Stephanie Kelton — MMT and the Deficit Myth

Published on
July 7th, 2020
Duration
59 minutes

COVID-19 and Financial Markets in a Post-Stimulus World


Stephanie Kelton — MMT and the Deficit Myth

The Interview ·
Featuring Stephanie Kelton and Marshall Auerback

Published on: July 7th, 2020 • Duration: 59 minutes

By both surprise and necessity, Modern Monetary Theory is here at our doorstep. And with neither major party remaining as the party of 'fiscal responsibility', it seems there is little standing in the way of MMT becoming the premise for US government spending initiatives. That’s why it is more important than ever to understand the thinking behind MMT and the common misconceptions surrounding it -- and to prepare your portfolio for its increased acceptance by politicians who view it as an invitation to spend. In this interview with Marshall Auerback of the Levy Economics Institute, Stephanie Kelton breaks down the arguments put forward in her new book, "The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy". Together they discuss why MMT does not give governments carte blanche to spend indiscriminately. Kelton also articulates why comparing government debts to private debts is flawed. She explores the varying gradations of monetary sovereignty as it relates to constraints on countries potentially using MMT as an economic framework. Finally, Kelton touches on the 'job guarantee vs. UBI' debate and much more in this interview that is sure to be a learning experience for MMT skeptics and believers alike. Filmed on July 2, 2020.

Comments

Transcript

  • PK
    Philipp K.
    18 September 2020 @ 08:12
    But the Fed Gov does not issue currency any more. Money is created via balance sheets by any banks. The gov has to borrow money like everyone else. Granted if interest is 0 and they have infinite credit, then practically they can issue money for free.
  • IZ
    Ignacio Z.
    15 September 2020 @ 20:27
    🔴More Money Today..... this is the level of "academics", "economists" and "politicians".
  • AT
    Andrew T.
    7 August 2020 @ 06:31
    If MMT is your chosen description of the monetary system then it must lead to more and more government because it effectively advocates the destruction of market signals by stating quite correctly that the central bank can target both short and long term interest rates. But if the price of money is determined by the state then the misallocation of resources is guaranteed. This can only result in adverse consequences including misleading prices and wages (market signals). The self fulfilling conclusion of an MMT lens is permanent government intervention, permanent “printing” of currency to cure deficient demand, permanent shrinkage of the private sector and an increase in central planning.
  • ER
    Eric R.
    12 July 2020 @ 17:07
    On RV I would have expected an interviewer who would push back and assume a devil’s advocate’s role. This was kind of an ecco chamber conversation and it basically leaves the listener non the wiser. Extraordinary postulates require extraordinary evidence. The interviewer was not looking for such. This was below RV standard.
    • KS
      Ken S.
      2 August 2020 @ 22:21
      Agreed. They mention in the interview that Auerbach wrote the forward to her book. It may as well have been a presentation instead of an interview. RV, next time you have someone controversial presenting, please have someone who is skeptical conduct the interview. For Kelton's next appearance, I suggest letting Jim Grant do the interview.
  • TS
    Tim S.
    2 August 2020 @ 19:59
    I respect the argument. It almost sounds like "keep drinking", just be sure to hydrate and stop before you poison. yourself." Inflation is an unavoidable headache and those who have not lived with inflation do not understand the anxiety of getting left behind. in 1981, at 18, I chose to help a neighbor widower trying to live on SS in California once her purchasing power had been inflated away. We noticed she had a lot of cat food tins to throw out but did not have any cats. I can't imagine cat food as a good source of protein. She was too proud to take help but was always willing to share our leftover pizza, pork and beans, and salad. I don't know how her life turned out but there were *many* victims of inflation and were unable to take advantage of Prop 13. Let's no minimize the forest fire that inflation is. It destroys almost everything it touches.
  • AT
    Andrew T.
    2 August 2020 @ 17:19
    MMT becomes credible when it is embraced by politicians on the right not just by academics on the left. Post Covid deficit spending has become the norm, central banks are effectively monetising the debt and all economic theories are just economic theories.
  • PH
    Paul H.
    13 July 2020 @ 15:27
    Regardless of anyone's view of MMT, it is where our public policy is going no matter which party wins in November. Sadly, central planning always fails, and that is the lesson of history Prof. Kelton misses by miles. She's another academic that believes in the four most dangerous English words. - This Time Is Different -
    • CG
      Christine G.
      23 July 2020 @ 23:02
      Listen again. It is not about central planning.
  • JT
    Jay T.
    15 July 2020 @ 00:04
    Thanks to RealVision for doing interviews like this. Please continue to do interviews with people having extreme ideas across the spectrum (I haven't seen any from the extreme right side of monetary/ economic policy, but you should do those too IMO). However, I just can't. I listened for 19 minutes and I just can't. It's garbage. The whole MMT theory is absolute fetid, empirically impossible, historically disproven garbage. So we print until we get inflation, then our brilliant politicians are going to raise taxes to take away the punch bowl? Right. Garbage. Cow dung. Idiocy. And, very likely, the next set of policy proposals that clueless, serious-faced, absolutely corrupt politicians and central bankers will adopt and implement. Recognize it's foolishness and prepare to exploit it to make obscene amounts of money.
    • CG
      Christine G.
      23 July 2020 @ 23:01
      You should listen past 19 minutes. You would also have to have to abandon your preconceived ideas of how MMT could be used.
  • CG
    Christine G.
    23 July 2020 @ 22:58
    Brilliant. Of course, most people will have to abandon their steriotypic views of MMT, in order to hear her. But for the intellectually flexible and open-minded, this is a great video.
  • TN
    Tim N.
    23 July 2020 @ 10:52
    This is not worth your time
  • MW
    Max W. | Real Vision
    7 July 2020 @ 21:18
    I understand the sentiment of those asking for a little pushback from the interviewer and we will take that into account. I would however like to point out that no one had that problem when Brent Johnson interviewed William White about central banking, or when Jim Grant interviews a fellow gold bug, or when DDB interviews another CB skeptic. If you want more combative interviews, so be it. But this request seems to only come on pieces that don't match up with viewers predilections.
    • SW
      Scott W.
      7 July 2020 @ 21:31
      That is because Max W. Jim Grant and his gold bugs don't advocate for policies that distort market signals, concentrate central power, and foster calamity. Kelton does. Perhaps unwittingly.
    • ND
      Nicole D.
      7 July 2020 @ 21:52
      No one wants combative interviews, gold and CB's are part of the economy now versus MMT which is new, theoretical and needs discourse and debate. If I understood correctly, Stephanie says deficits are not meaningful anymore, money printing and dispersing should occur until target inflation is reached, universal health care, basic income and guaranteed jobs would be helpful too. So my question is if money is free why do we pay taxes?
    • AI
      Andras I.
      7 July 2020 @ 22:49
      A round table of Stephanie Kelton (or Warren Mosler), Perry Mehrling, Bob Murphy, Richard Werner and Paul Krugman. Focusing on future implications, not theoretical debate of definitions. Moderated by Hendry and Max (to keep it sane) 2-3 hours https://www.youtube.com/watch?v=iTWAAdZIIL0
    • DS
      David S.
      7 July 2020 @ 22:50
      MMT as an economic theory was not discussed. If it were the comments might have been more informative. DLS
    • tc
      thomas c.
      7 July 2020 @ 23:56
      i always like a challenging interview regardless of the topic. I think Ed questions everyone with a response more than just "awesome,awesome"
    • EK
      Eric K.
