the fact that it doesn't is unfortunately like in the USA about our lack of access and control over our supposed democratically elected parliaments.

[@obo2999]

@@pietersteenkamp5241 aka socialists aren't stealing enough wealth

[@cadronpickett397]

Obo299 I’m not sure how much of the video you watched or to what extent you follow MMT. But, according to MMT the purpose of taxation is not bringing in revenues, but explicitly wealth redistribution. So if you look at the Republican tax cuts for instance, who do they benefit the most? Those at the top. They are working to redistribute wealth from the bottom, to the top. The question is not who we want to steal money from, but how can we shape tax policy to help increase productivity, health, and happiness of the general population.

[@patrickstanley2104]

Many issues with MMT, but in short it doesn’t acknowledge: - the degree of inflation - the presence of other currencies - capital flight - physical emigration - game theoretic responses of 300M+ citizens to new incentives Instead it models the US economy as a tank of water.

[@frankblangeard8865]

She claims that debt to GDP in Japan is 'orders of magnitude' above debt to GDP in the U.S.A. 7:55. A debt to GDP of 236% is not 'orders of magnitude' above 105%. An 'order of magnitude' in our number system is a factor of ten not a factor of 2. And 'orders of magnitude' (plural) would need to be at least 100 times greater.

[@calvinminer4365]

from Webster: or·der of mag·ni·tude noun a class in a system of classification determined by size, each class being a number of times (usually ten) greater or smaller than the one before. ***usually ten*** ok, so you're a half-wrong pedant. Do you have a substantive criticism?

[@cxvelasco1]

Wow. Props! MSNBC talking about real news and policy!!

[@TerrariaGolem]

This is CNBC

[@homerclark4885]

If money were not a problem for the government why does our government need to tax?

[@willrichardson519]

It maintains demand for and value of money. It can help distribute wealth. It can be a policy tool to discourge spending. Beardsley Ruml Taxes for revenue are obsolete, Journal of American affairs.

[@xyzsame4081]

To steer behavior and jumpstart technologies - like solar or electric vehicles. Think a carbon tax. It would trigger the use of energy saving devices and trigger the production of renewable energy (wind turbines, solar panels). If gas is more taxed (and the citizens get a benefti by the gov. to compensate for the extra costs - but they can use it for whatever they want) more energy efficient cars would be bought. Many people would pocket the money (that is how they did it in australia, then after 1,5 years a right wing gov. came into office that protected coal from competition).

[@xyzsame4081]

Imagine the concept of MMT was understood and prudently (with a lot of restraints) used. Public housing, Green New Deal, building streets and bridges, or highspeed rail. No one could ever argue for privatizing public services (railway, sewage systems, ....) with the argument "We do not have the money". The haves LIKE those safe investments (public services and housing is something poeople NEED). Same with healthcare. If more hospitals are needed .... money is not hard to come by, and there are people who know how to set up a hospital, it is not rocket science. and the nost offensive thing (from the point of view of the "investor" class): services would be provided and the people doing the actual work would get wages, companies would build buildings or machines. But no "investment" opportunities for the profiteer and landlord class. you will hear sometimes that "capital" needs to be accomodated and placated, it is a shy deer. Now imagine it becomes known that "capital" is not needed - not the money anyway, that is easy to come by. If an investor has a lucky hand with sniffing out winning projects or selecting managment - that would be a useful talent. But usually they only act like they can walk on water, they are not really that good.

[@blazingax05]

Love that different theories are challenging the neo-classical economic dogma

[@TarunKumar-uo5gn]

show me the math which proves that more money printing to finance deficits does not lead to increase in inflation because its mathematically impossible

[@FlashThe]

Here's the math. There's still idle resource on the economy which would not be used by private sectors. They (labour and capital goods, material) can be used by public sector to make more goods & services into the economy. The government of course printing new money, as you like, to pay for these public jobs. And they call it deficit. New more money compete for few already existing goods is inflation (it's your mathematically impossible btw), but new money buying new created goods isn't inflation. A few new money buying many many new goods is deflation. Technology is deflation, infrastructure bring better productivity is deflation, naturally. Matter here is not printing, matter is how much, and printing for what purposes, and how to spend it efficiency and effectively boost future production.

[@georgeemil3618]

Take a look at the USA between the 1990s and 2020. Can you tell me truthfully that no new money has been printed? Since the mid-1990s, inflation has dropped from double-digits to low single-digits, like 2.5% while the deficit kept going up (except a short time during the Bill Clinton presidency). And that period includes the dot-com bubble, and the financial crisis.

[@TarunKumar-uo5gn]

@@FlashThe That only applies if the excess growth in productivity/tech due to more money printing is far in excess of quantum of growth in money supply and hence debt and is also evenly distributed. The empirical evidence is just to the opposite and that is because the so called tech led productivity improvements take time to materialize while increase in prices is inelastic and here and now. Moreover income inequality in US is at an all time high so real effects of inflation are not being felt by rich but by the poor.

[@TarunKumar-uo5gn]

@@georgeemil3618 Yes but US inflation has been remarkably sticky as well not declining from 2-4% range ever due to this money printing. Inflationary effect is always cumulative which will manifest in few decades not few years .

[@georgeemil3618]

@@TarunKumar-uo5gn 2 to 4% inflation isn't bad. And it already has been a few decades. Compare it to the mid-1980s when inflation was double-digits and we had deficits and debts too.

[@johnd4348]

She said there was not inflation. Really, student tuition up, Gas prices up 40 percent, housing and rents up 10 to 15 percent, Property taxes up 10 percent. Sounds like inflation to me.

[@consciousbeliever2470]

Those price inflations are cause by other factors outside government spending.

[@johnd4348]

@@consciousbeliever2470They are still increase that people have to pay. And student tuition is a direct cause of Gov policies. Gas prices are a direct cause of Gov policies. Property taxes are a direct cause of Gov policies or at least influenced by Gov.

[@roryokane5907]

@@johnd4348 except the government could pay for college and healthcare and overall those prices would be SO much lower.

[@johnd4348]

@@roryokane5907 Name one thing the Gov pays for that is lower in price. When Gov pays for something the price is always much more. Give me an example were the Gov pays less for anything. When Gov guaranteed student loans the tuition at college went thru the roof.

[@aquamaggerasim4993]

Madness

[@seankhmersight5058]

We just print more money ... what a magical idea ...give the guy who thought of it a Nobel Prize please.

[@TheBandFiles]

That would be a king in Lydia in around 650 BCE. It's how money has always worked.

[@dickgoblin]

That is not what she is talking about. The literally first words out of her mouth were "the only risk to debt spending is inflation" She is saying that debt spending does not necessarily lead to inflation. There are certain buffers that allow an economy. If those buffers are not abated then it can cause inflation. Sure the second part of this is a little hopeful, but the first part is not controversial idea in economics.

[@bryguy4golf]

We print the money. The other side of that coin is that you are not able to gaurantee the purchasing power of that money. Good explanation of the concept though.

[@Risk-on1]

The economy looks pretty darn weak to me but maybe cause I live and work around normal people.

