Stephanie Kelton Talks with Randy Wray

Stephanie’s latest podcast. This episode is a broad-ranging discussion of conventional economics and the heterodox alternatives to IS/LM, Ricardian equivalence, among others.


6 responses to “Stephanie Kelton Talks with Randy Wray

  1. Jerry Hamrick

    Professor Kelton: I listened to this podcast, twice, and it was very interesting and instructive for me. Toward the end of the conversation you talked about someone raising his hand and asking Larry Summers, “Why bother borrowing money to finance infrastructure investment when all we have to do is print it?”

    Later, Professor Wray mentions that deficit/GDP ratios would be meaningless in a new system.

    Still later you ask Professor Wray what he thought about the possibility of discontinuing the issuance of government bonds. He said that this would require a long public discussion, and mentioned pension funds, etc. But is his concern about the political aspects of this issue? Isn’t the answer very simple, absent the barriers thrown up by our present personalities, parties, and systems?

    I can see how the two of you can glide effortlessly from one context to another, but I have a hard time following the shift.

    So, let me ask you the question you want someone to ask Larry Summers. “Why must we issue government bonds at all?” Under MMT we should just print what we need, or as one of you said we should just use a computer program to issue credits. But even in that context one of you talked about collecting taxes. Why would we need to collect taxes ever again? I can see that we might, probably, need a mechanism for draining dollars from the system but there are many ways to do that in a new system that would eliminate taxation totally (except for certain special needs, and then I wouldn’t bother to call it taxation). But apart from managing inflation why wouldn’t we just credit accounts and worry about the purposes to which those credits are applied?

    Finally, I have often heard it said that if you want to have a best-seller then write the book you would like to read. I know what I would like to read, but I can’t even begin to write it. But one of you in the MMT group must have already written it. What I want to read is an economic textbook for students that would be written for the new MMT system. Where is it? I want to read it very much. Would we have the Fed? Would we have taxation? How would we deal with other nations? What if all the other nations adopted the MMT system as well? Would we have one currency? What would happen to the IMF? I know that y’all have the answer to all these questions and more. Please tell me the name of that book so I can buy it and drain the confusion, on this subject at least, from my brain.


    • Jerry, here is a textbook in process:

      Modern Monetary Theory and Practice
      Bill Mitchell and Randy Wray
      Our (very incomplete) textbook home page –– has draft chapters and contents etc in varying states of completion. Comments are always welcome.

      Also, I have set up a website with links to MMT overviews and topics.

      Modern Monetary Theory in Canada

      • Jerry Hamrick


        Thanks for the links. I have been reading.

        The textbook has interesting chapters, but the ones I am most interested in have not been published yet. The 99% draft has a lot of information that I have seen before in other places about how MMT works and what it could mean to the people at large. I was introduced to the concepts that are now called “MMT” starting in 1949. Over a period of eight years I listened to adults discussing the pros and cons of the gold standard and related ideas. It was not daily, but it was nearly weekly. The part that fascinated me the most was the idea that money would not be scarce. I remember one man saying repeatedly about gold: “Hard money causes hard times.” This idea is simple and I got it, even as a little boy. The men discussed what could be done with ready money, or as they called it, “Rocky Mountains made of gold.” They were all children of the Great Depression and they could see what government spending could do. They recognized what government spending in WWII had done economically. They were comfortable with FDR’s experiments. They were ready to build a better nation and they were open to progress. I think that most Americans today are just as receptive to change as those men in that long ago time. But today there are no leaders selling a better future. Our leaders forecast a bleak future.

        I am very sympathetic to the ideas of MMT, and have been so for decades. When I came upon the MMT school some years ago I was excited, but I can’t see it gaining any traction. I hope I am wrong, but I fear I am correct. This is a critical time as everyone who supports MMT already knows, but our national leaders are moving us in the wrong direction, they are moving us deeper into the old, austere, stagnant, depressing morass. And unless something is done to change that direction, climate change will be much worse than it has to be.

        Henry David Thoreau was right when he said, “the mass of men lead lives of quiet desperation.” These are desperate times for the 99%. They are looking for leadership. FDR got the chance to implement his ideas because he followed the failures of Herbert Hoover. And he kept that power for many years because he made things better for the People. So that is what MMT should be selling. But there seems to be a lot of hesitation on the part of the leaders of the MMT school to take risks. FDR took risks, he was a man of action.

        I guess I better stop my rambling. There is something to MMT, but it does not seem to be getting anywhere. I don’t have the answer, but I am working on it.

        Thanks again for the links.

        • I hope the guardians and economic participants of this blog are taking your words to heart, Jerry. You make a lotta sense. And I understand precisely what your misgivings are.

  2. Erick Borling

    The question to Larry Summers proposed by Dr. Kelton is indeed the nation’s economic research question! Treasury issuance of debt instruments as though it were the essential means of an air of legitimacy — so to speak — to the endogeneous sovereign currency seems to be at the heart of the deficit madness. Hard leftys and rightys still can’t stomach the idea that money is really just numbers on paper as though that were a fallacy which it is not. I owe my plumber some unit of value for his work, and he owes his electrician some value of his work, ad infinitum. “The economy” is the numerical accounting of what people think they should be paid, what others believe they must pay, the payments that occur, and it’s just a bunch of numbers who cares if it’s written on toilet paper or papyrus. (Let’s not get into the counterfeiting morass.)

    As to the MMT best-seller, everyone will advise Mosler’s Seven Deadly Innocent Frauds of Economic Policy as the primer on these facts. Still… I agree that the progressive economists and the progressive think-tankers would be a great help if they simplified this for me and the rest of the hoi polloi.

    Great podcast Dr.s Wray and Kelton! I appreciate the sound quality as I have complained about that at least twice hithertofore.

  3. the rest of the hoi polloi

    Thank you, Jerry and Erick, for your remarks. For MMT to be understood, the proponents need to be clear in their own definitions and concepts. An added burden is to help the hoi polloi transition from the old paradigms to MMT.