      8 July 2020 @ 00:01
      I don't think combativeness is or should be the goal. For a good overview, I agree that a friendly interview sets the right tone. But for a deeper dive on MMT, I would like to see Jim Grant interview Stephanie Kelton. It would not be combative. I sense they're both too professional for that. It might end in an agreement to disagree, but it would be a thoughtful exploration of MMT. I enjoyed what she had to say, and I bought the book while listening to the interview so I can learn more. I'm just not ready to jump aboard yet (nor am I ready to write it off either). Jim Grant. Think about it.
    • DL
      Darryn L.
      8 July 2020 @ 00:42
      I think it was Charlie Munger who said that before arguing with someone you need to understand their argument better than they do. MMT seems to be gaining traction so we all need to understand what it is in order to either coherently argue against it or for it. I don't think you really need pushback for that but you need the interview to be in depth enough to allow you to assess to argument.
    • MV
      Marcus V.
      8 July 2020 @ 02:07
      This is an ad for communism, what does what she says even have to do with investing?
    • MS
      Michael S.
      8 July 2020 @ 02:44
      Mostly RV is a closed loop just like most of the internet tribes. You think most of your audience came her to think about things or hear varying views? They don't want to have "more combative interviews", THEY JUST DON'T WANT PEOPLE WITH WHOM THEY DISAGREE TO BE TREATED AS HUMAN. This is the internet, man!
    • MA
      Mohammed A.
      8 July 2020 @ 07:48
      Its not the style of the interview that matters, but if the content of the interview has reached sufficient intellectual depth. To me, MMT is a radical change, and a completely new monetary system. On many questions, there were hand waving and magical thinking. May be more probing questions from the host may have elicited a deeper exploration on how this could work. I was a lot more sympathetic to MMT before watching this interview.
    • LP
      Lauri P.
      11 July 2020 @ 21:29
      I would appreciate if the interviewer pushed back on any of the topics regardless of what his own opinion is, pointing out the obvious counter arguments and asking for rigorous answers. I wouldn't mind if those were asked even for the rv consensus views like gold, eg asking how and if the central banks could escape the pickle yet again without causing inflation as arguably happened after 2008. In fact, I do enjoy most the videos where there is actual debate and intellectual challenge left to the viewer to decide based on the strength of the arguments, and there definitely have been many of those in the platform!
    • AP
      Alfonso P.
      13 July 2020 @ 02:27
      This request come on pieces that do not match with viewers predilections? What are they? come on.
    • IF
      Ian F.
      22 July 2020 @ 17:30
      Jim Grant advocates for a gold standard. There is no better example of price fixing and distorting market signals than that! Come on Scott W.!
  • MV
    Max V.
    7 July 2020 @ 06:40
    It’s all fun’n games until someone loses reserve currency status
    • DN
      D N.
      7 July 2020 @ 10:47
      This comment wins...
    • GH
      Gregory H.
      7 July 2020 @ 13:34
      This is a cheap comment that gets thrown around all the time... When the best and brightest stop coming to the US for work and there are new tech monopolies born in non-US (and non-Maoist nations), we can start this discussion...
    • TZ
      Tibor Z.
      7 July 2020 @ 20:52
      But what else if not dollars? There is no alternative yet! That's the problem!
    • MJ
      Marcus J.
      7 July 2020 @ 21:58
      Unlikely to happen because at the end of the day everyone is going to bank with whoever has all the guns and the rule of law. No other contenders on the horizon. MMT is coming as its vastly more palatable than a debt deflation/default and there is no other way out of a debt trap.
    • BS
      Bevyn S.
      9 July 2020 @ 17:46
      She appears to have little geopolitical awareness
    • IF
      Ian F.
      22 July 2020 @ 17:25
      MMT does not = printing $ to buy stuff or UBI. If you don't really understand what MMT is then why even comment? MMT is the foundation of how a reserve banking system works. There really is no theory about it. Study MMT and you will understand the economy much better. Put aside the policy part of MMT as is it is a completely separate discussion.
  • LP
    Lauri P.
    19 July 2020 @ 22:28
    Now that we have found the Magic Money Tree, next we need to find the honest and self restrained politicians to run the money faucet in a fair and... Oh... Back to the drawing board I guess.
  • CP
    Carlos P.
    13 July 2020 @ 12:03
    From an accouting prespective I can´t see this working in the current framework. Currently the Treasury issues bonds (credit liability side) by selling bonds to private sector lender and/or the Federal Reserve which in turn give it the cash (Treasury debits asset side). When the private sector buys all the bonds, base money remains constant (only shifts from private to government hands). When the FR buys the bonds from private sector, there is an increase in base money since FR increases assets (bonds) and liabilities (bank reserves=cash). If the Treasury can issue currency directly whithout having to issue bonds, would they just debit their TGA on the Fed and credit a liability in the form of reserves (cash held by the banks). This eliminates the need of a Central Bank, right? Apart from the accounting prespective, the MMT approach basically eliminates the already tenous link between actual capital/savings accumulation and the price of capital (interest rates), due to the massive central bank intervention in the credit markets in recent years. This is what I believe is the core issue with the current credit based monetary system. MMT will end once and for all the price signaling mechanism (particularly the price of money/credit = interest rates) that is essential to a funcioning market economy. Malinvestments will keep building, inflation would run out of control and we expect politicians to be abel spot, acknowledge and the resolve this issues.. that will never happen.
    • KJ
      Kurt J.
      15 July 2020 @ 10:11
      All of your premises are wrong, did you even listen? Governments spend first, by marking up the treasury account. Double entry book keeping, simple as that. Then the debt is sold as a finically asset. MMT is pointing out the obvious, that it needn’t be sold at all.
    • CP
      Carlos P.
      15 July 2020 @ 22:40
      Kurt J. Please explain how can money that wasn't borrowed or printed be spent in the first place? "marking up the Treasury account".. You mean the TGA? That's a liability (credit) on the FR balance sheet.. so what does the FR book as a debit to balance the credit? I'm not saying the government needs to borrow first to spend later, but if it doesn't borrow.. then it has to print it (which already happens when the Fed buys the bonds from private lenders rigth after they are issued). I think you 're the one that needs to review your premises.
  • JB
    Jake B.
    15 July 2020 @ 09:08
    Inflation is something that has to be defined. Which makes it garbage as a metric. CPI inflation has been low since the GFC yet asset prices have skyrocketed. She does not even come close to providing an argument for how MMT would address asset price inflation. It is sold as a left wing policy, but it’ll end up making the top 0.1% richer at the expense of the middle and lower class.
  • HK
    Hyosoong K.
    15 July 2020 @ 04:29
    MMT is a theory that is quite enlightening for an intellectual discussion. Having said that it is not a sustainable policy. US is the only country in the world that is able to practice MMT since USD is the global reserve currency which is protected from being devalued. If US continues to print and give out free money in order to save its own economy while let rest of world suffer, eventually rest of world will come realization and revolt against USD as a global currency. At which time a new global reserve currency (e.g. digital currency) will replace US dollar and MMT will no longer a viable option.
  • ZY
    ZHENG Y.
    15 July 2020 @ 01:40
    The currency issuer...in my mind is bank and Federal Reserve. Can anyone find me an explanation that what Richard werner’s prove is wrong? Or where should i look into.
  • Md
    Mike d.
    12 July 2020 @ 22:31
    These people exhibit a level of confidence in the competence and integrity of human government that defies every lesson of history.
    • lm
      luke m.
      14 July 2020 @ 00:23
      pure poetary
  • CP
    Carlos P.