[@rockycomet4587]

The economy is stronger than it's ever been. Thank you President Trump!

[@TerrariaGolem]

@@rockycomet4587 i feel bad for you if this isnt sarcasm

[@rockycomet4587]

@@TerrariaGolem Why? I'm on the winning side of history!

[@lennycomo]

Rylan L z

[@stevewilkens5134]

The economy isn't effectively represented by the poor people around you and their dispensable income or standard of living.

[@bensaltiel5465]

Could a proponent of MMT help answer the following questions for me? Thank you The analogy she gives at 7 mins regarding creating the surplus of $10 makes it appear that the government is creating wealth when in actuality they are just borrowing that money to invest in projects which may or may not yield a return greater than the cost to borrow and repay that money (albeit down the road). She brings it up at 7:55 but the key point is that these investments will need to eventually overcome the borrowing that was previously made. In the case of some of the proposals offered by Sanders and AOC, they are proposing doubling the national debt through borrowing which would mean that their policies would have to result in productivity growth that I do not believe has been seen in a developed economy in modern history (I may be wrong about this). I do not see how universal health care, tuition free college etc. will double productivity growth or even raise it to a level that could eventually justify the amount of money that would have been spent on it, especially as these are ongoing costs. US already has a labor participation rate of 63% and very low unemployment therefore the question remains, unless US fertility rates and/or immigration rises, how much can productivity growth increase? I think the only reasonable answer is wide scale automation, which would likely go against most of what Sanders, AOC and other progressives advocate for. Furthermore, I do not believe she mentions the risks associated with keeping interest rates artificially low, while I know some schools do not believe in using monetary policy to try to influence the economy, I would find it difficult to believe that governments would give up the benefits associated with cutting interest rates when the business cycle slows down. In addition it sounds to me like what she is asserting is that interest rates are irrelevant to lenders; is she saying that interest rates are irrelevant to lenders? It makes it seems like there is an unlimited supply of domestic lenders or that the US will simply print any money they need to raise which to me sounds exactly how most currency crisis begin. Is the argument that the US cannot enter a currency crisis contingent on the belief that there are no better alternatives for lenders seeking a risk free asset? Also I just wanted to point out that Japan appears to be in a different situation then the US considering they have much higher personal savings rates (26% compared to 2% in the US), if the US had 20% savings rates I would be much more inclined to agree with her hypothesis regarding domestic borrowing. Even with the higher personal savings rates, Japan government bonds are held more by foreigners than Japanese banks, therefore I do no see why she believes that the US can endlessly borrow without having to rely on foreign borrowers who will undoubtedly care about interest rates and default risk. I have not taken the time to read through any papers she has published but I have seen a lot discussed about MMT and I am having a difficult time understanding the idea being proposed by supporters of the theory that believe debt levels or running a large perpetual deficit will not be problematic because this borrowing will continually result in greater growth.

[@robertjenkins6132]

Sorry, I didn't read your comment in its entirety; I had to stop at "borrowing." Deficit spending does not require borrowing. If the government spends $100 and taxes $90, it doesn't matter if the extra $10 that is retained by the nongovernment sector is held in the form of dollars or treasury securities - the latter are nothing more than the interest-earning savings account version of dollars and are highly liquid, meaning that they can easily be traded for dollars before the maturation date. In neither case is it truly "borrowing," because the government is the monopoly issuer of its fiat currency and thus does not need to borrow in order to spend in its own currency. Exchanging treasury securities for dollars pushes the interest rate up because it depletes bank reserves. If the government deficit-spent without a matching issuance of treasury securities, it would glut bank reserves and push interest rates toward zero. Thus the Fed can set the interest rate at whatever it wants by buying or selling treasury securities: buy them to increase bank reserves and push rates lower, or sell them to deplete bank reserves and push rates higher (and people will always take that deal because as I mentioned the rate tends toward zero with glutted bank reserves, and the treasury securities are equivalent to dollars but earn interest above zero). I did see you mention personal savings in Japan. The net increase in the financial wealth of the nongovernment sector matches dollar-for-dollar with the federal government's deficit. This is true as a matter of accounting. Lookup "sectoral balances." If the nongovernment sector tries to save when the government will not run a deficit, it will not be successful (paradox of thrift).

[@voteforno.6155]

The federal government is the currency ISSUER. It does not "borrow" its own money, any more than you need to take out a loan for your own IOUs.

[@xyzsame4081]

@@robertjenkins6132 Well actually the governments CHOSE to borrow money (or they are ignorant, some understand what they are doing, but the rich investors LIKE it and absolutely do not wan the masses to understand _debt and interest free money._ governments borrow from banks sometimes, most of the time from investors when they issue bonds.

[@FlashThe]

At least you asked the right questions, as MMT proposal. You asked how much should the deficit be compare to potential productivity could possibly gain. This is all about. We should put aside the "how do we pay for it" questions and focus on real questions needed to be ask like this. As MMT said, the government doesn't borrow to finance its spending, they gave people the saving vehicles (Treasury securities). If they want to spend then they spend. The borrowing, the interest rate on treasury bond is not the limit

[@Basta11]

Anybody can print their own currency. The problem is getting other people to accept it as payment of goods and services. Governments print money and people accept it because people need it to pay taxes, pay for permits, licenses, fees that the government imposes. A government that prints its own currency such as the U.S. Federal Government does not need to borrow in its own currency, it can always print more. When people buy government securities, its really more like a Certificate of Deposit at a bank. They are just trading their cash, into a security that pays more cash into the future. The government just basically just print more cash to pay off that interest. This is different from a government that borrows in a currency that it does not control such as the State of California or City of Detroit or EU members that only use the Euro. They borrow in a currency they do not control and are subject to the same constraints as individuals and corporations - they must somehow earn the money to pay back their debts else they default and go bankrupt. You shouldn't be able to default and go bankrupt in the currency you control unless you choose to. The only constraint for a government that prints and spends its own currency is maintaining the value of that currency. The value of the currency is based on supply and demand. The supply is controlled by the government through government spending and open market operations to influence interest rates and by banks extending credit. The demand for that currency is based on the amount of goods and services available for purchase in that currency.

[@leandrokataoka2435]

Would be nice to have her again to share MMT standpoint now that we are seeing a resilient inflation worldwide.

[@Rob-fx2dw]

Her comments about the inflation that ramped up were that it was "growing pains" for the economy. Absolute B. S. from Kelton who is prepared to say anything to avoid the facts.

[@tropics8407]

Oh she is talking again. Now that inflation is on its way back down. No mind that you will never see those prices again.

[@polanco187]

It never hurts to challenge conventional thinking. Goodness knows how many previously held truths have been shown to be untrue, especially in medicine.

[@armanke13]

I still don't understand macroeconomics, 😅

[@investigator9846]

Ariel Rakhman - You won't understand it if you follow MMT since it is just a lot of confused contradicting statements which is not economics but some political power seeking garbage.

[@TerrariaGolem]

@@investigator9846 it's confusing cause colleges teach calculus over economic history. Not all will work on wall street boys.

[@rich1051414]

Anyone who claims to understand it does not understand macroeconomics.

