Category Archives: Stephanie Kelton

Former Deputy Secretary of the U.S. Treasury Department Endorses Modern Monetary Theory (MMT)

By Stephanie Kelton

Three months ago, Frank Newman sent me a book entitled Freedom From National Debt.  I finally got around to reading it — all 89 pages.  It’s a little book, packed with evidence that America is being held back by incorrect assumptions and misguided fears about the national debt and government finance in general. Here’s the takeaway:

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Some Academic Literature on MMT

By Stephanie Kelton

I presume Alex Little put this together after reading the NY Times piece on Warren Mosler and MMT in which I was (mis)quoted as saying that MMT has no footprint in the academic press.  It’s not an exhaustive list, but you’ll be exhausted by the time you reach the end.



The Buzz Over MMT

By Stephanie Kelton

The blogosphere and Twittersphere are buzzing over today’s NYT article on Warren Mosler and the proponents of Modern Money (or Monetary) Theory (MMT).  This isn’t the first time MMT has been featured by a high-profile mainstream media outlet (see here, here, here) and, as usual, there are some editorial inaccuracies.

Warren has responded to the mistakes that affect him personally, and Randy Wray followed with some quick thoughts of his own.  I spent close to 30 minutes on the phone with the journalist who wrote the latest NYT piece, so let me offer a further correction of (and for) the record.  I was quoted as saying:

These ideas definitely aren’t disseminated through published academic journals. It’s all on the Internet.

Um, no.  What I said is that we — the academics who helped develop the literature on MMT — started blogging as a way to get our ideas out more quickly than through traditional channels, where it is customary to wait two years or more before an article is finally published.  The notion that MMT has no academic footprint is astonishingly inaccurate, for there are, quite literally, hundreds of publications including: peer-reviewed articles, books, chapters in edited volumes, encyclopedia entries, working papers, policy briefs, etc. in print.  Suggesting otherwise supports the general tenor of the NYT piece — i.e. MMT is an Internet phenomenon that hasn’t been vetted through traditional peer-reviewed channels. That is patently false.

Has the Internet helped to generate a following?  I’d say so.

And it seems to ruffle a lot of feathers.





Drop It: You Can Call for Helicopter Money but Drop the Call for “Coordination”

By Scott Fullwiler

I suggested more than three years ago that helicopter drops are fiscal operations (printable version here), in contrast to the more traditional view that they were monetary policy operations (e.g., “Helicopter Ben”).  My argument was based almost entirely on accounting and, therefore, on the actual balance sheet effects of a money drop.  True helicopter drops of money raise the net financial assets (via income increases) of the non-government sector, which is exactly what fiscal policy does but not what monetary policy does.

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Morning Reads

Here’s some fiscal insanity from Japan, where they’re trying to juice the economy with Abenomics while simultaneously promising massive austerity ahead.  I’m sure that will prove very reassuring to markets.

Here’s another heart-warmer. Bank of America  has decided it’s been paying U.S. workers too much to review mortgage and other loan documents.  So it’s off shoring those jobs.  Now workers in India will be checking off on those appraisals, etc.  It should help the “struggling” conglomerate.

Finally, The Guardian reports that Ireland has fallen back into recession “despite” its multi-billion euro austerity drive.  The fact that they use the word “despite” shows you just how far we are from collectively figuring out the obvious.

Good luck to us all.


A Contest: MMT for Eighth Graders

What’s the best way to communicate the principles of MMT to an audience who doesn’t know any economics?  Can you draw out the implications of the sector balances or explain the importance of sovereign money without complex jargon?  Can you do it a way that will resonate with the average eighth grader?  Can you do it in 25 words or less?  We’ll collect the best submissions and post them next week.  Give it your best shot!

*UPDATE*  I can see that we are off to a bad start.

Identify a single MMT principle and then explain that principle in 25 words or less.  We are not asking you to explain *all* of MMT in 25 words.

“Without jargon” means that you should not use words like: “fiscal”, “reserves”, “GDP”, “debit”, “credit”, “policy space”, “bonds”, “capital”, “austerity”, “monetary policy”, etc.  You’re communicating with someone who has an eighth grade education, people!   In the USA.  Think about what that means.

The Layman’s Case Against Austerity

By Stephanie Kelton

Steve Kraske of The Kansas City Star recently interviewed me for a piece about austerity.  The story ran in today’s paper. It doesn’t provide much depth (unlike bloggers, journalists have strict space constraints!), so I followed up with a few comments on the Star’s website.  I thought I’d share them here, since I’m always trying to improve the way I communicate these ideas with non-economists.  So here’s my best effort to make the anti-austerity case in simple terms. Continue reading

Making The Case Against Austerity

By Stephanie Kelton

Neil Irwin at Wonkblog has a new post up:  The Deficit is Falling Fast. Can Washington Accept Victory?

He quotes John Makin of the American Enterprise Institute, who says, approvingly, that the U.S. has probably imposed enough austerity “for now.”  Then he shows us the evidence. Continue reading

The Truthseeker: Looting of America

NEP’s William Black and Stephanie Kelton appear on RT’s Truthseeker. This episode focuses on the looting of America.


Stephanie Kelton and the Sequestration on UP with Chris Hayes

Stephanie appeared on UP with Chris Hayes this morning (3/3/13) discussing the sequestration. You can view the program by clicking this link or the image below.