    13 July 2020 @ 12:11
    All I ear is ... goverment can and will fix this.. and that.. and the other.
  • JD
    Jonathan D.
    12 July 2020 @ 05:31
    MMT is pure lunacy. If deficits don't matter then why not cut income and corporate tax rates to a tiny number such as 5%, and then incentivize towards a 0% rate for any person or corporation that creates jobs above a threshold? Seems like capital would be better distributed by non political entities that dont do it for arbitrary or political reasons. When we (or others) turn the printing presses on what stops major exporters like China from banding together and saying "we will take gold backed currency from this bloc, oil backed currency from this bloc, and green monopoly money from a tiny select few we wish to extert control over because we already have enough green monopoly money thanks!"
    • RD
      Russell D.
      13 July 2020 @ 07:45
      Who's got gold backed currency?
  • WM
    William M.
    7 July 2020 @ 05:42
    Meet the next Secretary of the U.S. Treasury! She's very articulate, bright and well-informed and makes a great case for MMT. Who knows...it might even work! I think we'll soon be finding out....
    • CR
      Cory R.
      9 July 2020 @ 03:50
      Bottom line for why MMT would fail is because giving 'free' money to people disincentives them to work. A far better idea is to make a system that rewards people better for the work they do. Why oh why can academics only think up ideas that increase the debt?
    • GW
      Gary W.
      13 July 2020 @ 01:29
      Exactly - she wants a job in a new Administration. And the pols and Fed PhDs need her there to continue their madness. She tries to say there’s no free lunch, but the effect is still that it appears to be cheaper than it should be. A “theory” if you can keep it.
  • JE
    J E.
    12 July 2020 @ 13:30
    The elephant in the room is USD reserve status of course... when that goes, then these fantasies will become historical record of another empire’s peak moment of pride.
  • DR
    Danilo R.
    10 July 2020 @ 07:10
    MMT makes the fed the center of the universe. After we got off the gold standard I have asserted that our currency is supported by our tax paying workers. The trio of globalization, technology, and financial innovation have led to wealth inequality. Instead of just seeing MMT from the lens of only interest rates, unemployment, fiat GDP and mean worker productivity we need to address real GDP, stagflation and wealth inequality and the never ending bubbles created by and only for the benefit of the boomers. At it’s heart, Austrian economics gives immediate pain to current generations for the benefit of future generations. MMT solely benefits the current regime and finances it’s sins by placing the debt on the next generation who need to buy overinflated assets and pay higher taxes, the parting gifts of the too big to fail generation. The solution for EMs, which are totally ignored by MMT, is cheap labor, minimizing the payment of external debt, black market goods and services, and remittances from the export of the working age professionals.
    • LS
      Lemony S.
      10 July 2020 @ 15:45
      Great summary of the evolution of the American economic system, which now models the failures of marxists in the not-so-long ago past.
    • RL
      Roo L.
      12 July 2020 @ 12:27
      A bit myopic that this is a boomer created issue. It began long before boomers started to work and vote.
  • Jv
    Juri v.
    8 July 2020 @ 19:09
    make it political and you get a 50/50 outcome ;-) good start i find still, a lot more depth needed for such a gigantic and challenging topic of course, so please bring her back, maybe match her with Richard Werner. Stephanie, the more you share and explain the more your book will be bought, so don't be shy, the topic deserves it ;-)
    • SS
      Shanthi S.
      12 July 2020 @ 09:16
      Agreed. Richard Werner, Lacy Hunt, Mike Green... someone that will expose what's under the surface.
  • SS
    Shanthi S.
    10 July 2020 @ 11:40
    This comment is on the interview itself, which was one of the worst I've seen on RV. I feel like I just watched an hour of a six year old and her sycophantic brother screaming "If I ruled the world I'd...". Zero depth. The interviewer's attempts at straw-manning were half-arsed and glibly dismissed by Kelton. This was completely devoid of substance. I actually appreciate RV torturing us with MMT talk. It should be discussed (or is it disgust?), but please if you're going to torture us, have mercy on our intellects and at least make it an honest, mature discussion.
    • VU
      Vikram U.
      10 July 2020 @ 22:28
      I think you came in with your own biases before watching. I didn't hear any "screaming".
    • SS
      Shanthi S.
      12 July 2020 @ 09:12
      Vikram, it was an analogy, and I'm not hiding my biases. I'm very biased against MMT style fiscal policy. My comment was referring to shallowness of the interview. If I'm going to listen to people pontificate on the glories of bigger government for an hour, I'd at least like to learn something I didn't already know. This interview was the least informative of all the MMT related content I've listened to over the last couple of years, on RV or elsewhere. I expected more depth.
  • JV
    Jan V.
    11 July 2020 @ 20:06
    So governments can spend as much as they want until we see inflation rising above 2%. Does she really believe all these programs are possible without hitting this inflation target in no time? What happens than, abort mission or allow rampant inflation...
  • SS
    Stephen S.
    11 July 2020 @ 17:44
    MMT places great emphasis on the government's role, such as keeping everyone employed. Giving politicians more power is bad for the country, good for politicians, especially the most corrupt ones. Does Kelton think that the national debt can grow without limit, as long as inflation is not triggered? Lacy Hunt makes a very persuasive case that as debt grows, it reduces GDP growth (he references work by other economists, such as Rogoff and Reinhart). So debt does matter greatly, even if inflation is not yet triggered. Too bad there was no discussion of the multiplier for government spending, and the ultimate impact of deficits on the economy. I would also like to know what SK thinks are the key goals for economic policy.
  • JR
    Jeremy R.
    11 July 2020 @ 01:11
    I believe there are two aspects of the MMT movement that are purposefully conflated so I want to articulate my view of them here to make the distinction: 1. MMT is an accounting framework used to understand how governments can finance themselves – which is worthy of consideration as well as critique. 2. MMT is a glamorous new package for the same altruistic moral framework to justify more government intervention in the economy and our lives. The first says the technical constraints for government spending, and hence government intervention in the economy are misplaced or misguided. The second says: therefore, let’s undertake government boondoggles and make-work projects to put “idle resources” to work, because “slack.” It says people are suffering and we are the moral heroes who can rescue them with our expertise. You have no control over your own destiny, mommy government is here. Even though we've been spending on such programmes for generations, especially since FDR, our programmes will get spending just right to completely overhaul the economy. Never mind the small number of individual freedoms we have to step on in the process.
    • JR
      Jeremy R.
      11 July 2020 @ 01:32
      Postscript: as I continue listening, I'm hearing the same buzzwords and dreamy, ideal world phraseology used by politicians on the election campaign used to seduce voters at the ballot box. MMT is definitely coming.
  • WD
    William D.
    11 July 2020 @ 00:35
    can we get the balance of the discussion from the Rickards Interview please??
  • CB
    Chris B.
    10 July 2020 @ 23:23
    Thanks to RV for this interview as I knew little about MMT so was eye opening for me. I think it was Howard Marks who asked the question: “If we gave every American $1M or $300T ($1M * 300M = $300T) would that be inflationary?” The answer is probably “yes”. So far $2T to $3T is not. So, I would expect the next administration regardless of the party to increase spending DRAMATICALLY (because they can) until higher inflation kicks in. Ladies and gentlemen, prepare your portfolios…
  • VU
    Vikram U.
    10 July 2020 @ 22:31
    A lot people here seem to be against MMT. It seems they came in with their minds made up about MMT even before watching the video. I'm starting to think most against MMT are here just to flood the comments section with their emotional anti-MMT propaganda.