[@RuinDweller]

The 'macro' part is where the 'theory' in MMT comes in, as far as I'm concerned. We cannot possibly know all of the possible manifestations of money, in spite of seeming to have run the gamut as a global culture.

[@dnickaroo3574]

If you cannot understand calculus you will have no chance with macroeconomics.

[@danki2000daniel]

Debt is how money is created in the first place

[@rockycomet4587]

No, you just go to the mint and print some. Then, you use it to pay off your student debt.

[@soulmate805]

Andrew Yang is the best candidate to test out this MMT.

[@TerrariaGolem]

Bernie 2020. He's the OG. Yang is too close to the status quo and too new to political his leanings

[@raymondsinclair4]

population is an issue. however company's don't want the issue addressed as they want more people= more customers. War was used to solve this problem in the past but the atom bomb has suppressed this as an option. We need major education, empower women and money incentives to smaller families or having no kids.

[@freedomwatch3991]

Yeah but the Yen is a highly depreciated money and I'm guessing that has something to do with their ability to sustain these debts. Anyways, I get the gist of her argument but government spending usually ends up being devalued capital and assets, and the savings to buy the produce of those assets just aren't there. I don't think the current debt is a big issue but you guys need to get deficit under control.

[@tompaulcampbell]

Well, we do have a long term inflation problem! In the 80's, janitors could by good sized houses, now they can't! College costs have 15x'ed and income has, maybe, doubled or tripled!

[@artfuldodger5933]

Increased prices in certain markets =/= net inflation, though. Inflation mainly hurts people with savings, not janitors' buying power or students. Wage stagnation, predatory lenders, and government mismanagement are the causes of the problems you're talking about, not inflation.

[@AdamSmith-gs2dv]

Inflation is a decrease in the value of the currency. The result is rising prices EVERYWHERE not just one region of the country or one item. Venezuela is a perfect example of what inflation is.

[@tompaulcampbell]

@@artfuldodger5933 Well, when wages don't keep pace with inflation, and it seems the closer to the minimum wage you are the more you lose. The minimum wage has about 3x in the time housing prices have more than 10x, at least in California.

[@artfuldodger5933]

@@tompaulcampbell All of that may be true but it's not an inflation problem.

[@andersbodin1551]

Its not inflation if the salaries are not going up :P

[@victoranjos9426]

someone talking about finance without taking political sides… THANK YOOOU!

[@dazedandconfusd]

we are facing a long term inflation problem.

[@Danny_6Handford]

When I first learned how the economic cycle works and how money is created, at first, I could not believe it. I felt somehow betrayed by the system. I was so disappointed. All the added acrobatics of creating credit and controlling interest rates and then having the system collapse in a depression just so the cycle can be repeated is a clever way that a few elite individuals (members of a “special and privileged club”) have figured out how to take advantage of other people’s labour, productivity and ideas. It causes so much unnecessary human suffering and pain! Throughout modern history humans have always competed with each other to try and get other humans to serve them either by force or by indoctrination including religions and in more recent history by marketing and advertising. Class systems have always been part of human civilizations. Once the idea of money was developed by humans, the idea of lending money for a fee quickly followed and following that idea, the idea of just creating money out of nothing (printing paper or entering digits in a computer) and lending the money that was created is what an elite class of people managed to convince the rest of us is a legitimate way to do business. It is basically a clever trick to counterfeit money used by an elite class of people that developed the system mainly the bankers and the banks. It may be a kindlier gentler master slave relationship but the borrower is always a slave to the lender. I did not learn how the modern money system worked and about the monetary fractional reserve system for creating money until I was well into my forties. This system is also referred to as modern money theory (MMT). Most of us are not aware that when a private commercial bank loans money, it does not loan the money it has on deposit, it simply creates new money for the loan by entering the numbers onto its balance sheet. This is known as the fractional reserve system. Fractional, because the bank actually has to have a small percentage of money on deposit to be able to create the money for the loan. Depending on the bank and on current banking rules and regulations, the amount required to be on deposit just need to be a small percentage (typically less than 10%) for every dollar the bank can create for a new loan. The lender then has to pay back the money that was created by the bank plus the interest which is money that was not created and is compounded meaning it continuously increases exponentially until the loan is paid back which can easily double or triple the amount of the original loan. Thus making the system a sophisticated Ponzi scheme since more money in the form of more loans (that is debt) has to be created to be able to pay off the new loans and the ever increasing compounded interest. Governments should not be allowed to borrow money from private commercial banks and private commercial banks should not be allowed to create money. Governments should have the power to create all the money required to run the country and the government does not need to borrow money from private commercial banks and by doing this the government will not have a national debt it needs to pay back to the private commercial banks. Furthermore, private commercial banks should only be allowed to lend a percentage of money that they actually have on deposit to individuals or businesses for a fee which would typically be an interest rate for the loan. If the money is created by the government, the benefit and advantage is that the government does not have to pay interest on it and it does not have to pay it back to private banks. The people that elected the government can keep them in check to make sure an appropriate amount of money is created and not devalued by inflation. Creating the nation’s money and controlling the quantity of money can be argued to be a sovereign government’s most important job. Controlling the quantity of money is the single most important factor in controlling the economy. Delegating or giving this power to private banks weakens the government and allows private banks with private interests to influence government policy. It is often argued that the government should not be in the banking business but in reality, the banks should not be in the governments business and the government should be the only authority that can create money, not the private banks. Governments do not have money. Governments create the money when they need to spend it. Whether the government creates the money itself or borrows the money from private commercial banks which create the money for the government, the government creates money when it spends. When governments create money by borrowing the money from private commercial banks which create the money for the government, the real limit on spending is not an artificially imposed debt ceiling but a lack of labor and materials to do the work, leading to generalized price inflation. Only when that real ceiling is hit (lack of labor and materials) does the money need to be taxed back, but even then, it’s not to fund government spending. Instead, it’s needed to shrink the money supply in an economy that has run out of resources to put the extra money to work. If governments are allowed to create the money themselves without borrowing money from private commercial banks, the limit on spending will still be lack of labor and materials which will still start leading to a generalized price inflation at which point money needs to be taxed back not to fund government spending but again to shrink the money supply in an economy that has run out of resources to put the extra money to work. This is an important concept to understand which is why I repeated it. In the United States, Article I, Section 8, of the Constitution gives Congress the power to create the nation’s money supply. Congress needs to exercise that power. The key to restoring the United States’ economic sovereignty is for the United States to reclaim the power to issue money from the commercial banking system that acknowledges no public responsibility beyond maximizing profits for its shareholders. Bank-created money is backed by the full faith and credit of the United States, including federal deposit insurance, access to the Fed’s lending window, and government bailouts when things go wrong. If the people of the United States (we the people) are backing the currency, it should be issued by the people through their representative government. Today’s United States government, however, does not adequately represent the people. Almost all countries have a privately owned Central Bank. The Federal Reserve in the United States is a private bank. The Bank of England is a privately owned bank and all the European country Central Banks are privately owned including Italy, France, Spain, Greece etc. Today the vast majority of the money supply in Western countries is created by private bankers. That tradition goes back to the 17th century, when the privately-owned Bank of England, the mother of all central banks, negotiated the right to print England's money after Parliament stripped that power from the Crown. When King William needed money to fight a war, he had to borrow. The government as borrower then became servant of the lender. There is much more information on this topic on the internet. If interested try Google searches for: “money as debt”, “debt money” ,“web of debt” “the hidden secrets of money”.

