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.
Thank you for doing Dean's launch Podcast. What "grinds my gears" though is the pass MMT leadership gives to Wall Street. You and Dean agree there is no need to fund fiscal expenditures by issuing bonds - but it is even worse than it sounds. Unless I am missing something, Treasury sells bonds to a very limited club of Wall Street Banks who charge interest to Treasury at a rate higher than the cost of money "borrowed" from the Fed at microscopic interest and laughably low collateral beyond the bonds themselves. What a Country! No risk and all gain. What a deal - but not for the 99.99999999999% of us.
I don’t think she and Dean were giving anyone a pass. What I heard is that we’re still at the stage where even though the Emperor has no clothes, the 437 (maybe 10,439 depending on who is counting) of us who have recognized that are officially “crazy”. Welcome to the club!
This is something I find confusing. If there is no need to issue bonds to fund spending, then whither the debt ceiling? Why all the sturm und drang over the government not being able to continue paying its bills whenever we approach the limit?
It sure doesn't seem made up, as all administrations, both Democratic and Republican, have employed extraordinary maneuvers to avoid breaching the debt ceiling. Various strategies have been suggested, including the trillion-dollar coin and invoking the 14th Amendment. It's pretty hard to imagine that this is some elaborate pantomime.
Stephanie can speak for herself, of course, and she does it very well but if you listen to this podcast carefully you will remember she ALWAYS puts her viewpoint in the context of resources. Resources. Write that on the board 100 times before going out for recess. Everything and anything we want to do has to be possible with the resources available. Limited resources will favor inflation if pursued too hotly.
MMT has money creation right. Full stop. They just don't follow through with their own insight that accounting is the tool to create money...and then apply that with a 50% Discount/Rebate policy at retail sale which would transform chronic erosive inflation into beneficial deflation and double the purchasing power of EVERYONE.
As for worrying about having the resources thats just caving to the "everything is unresolvably complex and worrisome" delusion of "free" market theoretics. You want change that benefits everyone? Double everyone's purchasing power and see if the market, restrained by a few ethical regulations that stabily secure the huge benefits of the above single policy, will provide the resources. And you could also implement a policy of a sliding scale percentage of gifted money required to be invested into eco-energy and infrastructure bonds...just to help that process along.
Or we can wring our hands and do nothing for a few more decades until there's billions on the left and billions on the right dying from converging crises...that could be resolved by integrating Monetary Gifting into the Debt ONLY system. The Martians must be laughing their asses off.
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.
As much as we would all like to know what Stephanie Kelton thinks about investing, she has too much integrity to ever put that in writing let alone unsolicited emails.
I believe the reason the post seems to disappear is that the posts on the Substack account aren't actually there. You are getting a phonied up message by email, and it is redirecting you to a non-substack page or an illegal substack page. But that message isn't on the legitimate Substack page for our beloved authors. Just delete the messages he sends. His redirecting messages come from "forum@mg1.substack.com" which appears to be legitimate. I'm not expert enough to know exactly what they are doing, but it's a sophisticated game. They just want people to call or text the phone number in the message so they can game you. This is the phone number:
Yes. I recognized the post as a scam as Prof Kelton is not about investing advice. I emailed her about this scam. Who knows if she actually reads our emails? So I posted the alert on her substack too.......does she read our comments?
I don't know how to report scams to the substack organization.
Also how can this redirecting forum message be legitimate if it is posing as Stehanie Kelton, spelling Kelton as 'Keltonn'?
I will listen to anything Stephanie appears on just to pick up on the nuances of how she’s talking about MMT but, gawd! I could not even get through this dreckful interview.
Baker contributed nothing. Starting with the Randy Wray was preaching “we can just print money” was stupid - and what does he mean by he was being “cryptic”? No, Dean, you were blundering.
I got as far as the weird digression into cryptocurrency and bailed. 10 minutes of my life I’ll never get back.
I love everything you explain to me. The implication of the stuff you've explained happens everyday in Trump-news. I need you to apply the basics to the current situations so I can apply the theoretical to the shades of reality.
Write more explanations more often!
You're the best, more people need to understand. I see more news using what you've explained about the 'details'. ...like the 'Interest side' of the US debt we have to pay and the higher yeilds on the Bonds we see on Squawk on the Street.
It may be hard for you to imagine but until you understand so called public debt is merely private market black ink you have nothing worthwhile to add.
Thank you for doing Dean's launch Podcast. What "grinds my gears" though is the pass MMT leadership gives to Wall Street. You and Dean agree there is no need to fund fiscal expenditures by issuing bonds - but it is even worse than it sounds. Unless I am missing something, Treasury sells bonds to a very limited club of Wall Street Banks who charge interest to Treasury at a rate higher than the cost of money "borrowed" from the Fed at microscopic interest and laughably low collateral beyond the bonds themselves. What a Country! No risk and all gain. What a deal - but not for the 99.99999999999% of us.