  • MS
    Michael S.
    10 July 2020 @ 16:47
    MMT has gotten it right for a decade and Austrian ecobomics has been wrong for a decade. If Bernanke didnt raise rates and instead did QE in 2006 and moneyized all the toxic assets the housing bubble wouldnt have popped and no recession. Government defecit = private sector surplus = more money for people and higher stock market.
    • SS
      Shanthi S.
      10 July 2020 @ 21:49
      Sure. We may have to trade what is, but what’s happening, and what’s right are two different things. The utilitarian approach to the expansion of fiscal and State power is the easy way out, and the societal results of this apparent convenience are already being felt. It’s only going to get worse from here, especially for lovers of freedom and free markets. MMT is the economics of Socialism. I’m long gulags.
  • RK
    Roger K.
    10 July 2020 @ 19:22
    Oh MMT...!!!- It's a good idea if you could implement it with perfection. But the issue is you cannot do those social experiment against the NATURE (human).
  • MS
    Michael S.
    10 July 2020 @ 17:20
    Austrian economics told you to buy junior miners and gold at $1,900/oz in 2011 and that it would cost you $1,000 to fill up a tabk of gas and hyperinflation. MMT told you QE isnt CPI inflationary and that we would see asset price inflation. MMT is how the world works and investors need to embrace it.
  • PJ
    Peter J.
    7 July 2020 @ 10:57
    Thanks RV for bringing, but to be honest I am not sure I learnt very much on what the problems are to be solved. It’s seems to be another economist coming with more band aids solutions (gaming the system) while not understanding the complexity of the system. Economies need less not more intervention. If governments want to do things, then use taxes not borrowing and stealing tactics.
    • DR
      David R.
      7 July 2020 @ 14:19
      You are living in the wrong country if you want to see any responsible policies. It's doomed like the Titanic. Better to join the many successful, wealthy people who have already left that sinking ship for greener pastures.
    • LS
      Lemony S.
      10 July 2020 @ 16:13
      David, where else is there to run?
  • HF
    Hassan F.
    7 July 2020 @ 11:32
    The fact that Stephanie Kelton is on Real Vision it shows that the product has declined in quality significantly. She is antichrist of capitalism. Shame on Real Vision
    • RA
      Ralph A.
      7 July 2020 @ 11:54
      I think it is good to hear opposing views, so I don’t fault them for having her on, but the choice of interviewer was poor. He was tripping all over himself to help her make her points instead of pushing back and poking holes in her theory.
    • DD
      Dmitry D.
      7 July 2020 @ 12:06
      The fact that she is here is just further proof of how awesome RV is - giving a platform for various viewpoints. One does not need to agree with Stephanie Kelton, to see value in having her talk about MMT - people can hear arguments from the horse's mouth and decide whether they make sense or not as opposed to making up their mind based on someone else's (mis?)representation of her work. I, for one, find her arguments unconvincing and consisting largely of a bunch of truisms and straw-men knockdowns but I still find time spend listening to her valuable enough.
    • JA
      John A.
      7 July 2020 @ 13:22
      I own Stephanie Kelton’s book, as well as Ken Rogoff’s book, The Curse of Cash. I bought both of them, not because I support their ideas, but because we all need to understand the thinking of those close to power, and understand in what direction they are influencing our leaders. I, for one, need to try to understand how to manage money through insane policies. I had steam coming out of my ears for most of Rogoff’s book, and the same so far, for Kelton’s. I have asked a question many times in forums where Kelton has spoken, and I have never gotten an answer: If inflation is a hidden tax (it is), and Kelton’s solution to inflation is higher taxes, who ends up with all the money?
    • RM
      Rick M.
      7 July 2020 @ 15:35
      We need to understand this BS to move appropriately. I was looking for an overview of the theory from a neutral perspective and instead heard something that was 1/3 political. Could Ed please do a series on MMT to explain it from an investor's perspective? Go neutral and then point out where it will blow up first. I've heard Mosler describe it and have picked up a little here and there, but every source I find has an agenda.
    • LS
      Lemony S.
      10 July 2020 @ 16:12
      John, the answer regarding where the money goes, is exactly to whom you suspect --- the small group surrounding the supreme leader (think Fidel), while the entire remainder of the population has worthless currency and no services --- but a whole lot of claims on what they have and do, yet can't access. Kelton is in fact doing her part to usher in the man of abomination, there is no doubt. Do you think it a coincidence that she has the closest of ties to another communist, Mr. Sanders? Pray that your and others hearts aren't as hardened.
  • KP
    Kaushal P.
    7 July 2020 @ 13:21
    The only question I would ask is what empiric evidence is there for any of these policies being effective at any level? It is not a Theory more like a Wishlist with hand waving explanations.
    • SW
      Scott W.
      7 July 2020 @ 13:45
      How does a Keynesian escape from a hole? She assumes a ladder. You're spot on. It's a wishlist. Or moreover, a fantasy. It assumes efficient central planning.
    • JA
      Jonathan A.
      7 July 2020 @ 14:11
      The WPA
    • RM
      Rick M.
      7 July 2020 @ 15:25
      Warren Mosler claims MMT must be on to something, or Japan would've collapsed long ago. Doesn't convince me, but that's the claim.
    • LS
      Lemony S.
      10 July 2020 @ 16:02
      Yes, they are on to less and less productivity and inability to service debt. It's like everyone else, confused as to how all of these dwindling economies can keep kicking the can down the road --- we all know there is a day of reckoning. Trying to convince us that a drunk can keep drinking without any consequences: "He's not dead yet" --- no Mr. Mosler, not very convincing.
  • PU
    Peter U.
    8 July 2020 @ 15:45
    Stephanie Kelton sounds like (and dresses like) Elizabeth Holmes (CEO of Theranos). Elizabeth Holmes was completely discredited but not before bamboozling very smart people to part with hundreds of millions of dollars.
    • PD
      Peter D.
      8 July 2020 @ 22:10
      Great analogy. Ms. Kelton is the most influential economist in America. Not because what she is selling it real. But because Ms. Kelton - like Ms. Holmes - is a great salesperson .... at selling fantasy. Americans whom - like Theranos shareholders - have been living in an Empire of Illusion , are going to wake up with one heck of a hangover one day. The problem is that Ms. Kelton's arguments are so alluring .... to the greedy, the corrupt and the ill-informed... ... that it is thus going to get a lot worse before it gets better.
    • LS
      Lemony S.
      10 July 2020 @ 15:59
      Have you noticed how she has that weird grin while she waits to spew the next specious morsel? Quite telling ...
  • DL
    D L.
    8 July 2020 @ 18:28
    Great interviewer, respectfully challenged Steph. RV is getting better and better at doing the multi-perspective interviews, thank you for improving! I can only imagine this functioning in world where humans function rationally, for the greater good of all, using critical thinking and data to make choices, while having a flexible belief system that changes and grows as things evolve. All this to say, that wont happen. We will fuck things up, greed, bias, ignorance, arrogance, a rigid belief system, sense of superiority, the pursuit of pleasure and aversion to displeasure, seeking approval of others, fear, all sorts of things will make it so that the system that allows unlimited power (printing) will not be used efficiently or effectively towards its intended goal (equality and freedom).
    • MA
      Mohammed A.
      8 July 2020 @ 19:47
      If we ever adopt proper MMT, and the system collapses, I can imagine two responses from MMT backers. 1. The implementation was flawed, and is not the fault of the theory. 2. The people in control were not doing the things they were supposed to, namely cut government spending that are inflationary when inflation starts to go up (because they don't want to get unpopular doing it). So, its not the theory, its the fault of humans! Even if the implementation fails every time it is tried.