[@Chumlee1000]

Wasn't this on one of the debt as money documentaries?

[@Kuzyapso]

This comment is better than this terrible video

[@ruidykeman7422]

Danny there is a concept where u effectively keep the status quo but switch out the private banks for mix public private and require them to use 1/2 of there cash to build infrastructure. I was in my early 20’s when I learned how money is made now some 20 years on I still fell it’s all a cheat. Looking behind the Carten leaves a bad taste that never sesames to leave and some times it feels like no one gives an f. nice to see your comment.

[@braincomplex]

+1

[@pietersteenkamp5241]

Fantastic comment Danny and all i would add is that non of the banks you think are private technically are; unfortunately we just have democracies so flawed and people so misinformed that our parliaments, and the US congress, does not effectively exercise it's actual and legal mandates over these institutions.

[@Ollie09000]

ill just say this. look at gold in terms of yen... that being said as a holder of gold. please make my day implement MMT so i can retire young

[@flickdasher1775]

implement it? mmt IS the system we use now!

[@Rob-fx2dw]

@@flickdasher1775 That's Wrong. - That MMT description that it is the system today is false. There is no government issuer of currency in the USA. New currency in the US is created by the government Treasury creating bonds and selling them to the Fed who pay with new dollars the Fed creates. The government is then in debt for those dollars and when the bonds mature they have to pay the Fed for them. They pay with existing money in the system that they collect from the private sector by taxing people like you. The national debt is not a real asset at all and 'financial assets' themselves are only a claim on real assets and are worthless in themselves. No increase in financial assets creates wealth for the economy but merely transfers wealth from one holder of the financial asset to someone else. In the case of government and the Fed creating new money and new national debt the result is government gets to spend that new money before anyone in the private sector and when it does it takes goods and services from the private sector (ordinary people) to use for itself. That leaves fewer goods and services for you to buy. Kleton does not tell you this and tells you that the dollars are created by government and don't have to be paid back. It's straight out MMT lies that the national debt does not have to be paid back because it matures and that means taxpayers have to pay for it since government has no income of it's own other than taxes and no other way to pay for it.

[@LMGunslinger]

You're assuming there would be a demand for gold...

[@frankpriolo7735]

If, as MMT claims, the government can print unlimited amounts of money, why are we paying taxes?

[@ANTEGEIASASRE]

to maintain demand for the dollar would be the answer

[@peterponcedeleon7908]

MMT is not new and has been tried many times throughout history and has failed everytime. The idea of something for nothing always ends in a very bad way. LOOK around, our paper money is turining into confetti. This lady is off her rocker.

[@lopo8000]

Mike moloney disliked the vid

[@zDoubleE23]

Itd be nice if he debated her. Man is legend.

[@swayp5715]

That's hillarious. Waiting forever for silver to go up.

[@pedro97w]

Because Maloney has a brain

[@mladen89ftn]

The issue with inflation, as I see it for the US dollar, is that there is the possibility (however remote) that the USD can be dumped as the global reserve currency, leading to overloading of the currency into the domestic market.

[@andyy6481]

can you make an update video, as of now we are in another oil shock as of 2022?

[@PathfinderHistoryTravel]

No one seems to talk about the cultural changes MMT may cause. MMT-Why should I work hard? The government will print money and give it to me. Traditional view-Money is a scarce resource and I have to bust my but to earn it.

[@dickgoblin]

Mmt is not just print money and give it to people Large government debt isn’t the precursor to collapse that we have been led to believe it is; Countries like the U.S. can sustain much greater deficits without cause for concern; and A small deficit or surplus can be extremely harmful and cause a recession since deficit spending is what builds people’s savings. This is not to say that there should be not buffer. Especially if the regulatory body is politcal. Governments need to make sure that these spending packages are not inflationary. Such as proving that sure the money supply is going to public projects that will generate greater spending. This might be the most wishful part of it but the statement that debt will not necessarily lead to inflation is not controversial

[@yamahantx7005]

No, gov't deficits are not consumer earnings. Sure, what I spend is someone else's income, but gov't doesn't have any money to spend in the first place. A deficit is not the solution to unemployment. Productivity is where it's at.

[@cesare7101]

Interesting video! The more I hear people talk about the economy, The more convinced I am that the vast majority don't understand what money is, So if people don't understand what money is, they can't really discuss what tax is then people are not on the same page and then ideas get pulled in different directions. People tends to learn economics from textbooks and that is fine for basic stuff, but to understand it at a deeper level people should start learning more Psychology, Philosophy and Math.

[@HankTheTank23]

So you think MMT is a good idea?

[@williamsmith9921]

Wall of text, but I feel like the topic warrants it, even for a KZbin video lol. Firstly, there argbuably isn't anything modern about modern monetary theory, it is simply an extension of a monetarist approach to managing the money supply given the state of certain economic variables or criterion. One could consider it the inverse approach that central banks took post late 70s inflation years, in particular, where Volcker's fed began targeting the money supply vs the prior approach of bank reserve prices. And in that respect it worked, albeit with output pain, inflation was tamed. So MMT, could be viewed as the flipside of that policy approach fused with fiscal policy, whereby the 'problem' one wants to solve is low inflation (or high real debt), no doubt increasing the money supply while directly financing fiscal expansion is inflationary, and so no doubt you would get higher nominal gdp and inflation, and the latter might be the painful side of the equation depending on what one wants to target, if one wants to inflate away the real debt burden and stoke nominal gdp along the way, then MMT will do that. Just who knows how high inflation might run, much in the same way Volcker didn't really know how high rates might rise when targeting the money supply. But tbh, at this point there aren't that many options to lower real debt outside of the inflationary approach, I mean you could liquidate everything ala Andrew Mellon and cause a depression, that would work lol, just be incredibly painful and scar the economy for decades. Then there's MMT which given one doesn't know how inflation could get out of control could be just as bad but on the debasement of the financial system side. But who am I kidding, Independant central banks will not pursue either of these policies. The most likely scenario, and its playing out right now is japanification, characterised by high asset price inflation, low output inflation and a low growth economy, but due to better productivity gains in new technologies at the current point in time, the low run rate is probably output growth of 1-2%, and tbh there's not too much to dislike about that, albeit stunted wage growth relative to asset prices, and spiralling inequality. As dystopian as that sounds, prior policies and cumulative household spending choices over the last few decades have made that imo as likely a scenario as any. Interesting times, to see it talked about more openly on a platform like CNBC is positive.

