How MMT Can Help Us Understand the Economy 

I was really interested to know what Stephanie was going to say about how she would advise the Japanese to increase inflation. Joe interrupted and talked over her as she was about answer so I never got to find out. Thanks Joe👎🏻

If this theory becomes mainstream, libertarians and Austrian economists will cheer in 10-15 years time, as MMT will inevitably help collapse whatever country or economic region it's implemented in.

The atmosphere in the studio seems a bit anxious, defensive, passive aggressive ...

One thing the MMT's are missing: An understanding of human nature and the real world, and how individuals make decisions.

Watching this during the pandemic. We have just woken up to something like this.

"If the government spends $100 into the economy and only taxes $90 out, we call that a deficit. But no, no, no, there's a surplus of $10 somewhere else." That's true but this is literally inflation. You increased the money supply without increasing demand for goods and services. Yeah, people will save more because they have more dollars to chase the same goods and services. But the value of their savings is now diminished thanks to the increase in the money supply relative to the increase in goods and services.

I have nominated Stephanie Kelton for Secretary of the Treasury. "We are here to figure out how to do it." or "We are not here to figure out how Not to do it." Many of the people you will know in your life are secure from figuring out how not to do things. 15 dollars an hour and benefits is what the Federal Jobs will pay. The minimum wage is 7.25 but it is unrealistic.

In a growth situation where corporates are meant to be hiring, if the wage offered is lower than the proposed government guarantee ($10-$15), would the government force people off into the private sector? I mean if not, isn't this manually-sustained demand (price) for labour going to ultimately lead to inflation to which interest rate controls are weak as M1 would be sustained at an artificial level?

Keep up the good work

An interview she did on Feb 8, 2024 titled “Was MMT right about inflation?” at 12:25 she says, “We are getting real GDP numbers that are eye popping”---She is ignoring the elephant in the room which is, how much debt was incurred to get those “eye popping numbers”? In 2023 the US government borrowed $3.2 Trillion, of which only $2.4 Trillion of GDP was recorded. The remaining $800 Billion generated ZERO economic activity whatsoever. She talks about the “multiplier effects” yet every 5 year period since 2006, GDP grew by much less than the increase in the debt which means that money vanished without generating any GDP activity. We would have been far better off taking the entire $3.2 Trillion borrowed and spent it entirely on battle tanks and aircraft carriers. We would have gotten at least $3.2 trillion in economic activity from such wasteful spending and that is with no economic multiplier effect, which is pretty hard to do. This consistent, horrific economic multiplier effect of less than 1, for the last 18 years goes against MMT theory. This theft from the US populace shows that government cannot, and should not manage all but the smallest amount of public money since they are evaporating money in a way that not even the Mafia could do.

Haha... 6 months later and all Western Governments are explicitly (UK) and implicitly (US) running MMT.

Federal job stabilizer - something that could have come in handy now in the coronavirus crisis !

great questions

Stephanie should explain these concepts to the House and Senate leaders. Nominal vs Real policy decisions are difficult to measure in real time. Changes to policy always take months before outcomes are known. P. Ryan questioned A. Greenspan years ago about Social Security being solvent. The response Greenspan gave Ryan as if speaking to a 10 yr old was priceless. Greenspan followed the economic period of Paul Volker's epic battle with inflation borne out of the 1970s and the VN War. Interest rates had reached over 18%. I wish I had been old enough to grasp the severity of that era being a HS student in the J. Carter administration. We were not told enough about economics and policy back then.

Why is the male moderator talking so loudly?

MTT is refuted by the performance of the Singaporean economy, who's government not only has zero net debt but ran a 3.84% GDP surplus in 2019. MTT would suggest that such huge surpluses and creditor status would degrade the economy. Furthermore, here is a list of creditor nations in general where you will find the wealthiest countries in the world, including the leftist utopia of Norway, the country with the largest surplus wealth fund. en.wikipedia.org/wiki/List_of_creditor_nations_by_net_international_investment_position_per_capita

Where DO they find these smarmy self-satisfied young men?

i thought for a moment the title of this video said : How DMT can help us understand the economy!

Why is that so much money(from QE) sloshing around and at the same the velocity of money is so low? ANswer: the QE money is mainly used for Corporate buybacks. Tell me I am wrong.

15:12 15:40 16:13

If the models that you followed brought you to this place, of what good were the models?

The fact that she's an advisor to Bernie tells you all that you need to know about her competence in economics.

Doesn't Harvard have 30 Billion dollars just laying around. A whole country full of kids with no way to pay for their education. Where is the responsibility in that MMT?

She said that reason workers don’t get wages raised is because there are no unions, and explained that no one think that a way to get wage up is to come to the boss and negotiate for it... in what planet is she living in? Maybe she never lived outside academics. In the private sector demand or lack of it is reason to get your own wage up or not, if you want to get better salary move up or lateral to a profession where there is more demand and salaries are climbing for example now is a good time to be a data BI or ML engineer, demand is high and so are the salaries. It’s not because we don’t have unions that wages are stagnant in the US still amazed she said that, that does not sound to me like an economical data driven comment that’s an ideological position.

Wow….now catching up on this. Seems to me the flaw in it all is how to get government to stop spending once inflation ticks up….and that they will spend money on non productive activities.

If Stephanie Kelton and her cohorts would provide a clear definition of "money" and its role in a price system, she would destroy her entire argument. Artificial changes in the quantity of money distort the resource allocation performed by the price system.

She said we were losing 800,000 jobs A MONTH, like it was shocking, Seems so quaint now doesn't it.....

