Talking "Mostly Economics" with Dean Baker
A little over a month ago (March 27), I sat down with my longtime friend and fellow economist, Dean Baker to record a conversation for his new podcast Mostly Economics.
"Mostly Economics" is a weekly podcast — released each Thursday — hosted by CEPR Senior Economist and co-founder, Dean Baker. The show explores how US economic policies affect everyday lives — from household budgets to global trade relationships. Each episode delivers incisive analysis that cuts straight to the core of complex economic issues.
Dean and I had a wide-ranging conversation about MMT, the current administration’s economic policies, and the outlook for the US economy. The podcast just launched, and I was thrilled to be part of the debut episode. You can watch the whole thing on the show’s YouTube channel.
Nice podcast. Stephanie, I wish you had delved a bit deeper into the insight that the government's deficit is the private sector's surplus. In other words, where do personal savings come from? It can't be "bank money," which is created when banks issue loans. Every bank loan is simultaneously an asset and a liability that sums to zero. So the only other possible source of anyone's FINANCIAL wealth expressed in U.S. dollars is federal deficit spending. After all, no one has a Benjamin Tree growing in their backyard.
And I think it's worth differentiating between REAL wealth and FINANCIAL wealth. For example, a construction worker can create an enormous amount of real wealth and at the same time create zero personal financial wealth. Let's say this worker erects 50 house frames over the course of a year. That's a lot of real wealth creation (none of it his). But if this construction worker lives paycheck-to-paycheck, he amasses zero personal financial wealth. Maybe he has a couple of bucks in his checking account at the end of the year.
It seems to me that most Americans engage in magical thinking when it comes to money. If Americans can come to understand that the U.S. dollars in their savings accounts must come from somewhere, and that somewhere is the federal government's deficit spending, then perhaps they will be less hostile to our so-called "national debt."
Imposter Alert! Has any subscriber to Prof Kelton's substack been receiving emails from Ted Baiamonte posing as Stephanie Kelton and offering financial advice on her "private" substack? He misspells her last name as "Keltonn"(and there are misspellings in the notice). For example, when I received this current Lens newsletter, this "private" post, ostensibly from Prof Kelton, was beneath all who responded to the letter. When I signed in to reply myself, all the posts from this imposter disappeared. Have I been hacked or has Prof Kelton's substack been hacked (is that possible?)?
I have just now received three more emails with him posing as Prof Kelton.