[@soulfuzz368]

What a refreshing take, thank you

[@kurtrawson3068]

Stephanie Kelton, it is wrong to compare to Japan's Debt to GDP of 240%!!! JAPAN IS THE LARGEST CREDITOR NATION IN THE WORLD, which means it is owed more than it owes, therefore, Japan's 240% Debt to GDP is irrelevant. THAT IS WHY JAPAN'S BONDS ARE CONSIDERED AN INVESTMENT HEAVEN in times of crisis. In other words, if you net Japan's Bonds owed WITH Japan's Financial Assets held, it nets positive ergo Japan's debt is NONE !!! So, yes, Deficits don't matter until they do. You can stimulate the economy and run a deficit for more years to come, but it's a huge gamble to dismiss the risk. US IS THE LARGEST DEBTOR OF THE WORLD. Currently, US NIIP is - $8 Trillion, while Japan NIIP is + $3 Trillion. You probably picked the worst country as an example!!! en.wikipedia.org/wiki/Net_international_investment_position

[@Achrononmaster]

By the way "MMT" is a terrible name. It is not a theory, it is a DESCRIPTION of monetary dynamics.

[@robertaylor9218]

That is what a theory is, well it's a closer approximation than the colloquial one.

[@loweman25]

Anybody on here making the connection btw David Graeber's book "Debt: The First 5k Years"? Greaber dissects the history of debt, what ideas informed it then and how it constitutes itself now. He's an archaeologist so it's more of a cultural excavation of debt, but it points to the fact that debt itself is a useful cultural convention that now is being used to stifle culture(or for the Marxists "cultural reproduction") imo. Interesting stuff. Clearly the national debt is nothing like a household's debts, but it's tough to understand macroeconomics when you live in the micro. The only candidate that seems to be on to this aside from Bernie is Andrew Yang, but I wouldn't say he's a MMT guy completely, if at all. But he does seem to intuit the need for a more expansive idea of what capitalism and debts can accomplish, and how measures like GDP and growth aren't showing us the right way forward, much like Japan's seeming dumpster fire growth #'s , yet still seems to work fine enough for it's people.

[@pricephillips2498]

Andrew came here from Graber too. But as Graeber mentions at the end of the book, there are other alternatives to orthodox fiscal theory than MMT.

[@terrance7864]

so is the thesis that MMT will not create demand-pull inflation such that fed/congress raising rates/incr. taxes will be ineffective? does that imply they believe MMT only leads to cost push inflation and in that case the only curbs needed for inflation are diplomatic / asking suppliers to slow down? what if the increasing $ supply generates demand-pull and cost-push inflation? more taxes, high interest rates and telling suppliers what and when to produce?

[@JohnnyJr396]

Ok , if anyone is familiar with Mosler’s thoughts could help me with a few questions , let me know . Thanks

[@Longblade13]

what do you want to know?

[@JohnnyJr396]

Longblade13 I forgot about this post. I’m trying to learn the details of MMT and I’ve picked up a little since this post, I think anyway. If you don’t mind telling me where I’m right or wrong I’d appreciate it. 1. So Treasury bonds are basically interest savings accounts . China for example, when we buy goods from them , they can do a few things with the dollars we spent. One thing they can buy is Treasury bonds. When the bonds mature their money is transferred to their reserve account at the fed and then decide what to do next. 2. The reason for Treasury bonds are not to borrow for spending. They are a way for the fed (central bank ) to control the interest rate. When reserves at commercial banks are too much , the funds rate drops. The fed will remove reserves for Treasury bonds to cause rates to rise and do the opposite to make them drop. 3. Number 2 is a way to expand and contract the money supply. 4. With deficit spending. Is the only way for the federal government able to spend is by way of Treasury bonds? I’m sure the government can spend directly, it’s just we seem to believe we have to issue bonds so the government can borrow money to spend. 5. Can the government spend directly to government contractors directly? 6. The total amount of Treasury bonds = the total deficit? Which is untaxed government spending? 7. Banks do not create money? Only credit. When a loan is created. The bank that created the loan , their reserves will drop. The bank where the loan is deposited, their reserves increase. When the original bank is paid back , the money created out of thin air is gone. The bank only made money by the interest that was paid back with the loan. The base money supply is increased by government spending 8. The Fractional Reserve Banking practice isn’t really used , because although banks have to maintain a minimum reserve, they borrow from other banks or the fed if they become too low. 9. Fractional Reserve Banking was really on the gold standard? What was the constraints from FRB? Was it because if the government and banks increased the money supply so much people would redeem their gold? 10. On the FRB, if everyone turned in their cash , would there have been enough gold for redemption? Even though there wasn’t enough gold the possibility of people redeeming gold kept the money from expanding too much too fast? Sorry for the long post. Thanks!

[@brbarlow195]

Thought this was another hit piece but was very surprised... very good piece

[@Chumlee1000]

Not once did she taken account for the value of the currency under this type of inflationary pressure. Currency devaluation. How many times has Germany reset currency in the last hundred years? Japanese yen .009=$1.00. Paper money eventually returns to its intrinsic value -- zero

[@infinitesingularity3835]

So we back the dollar to gold again? What is your proposal?

[@Danny_6Handford]

@@infinitesingularity3835 See the proposal that I have posted in the comments

[@infinitesingularity3835]

Link?

[@zDoubleE23]

Yes... back the dollar with gold. That's the only way govt cant steal your money through inflation. When we left the gold standard in 1971, cost of living skyrocketed. Theres a reason Byzantine lasted longer than western rome, its because they had a better monetary policy.

[@Chumlee1000]

I think it would sure put some limits and restraints on runaway government spending. Check about any debt chart and it does the great hockey stick after 1971. I think its gonna take a think tank full of smarter people then I to figure this one out.

[@ModernRelic69]

A sugar high is still a high!

[@RuinDweller]

kzbin.info/www/bejne/bZTLoGqklsqZlc0

[@Remindor]

The US is facing a long term inflation problem. They constantly kept increasing the debt ceiling! So much so that they had to suspend it entirely! The government, companies and individuals are constantly borrowing new money into existence. Each time new money is injected into the economy via bank loans or awarded to private citizens via government contracts or salaries, a matching amount of debt is being created at the same time... And because the debt needs to be paid back with interest, it means that there will always be more debt in existence than there will be currency. The system is founded on inflation. You always need to print new money in order to pay back the debt of the previous generations. She obviously did not watch Hidden Secrets of Money. Also, CPI is not inflation! The critical question which economists are dancing around is this: Who is getting most of that newly printed money?

[@LibertarianRF]

Stealing from people to solve problems isn't a solution

[@james192599]

You can't steal from someone who made unearned income from economic rents, resource theft and surplus value extraction.

[@TerrariaGolem]

@@james192599 exactly

[@TerrariaGolem]

Read the comment From James

[@eoghan.5003]

Whilst I agree that the government doesn't need to account for every dollar it spends, I also think that some of the ways we can raise money - taxing wealth, cutting military spending, perhaps even taxing Wall Street speculation - are beneficial in and of themselves. My question would be: is the US government in any way unique in its ability to deficit spend without large negative consequences? Japan was used as a positive example here, are all national governments (who print their own currency) equally able to do this?

[@RuinDweller]

You need 3 things: - Monetary sovereignty (The ability to issue your own currency) - A 'Fiat currency' (One that is 'by decree', and not based in the value of gold, oil, or any other finite commodity) - An economy which can absorb the influx of money that you want to spend into it.