    • SS
      Shanthi S.
      10 July 2020 @ 10:32
      You call that a challenge? Where was the challenge? He's a fan-boy.
    • LS
      Lemony S.
      10 July 2020 @ 15:58
      Of course, these people are communists. With all the suffering and death they've caused, and they still won't admit the truth ... they keep lying to everyone (and themselves) that we just didn't do it right. Babel can never stand for too long. Be vigilant.
  • RK
    Rafal K.
    8 July 2020 @ 20:29
    Complete and utter BS, that's MMT. If you disincentivize productive portions of the economy, you will get exactly what you incentivized, non productivity. Heck, at least it solves immigration issue, in fact some will be rushing out, as fast as possible..
    • SS
      Shanthi S.
      10 July 2020 @ 10:31
      They'll have to have capital controls of some kind, or else an inescapable globally uniform MMT Hellscape.
    • LS
      Lemony S.
      10 July 2020 @ 15:56
      Give these marxists a dystopian shot ... yes you already see they are attempting such a thing. These two are the kinds that would instantly be rounded up and disposed of, ironically, if their "dreams" (most everyone's nightmares) came true.
  • XM
    Xiaoyu M.
    8 July 2020 @ 21:39
    The problem i have with MMT or Chartalism is that they ignore the mechanics of money creation. We have a debt based monetary system which is inherently deflationary, not enough money to service debt due to interest payments, and it has the appearance that government debt is private savings. That saving will be sucked out of the private sector to service the debt in the future and that's why we do not have hyperinflation, and thus we have debt deflation when our economic system shut down like this. The Fed can only LEND, not print which means it is inflationary short term and deflationary long term if the system does not circulate. Eventually our debt will out grow our ability to service it then we will need true MMT which means we merge FED and Treasure liabilities. After you merge their liabilities which removes the constraint mechanism then the Fed will just pay our bills and print money and causes our currency to be worthless. The money created today is not backed by nothing, it is backed by our future productivity and when you leverage it to the extremes then it eventually becomes worthless. No such thing as a free lunch.
    • LS
      Lemony S.
      10 July 2020 @ 15:55
      Great summary my friend. You nailed it.
  • LH
    Leigh H.
    9 July 2020 @ 01:38
    Wow. I came in open minded. This was a conversation with little clarity, to be polite. Wow. Are these people not vey intelligent, or are they simply bought?
    • LS
      Lemony S.
      10 July 2020 @ 15:48
      Yes to your last question. It's funny also when they fulfill "identity" stereotypes. Dig deeper.
  • TG
    Terry G.
    10 July 2020 @ 08:57
    MMT can buzz off - what is so bad about deflation brought about by technological supply side improvements?
    • LS
      Lemony S.
      10 July 2020 @ 15:42
      Yes, exactly. They need inflation because MMT is all about central control and marxist manipulation. Lenin's dream.
  • BP
    Byron P.
    10 July 2020 @ 14:49
    I wonder if this lady has ever traded financial markets.....I don't think so.
  • RW
    Richard W.
    8 July 2020 @ 08:37
    re DIOGO's comment below the vast majority of people do not understand how money is created in a modern economy. It is created by banks making loans. The double entry in the bank's accounting system is basically very simple: Dr "name of person loan account" - this is the bank's asset Cr Loans made account - this is the bank's matching liability et voila, money is created
    • AM
      Abigail M.
      8 July 2020 @ 12:49
      Are you Richard Wagner?
    • Jv
      Juri v.
      8 July 2020 @ 18:25
      Maybe Werner ;-) I got more question than answers here and maybe it would be a good idea if you Richard had an interview with her and go deeper into real economy challenges, examples, case studies, comparisons of traditional vs modern models, etc; just in case it's W for Werner
    • AM
      Abigail M.
      10 July 2020 @ 12:31
      This means that that government is NOT the currency issuer!
  • SN
    Shmuel N.
    9 July 2020 @ 06:30
    Very confusing interview. Most of the multiple ideas that are presented are discussed only briefly. It seems like MMT is nothing more than an engineered economy. But we had a very bad experience with such ideas.
    • SS
      Shanthi S.
      10 July 2020 @ 11:44
      Agreed. A dishonest interview IMO. And Socialism sucks like nothing else on this otherwise decent planet.
  • ms
    matthew s.
    7 July 2020 @ 11:12
    I don't know how to solve the current crisis. But, more and more I think MMT is a viable solution, because are there any other options?
    • SS
      Shanthi S.
      10 July 2020 @ 11:07
      If you regard MMT as the "solution", what do you regard as the problem? Individual Freedom? Free Markets? Prosperity? Innovation? MMT is the "cure" for all those I guess...
  • BS
    Brett S.
    7 July 2020 @ 15:24
    To anyone who is a trader, or aspiring trader-- Forget about how you feel regarding MMT. It won't make you any money. You make money by looking at things as they are, not how you want them to be. In the US, some form of MMT is clearly coming, we just don't know when. Pay attention, dispassionately, to the MMT discussion / popularity so you remain alert to opportunities. Prepare by mapping out what strategies you would run and what you would not run. If you are not a trader or aspiring trader, then carry on. You can afford to get worked up either for or against the issue.
    • EH
      Edward H. | Real Vision
      7 July 2020 @ 15:33
      Great comment, Brett. That's just as true regarding Fed policy. Makes a lot of sense no matter what the subject is: pay attention to what will happen, not what you want to happen.
    • PR
      Private R.
      7 July 2020 @ 20:44
      Agreed, I forced myself to read her book. It's the world that is here so important to know about it and not run off and hide yourself in your Austrian fallout shelter :)
    • TP
      Timothy P.
      7 July 2020 @ 20:57
      Why would you need to admonish/remind any trader to look for opportunities? That's what trading IS. MMT is a flaming pile of garbage, and yes, if there's a way to trade it I will. It still doesn't stop MMT from being complete crap. I've traded enough to know not to get wedded to a position, but I still can have a ethical framework that doesn't apathetically look at something and just "lets it happen". If anything, I'd use my resources to counter such a disaster, if I can. Playing a detached academic only works if you've got tenure.
    • AW
      Andrew W.
      8 July 2020 @ 03:24
      100% agree but can't resist because it's just such a bad idea. It's like advocating people drink cyanide. You'd go long crematoriums but would probably still express an opinion at one point.
    • MA
      Mohammed A.
      8 July 2020 @ 08:01
      Trading doesn't matter if money loses its meaning, and the economy collapses and foreigners refuse to send their goods and services in exchange of pieces of paper. So, sometimes it pays to figure out if the whole system will go down or not. Picking up pennies in front of a steamroller is not a sound strategy.
    • SS
      Shanthi S.
      10 July 2020 @ 10:55
      Disagree. You can do both. In fact, there's a moral imperative for those who understand, to speak up against the wholesale destruction of the private sector, and the potential mass enslavement and control of humanity.
  • TB
    Tyler B.
    8 July 2020 @ 00:21
    Stalin and Mao would be proud of this moron. Capitalism bad communism good...blah blah blah. Real vision is better than this crap
    • JS
      John S.
      8 July 2020 @ 02:49
      RVTV allows you to hear the MMT argument from the horse's mouth - essential to form an opinion
    • SS
      Shanthi S.
      10 July 2020 @ 10:43
      She does sound like she has a chair at the Politburo.
  • MR
    Michael R.