I don’t think she and Dean were giving anyone a pass. What I heard is that we’re still at the stage where even though the Emperor has no clothes, the 437 (maybe 10,439 depending on who is counting) of us who have recognized that are officially “crazy”. Welcome to the club!
This is something I find confusing. If there is no need to issue bonds to fund spending, then whither the debt ceiling? Why all the sturm und drang over the government not being able to continue paying its bills whenever we approach the limit?
The debt ceiling is completely made up and is used by conservatives to threaten spending.
It sure doesn't seem made up, as all administrations, both Democratic and Republican, have employed extraordinary maneuvers to avoid breaching the debt ceiling. Various strategies have been suggested, including the trillion-dollar coin and invoking the 14th Amendment. It's pretty hard to imagine that this is some elaborate pantomime.
Hello to my favorite and most esteemed economist Stephanie Kelton!
I understand that money can be looked at as debt but can it also be seen as the tool putting a value on scarcity?
What happens if an age of abundance comes about and anyone can have anything they need and want?
Stephanie can speak for herself, of course, and she does it very well but if you listen to this podcast carefully you will remember she ALWAYS puts her viewpoint in the context of resources. Resources. Write that on the board 100 times before going out for recess. Everything and anything we want to do has to be possible with the resources available. Limited resources will favor inflation if pursued too hotly.
I have been following her for a few years, read her book, watched the documentary, and also the recent debate where she eviscerated Stephen Moore.
I am well aware of current resource limitations but that may be due for a change as robotics advances.
That was the thrust of my question for her regarding an age of abundance.
MMT has money creation right. Full stop. They just don't follow through with their own insight that accounting is the tool to create money...and then apply that with a 50% Discount/Rebate policy at retail sale which would transform chronic erosive inflation into beneficial deflation and double the purchasing power of EVERYONE.
As for worrying about having the resources thats just caving to the "everything is unresolvably complex and worrisome" delusion of "free" market theoretics. You want change that benefits everyone? Double everyone's purchasing power and see if the market, restrained by a few ethical regulations that stabily secure the huge benefits of the above single policy, will provide the resources. And you could also implement a policy of a sliding scale percentage of gifted money required to be invested into eco-energy and infrastructure bonds...just to help that process along.
Or we can wring our hands and do nothing for a few more decades until there's billions on the left and billions on the right dying from converging crises...that could be resolved by integrating Monetary Gifting into the Debt ONLY system. The Martians must be laughing their asses off.
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."
Wally
Hi
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.
I also received that. Thanks for the info.
As much as we would all like to know what Stephanie Kelton thinks about investing, she has too much integrity to ever put that in writing let alone unsolicited emails.
I believe the reason the post seems to disappear is that the posts on the Substack account aren't actually there. You are getting a phonied up message by email, and it is redirecting you to a non-substack page or an illegal substack page. But that message isn't on the legitimate Substack page for our beloved authors. Just delete the messages he sends. His redirecting messages come from "forum@mg1.substack.com" which appears to be legitimate. I'm not expert enough to know exactly what they are doing, but it's a sophisticated game. They just want people to call or text the phone number in the message so they can game you. This is the phone number:
WhatsApp; +1 (567) 467-5919
Yes. I recognized the post as a scam as Prof Kelton is not about investing advice. I emailed her about this scam. Who knows if she actually reads our emails? So I posted the alert on her substack too.......does she read our comments?
I don't know how to report scams to the substack organization.
Also how can this redirecting forum message be legitimate if it is posing as Stehanie Kelton, spelling Kelton as 'Keltonn'?
I will listen to anything Stephanie appears on just to pick up on the nuances of how she’s talking about MMT but, gawd! I could not even get through this dreckful interview.
Baker contributed nothing. Starting with the Randy Wray was preaching “we can just print money” was stupid - and what does he mean by he was being “cryptic”? No, Dean, you were blundering.
I got as far as the weird digression into cryptocurrency and bailed. 10 minutes of my life I’ll never get back.
Stephanie
I love everything you explain to me. The implication of the stuff you've explained happens everyday in Trump-news. I need you to apply the basics to the current situations so I can apply the theoretical to the shades of reality.
Write more explanations more often!
You're the best, more people need to understand. I see more news using what you've explained about the 'details'. ...like the 'Interest side' of the US debt we have to pay and the higher yeilds on the Bonds we see on Squawk on the Street.
Gary
It may be hard for you to imagine but until you understand so called public debt is merely private market black ink you have nothing worthwhile to add.
Hey @Stephanie Kelton ,
Can I have a minute of yours..?
I wanted to talk about a deal between you and us..
If you got a minute in the DM..