[@eoghan.5003]

@@RuinDweller I live in Scotland. If we went independent with full monetary sovereignty (no joining the Eurozone etc) would we be able to do MMT just like the US, or does the fact that the US dollar is the major global reserve currency change things?

[@Basta11]

@@eoghan.5003 US being the reserve currency is a source of demand for the USD. The demand of USD gives the US more flexibility to deficit spend (introducing more money into the system) without causing much inflation as the extra cash will be absorbed by other nations by exporting to the US. In a small underdeveloped country, they don’t have as much flexibility because their currency does not have as strong a demand. Introducing more money could cause inflation sooner as they have less supply capacity to meet the demand.

[@killer-bee7284]

Bernie or AOC please run for 2024 🥺🥺

[@nathanscottshoemaker2554]

Stephanie kicking ass.

[@The_General_Zubas]

LETS USE THIS TO GET THE ECONOMY BACK ON TRACK! Amd Medicare for all... and College For All... and a lot of things that America needs.

[@0zoneTherapyW0rks]

The 40-yr. Wall St/capitalist revolt: "The bank strategy continues: “If we can privatize the economy, we can turn the whole public sector into a monopoly. We can treat what used to be the government sector as a financial monopoly. Instead of providing free or subsidized schooling, we can make people pay $50,000 to get a college education, or $50,000 just to get a grade school education if families choose to go to New York private schools. We can turn the roads into toll roads. We can charge people for water, and we can charge for what used to be given for free under the old style of Roosevelt capitalism and social democracy.” This idea that governments should not create money implies that they shouldn’t act like governments. Instead, the de facto government should be Wall Street. Instead of governments allocating resources to help the economy grow, Wall Street should be the allocator of resources - and should starve the government to “save taxpayers” (or at least the wealthy). Tea Party promoters want to starve the government to a point where it can be “drowned in the bathtub.” But if you don’t have a government that can fund itself, then who is going to govern, and on whose terms? The obvious answer is, the class with the money: Wall Street and the corporate sector. They clamor for a balanced budget, saying, “We don’t want the government to fund public infrastructure. We want it to be privatized in a way that will generate profits for the new owners, along with interest for the bondholders and the banks that fund it; and also, management fees. Most of all, the privatized enterprises should generate capital gains for the stockholders as they jack up prices for hitherto public services. You can see how to demoralize a country if you can stop the government from spending money into the economy. That will cause austerity, lower living standards and really put the class war in business." michael-hudson.com/2017/03/why-deficits-hurt-banking-profits/?fbclid=IwAR06awK0L-3z172I_q003EZMVaoAYfqxNg0xqjWXXtFb9mmWMdhOTwqnE4I

[@samuelspencer5047]

thank you for thoughts and sharing, this is 'food for thought'.

[@christianlibertarian5488]

Absolute BS! Free markets allow CONSUMERS to dictate terms of trade. You seem to think government will do it fairly and equitably. In the history of humanity THAT HAS NEVER BEEN TRUE. Who is going to govern? NOBODY! YOU WILL BE FREE TO DO AS YOU LIKE!

[@christianlibertarian5488]

@@bamboozled1618 Amazon and Walmart are absolutely players in free markets. Walmart exists because it consistently provides what customers want. Kmart didn't, and now it is a memory. Government programs never die, even when far beyond a reasonable rationale for its existence. Why do we have farm subsidies? We can get rid of all of them, and have lower prices, but they live on in government zombie land. I used capitals because your statement was outrageous. The United States was literally based on the belief that we should get rid of government so that we could all be free.

[@james192599]

Love Michael Hudson. He is by far the best MMT economist and probably one of the best economists alive today

[@manboob5000]

@@bamboozled1618 out of curiosity, do you ever wonder why there aren't many if any governments that adhere to a policy of "we will limit our authority for your benefit"?

[@samuelspencer5047]

Thank you for your understanding regarding the discussed topic.

[@mattlaroche4228]

Stephanie explains that macro economic theory supports that a deficit created in the federal budget creates wealth in the private sector. The interest payments made on debt generate wealth for the bondholder. HOWEVER, there is one major caveat to that theory. The debt burden must be absorbed by the private sector within the national economy. Otherwise, wealth seeps out of the domestic economy and into foreign coffers. If the democrats want to truly kick-start the economy with a huge stimulus bill like the Green New Deal, they should literally sell it to the people in in the form of high yield bonds available to individuals and investors alike.

[@willrichardson519]

No, government net spending is private net surplus. Assets aren't a burden, are they?

[@Longblade13]

What you are describing is accomplished by a Job Guarantee within the MMT framework. As long as the recipients of JG spending are producing and can purchase real goods and services, "wealth" won't really leave the domestic economy in a dangerous way.

[@raglanheuser1162]

but.....what about the interest payments on the debt?

[@christianlibertarian5488]

The interest payments can also just be made by the gov't writing an un-backed check. This is where the inflation rubber hits the road.

[@gabbadebabba9002]

If you hold a goverment bond you will still get the payments in Dollars. The difference to the system right now would be that the Dollars used for the payments come, more or less, directly from the FED. Right now the goverment needs to get their money from the private sector (which gets it from the FED). With MMT the goverment gets the money directly from the FED, therefore there would be (simplyfied) no more newly issued bonds from the goverment.

[@raglanheuser1162]

@@gabbadebabba9002 thats true, but not the point, which is that debt is money spent subsidizing bond holders with money that could be spent doing something more useful. sure you can print the money, i'm not opposed to it, but you will cause less inflation per unit trillion dollars spent if you dont have debt on top of that to cover. unless you contract the money supply with taxes. but if you're gonna tax people then why not just raise all the money with taxes. or how about do both. raise money with taxes and in any given year print whatever you need to keep the gov from going into debt.

[@gabbadebabba9002]

@@raglanheuser1162 "debt is money spent subsidizing bond holders with money that could be spent doing something more useful" Great point!! I got the same conclusion as you in the end of your text. Doing both seems to be the way. One side note maybe: Bonds can be used to contract the money supply in the short run. If the households buy the bonds, the give up some money to the goverment. If the Goverment doesn´t spend as a result of this the money supply contracts. Therefore there might still be some use for bonds under a MMT regime.

[@dachanist]

No Negative consequences in Japan... the country known worldwide for people dying from overwork. The country where rural houses are given away for free despite the whole country only being a small island. Japan, the country whose last major export is cars and radiation. Japan, the country that says "This isn't dumb, Donald Trump is doing it!"... Sorry, that last one was Stephanie Kelton, not Donald Trump. Sorry, got confused again it was Stephanie Kelton not Japan.. My mistake. Too many dumb things all in one place I get them mixed up. Anyways.. Nope, no issues in Japan at all and there's no reason to believe that nothing wrong will get worse during the global slowdown that you admit is happening right now.

[@GDWII]

You literally just said that the government can just print money if it needs it, and then also said one of the cornerstones of your theory is that you have to guard against inflation? How do you do that? Do you just lock yourself in a room?

[@elsiegel84]

No, she discussed that. Listen again if you didn't get it, she was very clear.