    8 July 2020 @ 06:16
    This was Sophomoric. Trying to spin a political narrative into a fiscal solution. Donald Trump just gave you MMT with $600.00 extra per week of unemployment and the result is people would rather stay home than go back to their job. EPIC FAIL. You are talking to people who are financial professionals and high net worth investors, we don’t care who the president is so cut the crap, your dismissal of the bond market was laughable. DEBT MATTERS, our relative low debt in the 70’s allowed Paul Volker to raise interest rates. We don’t have that option available today because of the massive amount of gov./Corp. & personal debt. What a joke!
    • AM
      Abigail M.
      8 July 2020 @ 12:57
      With 4:30 left she lets the mask slip: “10 year plan”. Where have we heard that before??
    • SS
      Shanthi S.
      10 July 2020 @ 10:40
      Absolutely! She also let's the mask slip a little more when she says the private sector will have to pay a "small premium" to hire workers already employed by the State. LOL. Hard assets people!
  • NS
    Nathan S.
    8 July 2020 @ 10:53
    Mwoarrrrr brrrrrrrr! Genius strategy
    • PR
      Private R.
      8 July 2020 @ 11:09
      bitcoiner?
    • AM
      Abigail M.
      8 July 2020 @ 12:47
      The more these ppl talk the more I realize I don’t own enough hard assets.
    • SS
      Shanthi S.
      10 July 2020 @ 10:34
      LOL, Exactly.
  • PU
    Peter U.
    8 July 2020 @ 15:35
    economic heretic
    • SS
      Shanthi S.
      10 July 2020 @ 10:34
      Too flattering.
  • SG
    Shiv G.
    10 July 2020 @ 01:29
    So if they are the currency issuers and we are the helpless currency users and by drawing this "sand in the line" between government and the household, aren't we by definition putting governments above the law and giving them limitless power over us?
  • SB
    Stewart B.
    9 July 2020 @ 17:19
    Great interview. If politicians have run large deficits in the past, they will find it very difficult to cut back once inflation rises. Where would they cut? Health? Welfare? Education? There would also be a drive to understate inflation so that politicians could keep spending.
    • CM
      Christopher M.
      9 July 2020 @ 21:22
      No one ever brings up the military. Which has been the backbone of low volatility for the last 80years. Safety and security of global trade passage is what this whole dollar gig is built on, it has allowed domestic politicians to spend what they have for so long.
  • JC
    Joseph C.
    9 July 2020 @ 19:32
    RV, great interview. Challenging content from the best minds in the world is what makes RV such an incredible value. MMT is so seductive and seemingly, based on the last 10 years, entirely correct. It is only recently that we have seen the problem with MMT which is that the limit of MMT is not inflation, it's pitchforks. No matter how you slice it, there are winners and losers when you create money from thin air. Eventually, this accrual of unearned benefits leads to animosity among the have nots and the result is electing a man like Trump to be president or burning down the neighborhood and wanting to destroy the history of the country. People don't understand how they are being shafted, only that they are.
  • km
    kristopher m.
    9 July 2020 @ 17:47
    OMG, Local jurisdictions, states printing currency. Where do these people come from, why do we let them anywhere near our children.
  • BS
    Bevyn S.
    9 July 2020 @ 17:45
    Pushing MMT and hollowing out of industrial base is a threat to national security. Stephanie Kelton is living in lala land. Appreciate listening to her perspective, thanks for bringing this to RV. Totally disagree with a ton of her assumptions... But I'm glad I listened...
  • BS
    Bevyn S.
    9 July 2020 @ 17:20
    To say the US Gov is the sole issuer or currency is a misnomer... It doesn't create a distinction between M1 and M2... The private sector does create M2 in the form of credit expansion...
  • PV
    P V.
    9 July 2020 @ 09:15
    Fascinating and really glad RV bring such a wide variety of opinions. On a very basic level, the problem w/prof Kelton and MMT is the dogmatic faith in government, hence the belief that "unrestrained" money is good for the commonwealth. Sadly history shows that such blind faith is unwarranted and that, to put it like F.Hayek, “The root and source of all monetary evil is the government's monopoly on money.”
    • km
      kristopher m.
      9 July 2020 @ 14:14
      yup
  • AP
    Adam P.
    9 July 2020 @ 14:06
    So, if I understand correctly, the idea is to transfer the decision-making of dollar distribution from banks to local bureaucrats. I've seen my local bureaucrats... I'll (sadly) stick with the bankers. Eeeesh.
  • KM
    Kewal M.
    9 July 2020 @ 06:44
    I understand that MMT proposes an opposite system to the historical norm. Previously a carpenter would sell a non-scarce item such as a self produced table for a scarce item such as gold (hard money) now the government sells a non-scarce item thats the free money printed in unlimited amounts for a hard commodity such as a tabel which has now become scarce domestically due to production being offshored. And now one can easily argue that imports are good as you get to use the table which you have lost the ability to produce yourself.
  • CM
    Chris M.
    9 July 2020 @ 04:17
    Stephanie admits that the Federal Reserve cannot model inflation targets, but at the same time argues for a monetary policy (MMT) that is only constrained by inflation and resources. How can the system maintain equilibrium without understanding the former? Hyper inflation seems inevitable.
  • EL
    Emanuel L.
    8 July 2020 @ 22:19
    In the end, MMT is a man-in-the-middle attack on wealth. An individual exchanges money for a good or service, or such a service or good is exchanged for money. Now what MMT does, it gets into all these transactions of our economy. By constantly raising the quantity of money, MMT tilts the exchange rate of money for goods and services every so little to your disfavor, slightly depriving you of a fraction of your wealth each and every time you use their money.
    • CR
      Cory R.
      9 July 2020 @ 04:14
      How about replace income tax with a Tobin tax?
  • KK
    Konstantin K.
    9 July 2020 @ 04:07
    faulty
  • FM
    Fabio M.
    9 July 2020 @ 03:37
    I don’t subscribe to what she preaches but it is very relevant for me to better understand different theories and opinions, in particular one (MMT) that is being adopted more and more around the world.
  • PW
    Peng W.
    9 July 2020 @ 03:25
    This is a fantastic interview. Thanks for trying to hear different opinions out. Cheers!
  • AS
    Alex S.
    9 July 2020 @ 01:26
    If you’re going to be for MMT, might as well be full on UBI. That way, everyone gets enough to not live in a tent beneath the overpass. Those who want nicer things will still be incentivized to work. Our current unemployment benefits disincentivize workers in lower wage positions. Additionally, the idea of a socialized “worker pool” from which private sector businesses would pull from as needed seems to marginalize and stigmatize those workers unfortunate enough to be in that pool. I see both UBI and MMT gaining traction. Meanwhile, I buy gold and bitcoin ;)
  • TB
    Tobin B.
    9 July 2020 @ 00:05
    It's nice that more and more people are learning about these things and how bad MMT is for them.
  • RD
    Riki D.
    9 July 2020 @ 00:03
    One of the many reasons to be very long Gold!
  • WS
    William S.
    8 July 2020 @ 21:46
    Remarkable. The only thing holding back MMT’s inevitable triumph is Jared Kushner. Peer review that comment Professor.
  • CN
    Christian N.
    8 July 2020 @ 06:24
    @Realvisiom, You're presenting an MMT debate among two MMT proponents. This is not very respectful of your subscribers' time. I'm all in favour of giving Stephanie Kelton a platform, but not without a critical interviewer.
    • JG
      Jeff G.
      8 July 2020 @ 18:04
      Ditto!
