A TED talk
But do we have all the resources we need to do all that needs to be done? Isn’t all the destruction from climate change draining our economy? Isn’t the pandemic making our workforce weaker? Can we really trust our corrupt business and political leaders to use our resources to good purpose?
Great piece. I think many people understand the whole argument about the currency issuer not needing to “finance” an expense in its own currency. It’s not clear for me when you go on to say the statement below in regards to how the real resources are literally computed. I think a piece that goes into even more detail on how one would compute the real resources would be very insightful to my understanding of this specific part of MMT. Thanks for writing this, but wanted to ask for clarity on the part past the argument of needing to finance something and on to the method we use in practice to replace the “financing”.
“we should be asking: Are these things worth doing and do we have the real resources—the people, the equipment, the raw materials, and the technology—to do them? Will they make society better off, and do we have the political will to act?”
My compliments on the graphics. Outstanding communication. Who's idea? Who's the artist?
You killed it and while people were tweeting you all kinds of advice before your talk, I secretly hoped you would focus in on the resources part. Of course your book helped get me there, but the real world resources part is what most of us untrained non-economists understand. Thanks for plain language and straight talk.
Classis piece.Our world is increasingly precarious and government so far deliberately choose to fix the broken system.
What's more important than money is human capital.Without humans,nobody bring resources to the hands of us.We should pay them more.
We've already know poverty is lack of money not character.
Dear Professor Stephanie
Congratulations on your book The Deficit Myth which I bought & read the day it was released on Amazon's Kindle. Your commentary on removing doubts and apprehensions on Deficits was and will remain modern groundbreaking economic literature for times to come.
I have been trying to contact you since I read your book and finally managed to do so recently when I subscribed to your Substack link.
Here onwards I would like to introduce a macroeconomic model which I call Planned & Organized Deficit Spending or PODS in short.
A PODS economy also has the following assumptions:
1. No Supply-side lag, or no production lag
2. Commerce runs at No Profit No loss basis with some expensing allowed in the calculations of profit or loss
3. All commerce & banking are supported by electronic & digitized computer/telecom platforms so as to transact with
digital electronic monies/currency.
4. No taxes in the domestic economy.
The basic fundamental issue that a PODS economy rests upon is, that for every unit of demand, there has to be a simultaneous unit of supply available to be consumed across all goods, products & services being offered in the various markets that exist in any economy. This is required to keep inflation in check & at Zero.
PODS sees to it that money is a given in every market economy otherwise how would one enable producers & consumers to produce and consume simultaneously.
Thanks to Professor Kelton for sharing the text from her TED Talk and I’m looking forward to seeing it. Her research and analysis of MMF and “The Deficit Myth” gives us a great framing for how to tackle public sector funding for our country. However, I would also like to suggest two other issues that need to be addressed. First, if you ask a hundred citizens what is the purpose of our government, you will get lots of different answers and most of them will be wrong. Therefore, we need to agree upon the purpose of our government if we are going to unite around fixing what’s wrong with America. A good choice would be to use a truly “originalist” opinion with Alexander Hamilton’s concise summary of the Preamble to the Constitution (delivered in 1788 at the New York Ratifying Convention), “We are attempting, by this Constitution, to abolish factions, and to unite all parties for the general welfare.”
(James Madison defined “factions” as “…a number of citizens, whether amounting to a majority or a minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.” Factions are the bad guys and the baddest are the oligarchs).
Uniting enough of our fellow citizens with a common purpose is critical if we are to defeat the big (and little factions), and promote our general welfare. And we also need to add a 21st Century improvement to Hamilton’s proposed purpose, by appending “…unite all parties for the general welfare” with “using best practice-based solutions.” It’s just another way to look at Kelton’s TED Talk questions of “(a)re these things worth doing and do we have the real resources—the people, the equipment, the raw materials, and the technology—to do them? Will they make society better off, and do we have the political will to act?” In other words, what should our government and citizens do to meet our democracy’s purpose and what is the best way to do it?
The second suggestion that I have is that we need to address the elephant in the room that routinely gets in the way of any progressive change-corporate personhood. Over the last 50 years the oligarchs (and their government rent boys, media propagandists, lobbyists and biostitutes) have persistently misappropriated the rights and freedoms of our citizens, and they now possess sufficient power to quash virtually any single movement that gets in the way of their greed. Until the legal fiction of corporate personhood is ended, the oligarchs will continue to have power over our government so they can make more money quarter over quarter, regardless of the negative (and lethal) externalities that they force on the rest of the world. For example, before we can fix the worldwide rape of our environment IN A TIMELY MANNER, we need to sever the control that the oligarchs have over our public sector decision-makers, and that means ending corporate personhood. Then we must get about the business of implementing a role model election system (that includes 100% public campaign financing) as well as a role model education system, a role model healthcare system, and role model management of our commons which would include leading a global effort to avert the 6th Mass Extinction. We must stop pretending that we can prevent the oligarchs of money, carbon and war (and the other morbidly wealthy psychopaths) from extracting our wealth and harming our health before it’s too late.
Thank you. This is a breathe of fresh air! Has been my belief for so long. Good to see an economist articulating it so clearly!
So, to be clear, the US or UK does not create debt when it spends, eh. If the Federal Reserve issues Bonds then it creates Debt, together with a provided clock. Then, even that debt does not limit or require our children to pay it back, eh.
Those of "us" that are an engine light away from disaster live with fear. Fear of the absence of capital and the mounting debt. It makes it difficult for "us" to understand debt free money.
I've followed you for years and have sent your best lectures to my email list and everyone I know. I can't help but believe those in government love the concept of debt fear. It allows them to stay in power and keep the scary "mob" at home worrying about their debt. If they really don't understand "MMT" as just an expression of reality then they should go home.
As you have said many times MMT is not a theory it is an expression of how things work and have always worked. I really think we make a big mistake applying titles, capitalism, socialism, etc. It just encourages argument soon the realities fade away and we are left with argument. That makes Lawyers very happy, oh that's right, most legislatures are filled with lawyers. hmmm.
Your discertation should be sent to and read by all UK MPS and all Scottish MSPs. Infrastructure is needed like 5 tunnels between the several islands in Shetland, a d should be financed direct by the UK treasury in recognition of the vast sums accrued to the UK exchequer from the oil that flowed out of the Sullom Voe oil terminal.
But what about inflation? MMTers worry about that, right? Shouldn't we be extracting money from the economy instead of spending more into it at the present time?