[@oceannavagator]

She never mentions interest on our debt and as the US has to borrow more and more money they will have trouble finding those who are willing to settle for 2% interest. In addition, every dollar printed, devalues the dollar in your pocket.

[@cecilevans9247]

Oh god she forgot something...

[@qinby1182]

Every dollar printed do not devalue the dollar in your pocket unless it creates inflation OR if it creates growth. It all depends what you use the money for. As the US does, spend it on Afghanistan, Iraq, Libya and aircraft carriers you are probably right but it does not have to be that way.

[@wwlee5]

No, she didn't mention it. Of course, we'll find out if we'll have trouble raising cash if nobody buys treasuries on the market. it happened the last couple of years.

[@letsomethingshine]

As long as other countries (and people in those countries) are willing to buy the con, you gotta keep selling it.

[@oceannavagator]

@@wwlee5 It's not a matter of whether or not people will buy bonds, it's the interest rate that they will accept. Imagine our debt payment at 14%.

[@DG-rv9ph]

Well, I guess they're not pretending the imaginary debt ceiling is a thing anymore. Print print print, inflate inflate inflate, tax tax tax

[@TJ-TJ]

Need to get rid of people like you.

[@SThrillz]

Did you miss it all?

[@cortomaltese5038]

Japan trade balance is for decades positive. They sell high tech products on higher margins. They can repay their debts with no problem.

[@B0RN2RACE100]

I don’t think the feds should be spending more money than they’re taxing because that’s a tax we’re putting on our future generations (like our parents did), technically that’s unconstitutional since they did not consent nor voted for it. Neither did we.

[@trailguy]

So should we borrow more and more forever? Is it folly to contemplate the distant further? Can all countries do this or only the country with the world reserve currency? Will the USA always have the world reserve currency?

[@robertaylor9218]

She did say that there are limits and those limits are identified more by economic stressors than specific numbers. The reserve currency point is a good one, however.

[@xyzsame4081]

MMT is NOT borrowing. it means _debt and interest free money._ - In most cases gov. debt is in form of bonds only rarely in form of bank loans. Gov. bonds from first world countries are a very popular investment vehicle for the wealthy and rich - never mind the pearl clutching over gov. debt. MMT means that the gov. USES the privilege of money creation (Richard Werner calls it debt and interestest free money). Usually the banks create money every time they give out a loan (Fiat money). But there are other ways to inject money into the economy, although Big Finance does not like it that they are used. so they are usually only used in times of crisis. (like war - see Bradbury Pound, or QE for the criminal banks).

[@zDoubleE23]

Id love to see her debate with someone that actually knows what theyre talking about. Shes mentioning the problem with inflation (printing of more fiat currency) and her solution is printing more money?! Itll make poor people even poorer. What a joke. You cannot print yourself wealth. If that was the case, Zimbabwe would be the richest nation in the world.

[@james192599]

She did not say to print more money. She said that a country cannot default on their own sovereign currency. btw the fed doesn't print money it just adds numbers on a computer into different bank accounts. The treasury prints the actual money but then again it also burns the money too. It is impossible to default on a National debt that is denominated in a countries sovereign currency. This is to say their are countries that have to peg their currency because they have to much foreign debt.

[@schusterlehrling]

She did not say that at any time. She said that a higher debt does not automatically cause inflation. If so, the 50ies and 60 ies would have seen hyperinflations in the USA or on Japan since 1990. So it is possible to hold on or even to flourish with an even bigger debt, but you need at the same time keep inflation low. Only if that is not possible, the debt causes even higher inflation and we will experience a giant recession.

[@zDoubleE23]

@@james192599 a country cant default on its own currency, but creditors can decide not to loan them money in their currency which is what happened to argentina.

[@leealexander3507]

That's why Congress voted to sell bonds for deficit spending instead of just doing it. That was so long ago it was even before I was born.

[@shaulkramer5293]

Dear god... Where is the VALUE of the dollar come from Dr Kelton? Why did the dollar have any value in the first place? If you can’t answer that basic question, then most of the policy prescriptions are automatically null

[@cecilevans9247]

Can this person run for president instead of Bernie? He can still be a hype man. She seems to understand economics a hell of a lot better than he does. She seems more reasonable too.

[@letsomethingshine]

No, name recognition is the most important thing in politics and capitalism. They would easily find one personal-life flaw in her and the media (owned by the very rich) would eat her alive if she wasn't ready.

[@cecilevans9247]

Well it's not like we can't find flaws with Bernie. People generally don't take him seriously though.

[@AChungusAmongUs]

"They (tax cuts) disproportionately benefit the folks at the very top..." We already have some of the lowest tax rates on the lower and middle income classes in the world. Certainly lower than the Scandinavian countries that Bernie likes to point to. Any significant tax cuts would naturally disproportionately effect the people who pay most taxes, specifically the upper middle class and above. And economic stimulus doesn't only work if the people directly benefiting from the tax breaks spend the extra money they get to keep. When that money is deposited in the bank, the bank then lends that money out or invests it in order to generate revenue.

[@MCWaffles2003-1]

@Matt Weber you say that like america doesnt also have some of the lowest taxes on the rich as well. a 37% marginal rate pre-deductions/loopholes is peanuts

[@johnd4348]

What she does not say about defacits is that most of that money is going to transfer payments and entitlments. Not investments in infrastructure and tangible things. That money disappears for ever.

[@consciousbeliever2470]

Money doesn't disappear. It circulate in different ways throughout the economy.

[@johnd4348]

@@consciousbeliever2470Some needs to circulate in my direction. Obama directly destroyed the American economy, and so will Bernie Sanders and the Left if they ever get control of Gov again.

[@TheGeneralCase]

It disappears in the pockets of the ultra wealthy. That's the issue. If it would go to infrastructure we'd all benefit. It doesn't.

[@bethanyhunt2704]

FINALLY!! A mainstream media company covering the truth about fiscal economics! So SICK of this bs about governments spending "on the credit card", as Obama said, as though a government is like a household. And using the deficit and govt. debt as an excuse - it's only that - for not spending on social services!

[@Rob-fx2dw]

Yeah Sure. If you are badly informed enough to believe that then you probably would believe in Santa bringing the gifts at Christmas. The reality is government is a group of individuals headed by politicians who act primarily in their own financial interests and say anything to get elected and you believe that their idea of expanding the money supply by funding deficits to pay their spending programs through borrowing is the way to go. That, in spite of the fact that it is banned law by the same politicians when any individual or corporation does it because it does not work. The proponents are called frauds and they are usually jailed. It's also called bankruptcy when anyone but the Central government does it. It's even called bankruptcy when a state government does it. But just go on foolishly believing those centralist economists like Kelton who play the political game at all the people in the economy's expense.

[@srercrcr]

Debt has a negative....Interest Expense.

[@tidbit1877]

I agree, thats why they should print the money as Quantitive Easing rather than going in debt to put more money out there.

[@elsiegel84]

@@tidbit1877 That was a totally senseless and incomprehensible statement. You understanding of the topic is right up there with a red brick.