  • JF
    John F.
    8 July 2020 @ 18:02
    I so appreciate this interview on RV where balanced perspectives are welcomed and scrutinized. I also appreciate Stephanie for sticking her neck out to venture into the lions den here. Marshall is a fine interviewer - good choice. With every real question I kept hoping for something of real substance to be delivered as a response, something that I could think about and chew on, but nothing came. Milk toast answers at best that didn’t carry any weight at least to convince me there was something to MMT worth considering for the country’s future. So I went back and listened to Stephanie’s answers again and again yet the academics of her discourse only suffocated the conversation as a whole. I’m impressed she could stuff the pages between the front and back covers just to satisfy her academic requirement to “publish or parish”. A coloring book on MMT would probably have done the same. Hmmmm - Not a bad idea...
  • mf
    massimo f.
    8 July 2020 @ 18:02
    I happened to look up where the majority of rubber was produced, 90% in southeast asia. Great interview RV, after listening to this I can dismiss any advocate for MMT without a thought.
  • pd
    peter d.
    8 July 2020 @ 14:29
    thank you for putting this interview up on RV - its good to hear what academics actually think. my grandmother said" if you cannot say anything nice - dont say anything." .so words chosen carefully - how did the world come to this?
    • AM
      Abigail M.
      8 July 2020 @ 15:52
      Some ideas are so stupid that only intellectuals believe them. George Orwell.
  • JC
    James C.
    7 July 2020 @ 11:46
    Dear RVTV viewers - please take MMT seriously. It is only going to increase in political significance. Put yourself in the shoes of a politician in any given western democracy. You are presented with an 'Economic Theory' that has plenty of PhDs behind it that outlines: a) Government Deficits are merely expansions of the private sector and therefore good. b) Trade deficits are our country getting the better deal vs say China and therefore good. c) GJ's give folks a sense of purpose and security without the inconvenience of market dynamics. d) UBI is strictly only for those who don't fancy work of any form. It's a slam dunk vote winner and if you don't run with it the other guy will.
    • RA
      Ralph A.
      7 July 2020 @ 11:52
      Sadly you are right, buy gold now because the inflation is coming.
    • mc
      mannix c.
      7 July 2020 @ 19:14
      Great point. its hard to fight an idea whose time is come.
    • pd
      peter d.
      8 July 2020 @ 14:26
      James C. you have summed it up perfectly - doesnt matter how completely nuts M.M.T actually is. its coming. some of the things this lady said in this interview made my head hurt - its like "forget everything we have all been taught and forget reality - they are not important."
  • JG
    Jeff G.
    8 July 2020 @ 14:10
    May I suggest the book for these two. The Road to Serfdom by Hayek
  • GB
    Gino B.
    8 July 2020 @ 04:37
    If my son spun this type of logic I'd send him to his room without dinner. Mind you he might qualify for a federal job for staying in his room. The logic is insane, and a clear flag that the end of this monetary paradigm is fast approaching.
    • AM
      Abigail M.
      8 July 2020 @ 12:50
      Buy hard assets.
  • RG
    Rob G.
    8 July 2020 @ 04:47
    Three major problems with MMT; 1) its administered by beurocrats who will always be way out of touch with what services that are required at the local level, hence the wastage will be immense, 2) the minimum amount of UBI will become a polital tool for buying votes and 3) it assumes you can print enogh of your currency to fund it all. That's fine if you're the US, what about those countries without a reserve currency? Not an option I guess. I don;t buy your argument.
    • AM
      Abigail M.
      8 July 2020 @ 12:50
      Wealth cannot be created. The idea that government deficits increase the equity of the private sector is insane.
  • MM
    Matthew M.
    8 July 2020 @ 10:49
    I don't understand how MMT theorists think it would be simple to center spending around inflation. Inflation targets would be extremely difficult to forecast/control, and present a high risk of runaway. I also enjoyed the solution to runaway housing prices (due to artificial control of interest rates), being more controls :) I will say though, that in a world already full of heavy market control... MMT actually does seem a bit more rational...
    • MM
      Matthew M.
      8 July 2020 @ 10:53
      Also.. the talk about exports being more valuable than imports (due to the real goods being lost by the exporting country). Is this not MMT describing hyperinflation...? haha
    • PR
      Private R.
      8 July 2020 @ 11:08
      'exports being more valuable than imports' she totally lost me here, if we were importing anything of real value possibly but what we import on the whole is cheap tatt which fall to bits within three months - utter wealth destruction, not creation.
    • AM
      Abigail M.
      8 July 2020 @ 12:49
      No concept of incentives. Government is incentivized to manipulate inflation measures down. Local job guarantee commissars are incentivized to cronyism and corruption.
  • NA
    N A.
    8 July 2020 @ 11:33
    Typical academics all theory, never done an honest day's work in the real economy to truly understand. Tell you what Prof, print more money and pay my TAXES, then you are onto something.
  • DO
    DIOGO O.
    7 July 2020 @ 12:02
    A lot of what professor Kelton is saying makes sense. HOWEVER, one MUST combine it with professor Richard Werner and Steve Keen. Professor Kelton, she thinks the Government creates 100% of the money supply. It is the BANKS, through loans that do 97% of that job. Without bringing in Werner's Disagregation of Credit (wich is the real money creation), one cannot make sense of Kelton's ideas, also SHE cannot fully comprehend what must be done to change these system. MMT + WERNER + Steve KEEN = NEW PARADIGM IN ECONOMICS
    • DN
      D N.
      7 July 2020 @ 12:37
      What if the government creates it but puts it in the hands of those who will spend it vs putting it onto bank balance sheets whereby it only gets "spent" when loans get created?
    • JA
      Jonathan A.
      7 July 2020 @ 14:25
      I think Keen would agree with Kelton. From his RV interview: “ They've (the banks) been given a gift by the public sector, there we're responsibilities that go with their gift and we should enforce them and we haven't been doing it because we believe they worked for it, believe them, that they're God's gift to creation. That they're God's gift to have-- I want to say God's gift to women but I don't believe it, but they believe that they're the, what, the Masters of the Universe? Bullshit. You're the Sorcerer's Apprentice, you're not the master at all. If you want to go back to being the Master of the Universe, start issuing your own private money and see what happens.”
    • RW
      Richard W.
      8 July 2020 @ 08:36
      This is so true - the vast majority of people do not understand how money is created in a modern economy. It is created by banks making loans. The double entry in a bank's accounting system is basically very simple: Dr "name of person loan account" - this is the bank's asset Cr Loans made account - this is the bank's matching liability et voila
  • CW
    Chris W.
    7 July 2020 @ 06:39
    Wouldn't addressing inflation with precision through targeted taxation require an accurate means of identifying and measuring the degree of that inflation and then having the political means of agreeing on a course of action? It seems that a more general taxation would be applied which would benefit those with the greater influence thus unfortunately further increasing the wealth divide. Certainly the recent examples of expending the money supply has not worked for the majority.
    • MA
      Mohammed A.
      8 July 2020 @ 08:35
      All kinds of taxation do not control inflation. For eg, govt can tax a lot of money from billionaires without much effect on inflation. It's the spenders in real economy that needs to be reigned in through higher taxes to control inflation, and that would be political suicide for the politician who does it.
  • DA
    David A.
    7 July 2020 @ 15:05
    Interesting discussion... one point struck me as odd, however. Paraphrasing...A government deficit of 10 is a surplus somewhere else in the global economy. As an American, this ‘somewhere’ is critically important.
    • MA
      Mohammed A.
      8 July 2020 @ 08:04
      In the current system, private debt also has the exact same effect. Borrowing and spending creates new money and someone else got richer.
  • GS
    George S.
    7 July 2020 @ 23:17
    This monetary theory starts with political objectives and then searches for monetary policies to support them. Unfortunately the Fed & Treasury are now working in unison so it is only a matter of time until we have full blown MMT but it will take a political majority in all 3 branches to redo the current legal landscape around the Fed. They’ll need to officially merge to get as proactive as Prof. Kelton wants to get. I think it’ll work until it doesn’t. Maintaining reserve currency status will be key. This is key to the Green New Deal & UBI or work guarantee. Incredible how people are cheering on big government. I understand big business has failed us but man, people really value security these days more than freedom. I hope I live long enough to see big government fail and people actually yearn for freedom and independence.
    • iL
      ian L.
      8 July 2020 @ 06:02
      Just move to Hong Kong to see freedom and independence disappear.
  • DH
    Daniel H.
    8 July 2020 @ 03:43
    Really wish this was a more adversarial interview! The interviewee should have to defend their ideas—especially ones as controversial as this I can think of several notable economists that would do a fine job of being tough but fair as the interviewer.
  • ar
    andrew r.
    7 July 2020 @ 14:47
    Fair enough. Now interview Bob Murphy for the counter-perspective.
    • EH
      Edward H. | Real Vision
      7 July 2020 @ 14:51
      Makes sense. I will reach out to him. I think the Austrian view hasn't really been given full treatment on RV in a while.
    • SW
      Scott W.
      7 July 2020 @ 14:53
      Seriously RV. You've hosted the leftists. Get the Austrian libertarians on. Murphy would be great.
    • EH
      Edward H. | Real Vision
      7 July 2020 @ 14:56
      Done. Hopefully he is interested.
    • ar
      andrew r.
      7 July 2020 @ 15:08
      https://mises.org/wire/review-stephanie-keltons-deficit-myth
    • KG
      Kurt G.
      7 July 2020 @ 16:39
      Ed, I recently heard from Jim Rickards that RV mothballed a debate from several months/years ago between him and a prominent MMTer. Will RV be airing that debate? If not, why not?
    • NS
      Nick S.
      7 July 2020 @ 20:49
      Why not Bob Murphy ánd Stephanie Kelton..! Ed H as a moderator.
    • AW
      Andrew W.
      8 July 2020 @ 03:27
      ^ Bad idea, as Ed has already slipped his pro-MMT bias over time.
  • MH
    Martin H.
    8 July 2020 @ 00:37
    You can't print wealth. Wealth belongs with those that can generated more wealth to the benefit of all. MMT basically steals from those that can generate wealth and gives to those that can't. Government distorts all it touches. Fastest way to destroy a nation. These people are stupid in the way that only academics can manage.
    • AW
      Andrew W.
      8 July 2020 @ 02:40
      Yes, the fundamental problem with MMT is that it relies on the assumption that government can effectively allocate money to productive activities, which it absolutely cannot. So there would be no difference between a federal jobs guarantee and simply printing everyone a check. Eventually, you just get shortages of the things people actually need and want, a degraded quality of life, and stagflation.
  • DS
    David S.
    7 July 2020 @ 22:47
    It would be much better to just say we need to print a lot of fiat money because the US must open the economy and most governments, corporations and people were stupid. They did saved for any white swan events much less black swan events. While printing all this money, we need to lay out a plan to encourage more resiliency in governments, corporations and citizens. By couching MMT as a new theory we deceive ourselves while shooting ourselves in the foot. It is just printing money to pay for "things." That is nothing new. It has been going on since the barter system started to accept shiny things for exchange. I am sorry, the US dollar is not very shiny. Gold is shiny. DLS
    • DS
      David S.
      8 July 2020 @ 02:22
      Sorry, ..they did not save ...DLS
  • NS
    Nick S.
    7 July 2020 @ 21:40
    Great overview of MMT on a conceptual level, in a very articulate way. Thanks RV & Prof. Kelton. For a next time, please consider a format of a debate between an Austrian economist & MMT'er..
    • B
      Bob .
      8 July 2020 @ 02:12
      I am glad you had Dr. Kelton on because I think everyone needs to be thinking about this important topic. I would love to see a discussion between Dr. Lacy Hunt and Dr. Kelton. Dr. Hunt would slowly and with grace take apart MMT. II think MMT is a house of cards at best. Here is a scenario I was thinking about around whether debt matters. I think many believe that at some point the USD will no longer be the world's reserve currency. Imagine if that happens at a time when the U.S. has a massively expanded sovereign debt. Debt could no longer be ignored. Debt would matter. Debt at that point will not only matter, it will suffocate growth. There are other similar scenarios that can get us to the same "debt matters" moment. For this reasom I believe MMT is a problem in the short-term and a huge disaster waiting to happen in the longer-term.
  • DB
    David B.
    8 July 2020 @ 01:30
    So why do we have to pay taxes? Can't the government just "create" my tax liability for me?
  • DL
    Darryn L.
    8 July 2020 @ 00:33
    I have got the book but yet to read it so it may go into more detail. I found this argument more about politics. There wasn't much about how this monetary system would actually work, like what money represents. I think most people know intuitively that the paper and ink isn't valuable, it's what you gave up to get it and what you can get in return for it. There was the one comment that "we don't need to borrow from anyone" that I thought was a bit scary. To me that implies that the paper and ink itself is valuable so can just be printed to pay for things.
  • Nv
    Nicholas v.
    7 July 2020 @ 07:50
    This is essentially a defense of MMT. Yet Stephanie fails to follow her own rule: "first define the problem."
    • DS
      David S.
      8 July 2020 @ 00:11
      Second define the theory. DLS
  • MT
    Mike T.
    7 July 2020 @ 08:59
    in advance this post will be of zero interest to anyone else on the RV forum, the only value is to myself personally in that I need to make a public confession........ I do not have sufficient emotional or intellectual maturity to offer a valid critique of Professor Keltons ideas. I've tried twice to get through her book and failed on each occasion. I intend to try again to complete but right now I am Profoundly disturbed and need to lie down for a while and calm down.
    • MT
      Mike T.
      7 July 2020 @ 09:19
      ..... one more thing, if anyone posts a comment akin to "this time it's different" it may tip me over the edge.
    • JL
      John L.
      7 July 2020 @ 19:52
      I’m appreciative of the interview so I can understand how fully flawed it is and gives me MORE confidence to buy gold.
    • DS
      David S.
      8 July 2020 @ 00:09
      Mike T - Rest assured it is not different. Politicians need economist to confuse the electorate so they can spend to get re-elected. Same old story. DLS
  • PT
    Philip T.
    7 July 2020 @ 13:53
    Her case for MMT is bankrupt of basic economic principles. At least both interviewer & interviewee stated how corrupt the Trump administration is, so we know their bent. More government control of our economy will fix things until control can be handed back to the private sector (when has that ever happened?). This is a great prompter for buying gold. Gold investors should load up on more gold and then fund a book tour for Kelton. Sad for the country - more dependency that won't end well.
    • DS
      David S.
      7 July 2020 @ 23:55
      They can be wrong about MMT and correct about our current Administration and Congress. DLS
  • DR
    David R.
    7 July 2020 @ 13:59
    This is why US stocks and others are getting crushed by gold. The US dollar, already the world's weakest major currnency, has nowhere to go but zero. Imagine the riots in the streets as that happens! Pity anyone living there.
    • DS