[@northstar1060]

@@tidbit1877 QE goes to the banksters ------people need lower taxes and lower property taxes and freedom from paying tuition , health care , etc --that puts money in their pockets not the banksters

[@james192599]

A government has the right to cancel any domestic currency debts so how is that a problem?

[@srercrcr]

@@james192599Are you suggesting defaulting on our obligations?

[@etchalsey]

Yes! More videos like this please CNBC. I actually learned something

[@genosimms8816]

Did you really though? Try searching Nobel prize winning world famous economist Milton Friedman; he's pretty much the other side to this plausible, tempting, and shiny coin... Just listening to one side of any economic argument is never a good idea. In fields like physics, math, chemistry, etc. sure one source is usually enough, but not in economics - it's just a different sort of science all together. I really hope you check out and listen to an hour or Milton next time you're doing house chores or something of the like. Well worth your time.

[@mrmorhouse]

I'd vote for her.

[@MattCRHughes]

Only need to watch the opening 15 seconds to see her give the game away. I do believe the US has a long-term inflation problem. In fact, I think the US has a medium-term inflation problem.

[@Andre_XX]

Modern Monetary Madness.

[@Your_Wife.s_Boyfriend]

What an intelligent Cougar.

[@tomasamaral9042]

in brazil there's a huge debt that doesn't let any govern since Sarney to spend on basic public services. debt can be problematic

[@ReVoltAgefilms]

So what about the fact that the US dollar is tied to oil? What if Russia, China, Iran and Venezuela with this largest oil reserves, decide to create their own market?

[@miker2749]

Usa also robbed mexico out of its oil! .

[@jamesfarrell7465]

If Magic Monetary Theory worked, Zimbabwe would be the most prosperous nation on Earth. It is among the least. Case closed.

[@TJ-TJ]

Wrong.

[@jamesfarrell7465]

@@TJ-TJ Care to elaborate? ...........................All i hear is crickets...............................

[@georgeemil3618]

@@jamesfarrell7465 Zimbabwe is highly dependant on imports of other nations. No other country uses the Zimbabwe currency. Compare that to other major economies like Japan, the EU, the UK, Canada, Australia and the United States. Much of these economies also rely on the US being strong. And if all these economies are also practicing MMT, skeptical currency investors jump around these currencies much like they do now.

[@jamesfarrell7465]

@@georgeemil3618 : Zimbabwe's currency is the equivalent of Monopoly money. It's worth less than the paper on which it is printed. That's why no one uses it. In the 1970's, when Zimbabwe was Rhodesia, it had a thriving economy and was a robust exporter of food to the rest of southern Africa. Today it struggles to feed its own. THAT is the long-term effect of MMT.

[@georgeemil3618]

@@jamesfarrell7465 Nobody uses it. Exactly what I had stated.

[@anaeusrex2014]

Bernie Sander's is hereby recognized by myself as the interim president of the United States.

[@sirnate9065]

You, me, now we just have to convince the joint chiefs and we'll have a coup.

[@anaeusrex2014]

@@sirnate9065 Ha Right, I mean if a coup works in Venezuela, it could work for us to, with our regime.

[@rockycomet4587]

THIS IS MAGA COUNTRY!!! TRUMP 2020!!! GET ON THE TRUMP TRAIN!!!

[@josholiver7873]

End the FED, put it under the Treasury, audit and report the books. End private profit off public debts

[@christianlibertarian5488]

This woman points out the half-baked thought process of MMT. She even cites one of the prime examples of the failure of MMT (Japan's "Lost Decades"), and doesn't understand what she is saying. She doesn't seem to understand that money is NOT the underlying basis of economic activity, but that it is the allocation of resources that creates or destroys prosperity. Whether you tax directly and overtly, or through the back door of deficits, larger government slows the economy. She understands perfectly well that deficit spending stimulates inflation. She also seems to understand that central banks have their fingers on the jugular of the money supply. Yet she cannot seem to realize that if a government stimulates inflation with deficit spending, the central bank will counter that spending with higher effective interest rates. Inflation rates will stay low, but money for business investment will not be available through private banks. The net effect is that the more a government runs a deficit, the lower the investment by private entrepreneurs into new productive businesses. Friedman, Bernanke, Yellin all understood this. The larger a government, the fewer resources available to private enterprise, and the slower the growth.

[@Unclejamsarmy]

This isn’t a counter argument as far as I can tell. First of all, obviously there are tons of examples of periods of history in different countries with high deficits high growth and low inflation. There are also examples of the opposite. Obviously almost no one believes that govt investment isn’t sometimes necessary for future growth, meaning that too small of a government is also bad for growth. Secondly, as I understand it she’s saying that MMT monetary policy would depending on the situation, run high deficits without causing inflation or raising interest rates. Thirdly there seems to be pretty obvious examples of governments running high deficits with low interest rates and not causing significant inflation, the post great recession years in the US as the most obvious example. The sectors that saw significant inflation were the same ones that had significant inflation before and after the crisis: healthcare, education, and housing. I’ve taken some Econ classes and I’m well versed in politics but far from an expert on economics. What I feel pretty confident in saying is that one thing is clear: the doctrinaire conservative view of economics is clearly at odds with the historical evidence. I don’t have a clear position on MMT, but it sounds reasonable to me.

[@Unclejamsarmy]

And by your logic wouldn’t the best policy be perpetually low taxes spending and interest rates?

[@christianlibertarian5488]

@@Unclejamsarmy I think you need to retake your classes. Think down to what a government program that is not paid-for entails. It employs some group of people, and utilizes a certain amount of capital goods. Those resources are resources that cannot be used elsewhere in the economy. Regardless of where the government gets the cash, the resources are consumed. They are not available for use by the private sector. If the resources are "consumer goods," that is the end of the resource then and there. For instance, if the government buys a $100 million fighter plane, the engineers, factories, line workers, accountants, etc. who build the plane cannot make, say, automobiles, or machine tools. Resources in any country at any given time are finite. It is impossible for a new government program not to limit the productive ability of a country, regardless of whether it is taxed or borrowed for finance.

[@christianlibertarian5488]

@@Unclejamsarmy Yes.

[@Unclejamsarmy]

Christian Libertarian but you’re assuming that it’s always better for resources to be used by the private sector, which is essentially rejecting all modern economies and how they were built, as well as the vast majority of all economists, including most conservative economists. By your logic building the interstate in the Eisenhower administration was just wasteful and it would’ve been better to have those resources utilized by private industry right?

[@charliedaniels1]

Venezuela: “damn, we should’ve just printed MORE money...duh!”

[@MangaPen]

Read her book, she covers that.

[@luddity]

What about the growing trade deficit? Isn't that a concern?

[@TRICHOMETRIST]

PRE COVED !! "Unexpected events"

[@MushieDetails]

I thought the only reason America during the 50's did so well is because after the war all other major industrial countries were devastated both in infrastructure and governments being overthrown which conveniently let the only industrialized country involved in the war but not directly impacted on the homefront to take up all the manufacturing opportunities left by this void in the global economy and not due to any kind of government spending before the war. (Obvisously not so cut and dry but I'd say itd be the biggest contributing factor)