She starts by saying that there is no one explanation of what MMT is and then goes on to say later that they have gotten everything right? You can't know something is right or wrong unless you have something to compare it with. "It depends on where you are and in which cycle?" She talked a lot and said nothing. Afraid most of the panel did the same thing. I suspect they will all share drinks and canopies later in their upper middle class bubble.

If u can't solve a problem in a sensible way make up some scholarly jibbarish and hope the majority will swallow it at least for the short term.

I’m always disappointed when I listen to Kelton - with the exception of her last bit on the jobs guarantee, she does not explain anything very well in this - it’s a shame MMT does not have more effective spokespeople. Moreover even when questioned on fed rates, once again there is no talk about the effect of the banking system on the money supply in the economy. This essential area always seems to be missing from anything I hear from Kelton or on MMT and it is a shocking omission from their analysis.

By all accounts, Stephanie began an MMT Career by becoming a qualified Analyst of the economic theories of Bill, Warren, Randy and the Observable circumstances of political Economics (indistinguishable from propagandists) who have consistently been opposed to accurate Accountability for their policies. The Nomenclatures, the language or jargon of economic thinking is a brand of sympathetic magic in which money is able to confer an unwarranted importance, objectify exclusive concepts and materials in a pejorative, party/partisan manner. In other words, Stephanie estimates the consequences of Observable Actuality in human behaviour. (Who's Opposed to the "control fraud" and Dark Money?, Bill Black has called for an end to)

MMT=printing, pure and simple. Using debasing the currency to finance deficit and in doing so severely disrupting the economy by creating misallocation of ressources and investment in gigantic scale. A simpler way to look at it is that MMT is a very insidious way tax peoples and saving (and because the US dollar is so wide spread it is like the US is taxing the whole world using inflation).

Inflation rate = monetary growth - gdp growth

I have studied MMT for 4 years. I agree with 99% of MMT, but the idea that higher rates are stimulus is RIGHT ceteris peribus, but it is WRONG in reality. After 40 years of Fed puts and multiple expansion in the stock market, if interest rates are raised, APPL would be trading at 12 times earnings at 5% interest rates rather than 35 times earnings at 0% rates and QE. Imagine if everyone woke up and there stock portfolios were down 50%! Higher interest rates would also tank real estate and yes, money would flow from the gov to the private sector thru bonds, but net worth would crater and this would be restrictive, not strimulative. Someone please tell me why I am wrong

Why are phd baristas not paid more? l A c K o F u N i O n S

If you have to start the explanation of your flagship idea and theory with, "It's like the impossible question to say what MMT is all about" then you know it's garbage.

So being a democratic socialist . I was intrigued to hear there is a libertarian socialist caucus? So I goggle it . After what I read my thought quickly went to Amish they could really fit that definition.

Easy question. They can't because they are drowning in the corporate funded bubble.

Narratives, lenses, frameworks...she failed to explain the subject clearly.

Google and search for countries that have no debt and deficits and ask yourself if you really want to live there and raise a family.

Very interesting identification of potential short comings of established economic thought. However the solution of the government absorbing unemployed workers would lead to an expansion of the government versus private sector and socialism has a horrible track record. I would prefer to use stimulus checks to ameliorate downturns. But I do like the discussion at least of having stimulus checks automatically kick in under certain conditions as congress is very slow. i.e. failure of the first TARP vote, inability of Trump to get all the stimulus checks he wanted approved etc. Very interesting as always. I love Oddlots.

Well, let's print $20000 for everyone!

What I'd like to know is how the economy knows we're doing MMT. When various governments have done exactly the same thing it has always led to rampant inflation, if not stagflation. This time, when we do exactly the same thing, we're guaranteed the opposite result. So clearly the only thing that matters is that we label it something different. The patina of this term will act like a protective coating against historical precedent and basic arithmetic. It sounds great and I'm all in, I just want to know how the economy knows this is what we're doing so it reacts in the approved manner instead of the way it has always reacted when it didn't know any better.

She said MMT is updating the lens from which you see. How about put down the camera and quit taking pictures and see it in reality for what it is......dangerous!!

So, using MMT, when if ever would your raise the interest rate? I'm one of many in the Millenial and undergeneration, and I, for one, have never ever seen a decent savings rate in a bank. I think if MMT is used, it will incentivise not saving money and will make economic inequality massively worse due to the government picking and choosing who does and doesn't qualify for help. Honestly, it sounds like the stereotypical communist state where everyone is equally poor, except the politically connected. But maybe I'm wrong?

And if she is wrong, will she bare any financial responsibility for the consequences of what she is saying?

Judging by some of the negative comments, the religion of Hayek, Mises, and Friedman lives on. No matter how damaging it is to the bottom quintiles. Anyway, I love what she said about a mechanism to maintain employment during steep down turns. If we'd focused on keeping people employed like we did on saving the banksters, we'd be in a lot better shape, and the orange one would still be hosting that shitty TV show.

I'm interested in unintended consequences ei student loans cause higher education costs to go up. welfare reform took jobs from high schoolers and part timers and created working poor... stuff like that.

Kelton looks tired

The Kelton slide of hand trick (some say peak with forked tongue ). - She talks about deficits and surpluses (at the 16:20 section of the video ) and makes a case that government deficits create a surplus in the private sector. She says if government spends 100 dollars into the economy and only taxes 90 dollars out we label that a government deficit . Then she changes the wording from "surplus" to pretend it is the same as adding to "savings" . A Surplus is not a Saving." NOT SO at all - since "savings" do not come from deficits in the government sector. They only come from people spending less than they earn. There is no causal relationship between them.

Here's a suggestion, stop thinking you can engineer an economy.

Talking about the game being played while the stadium is burning down.

The bots are liking this shit massively

L Kelton on MMTsay it has gotten- Nothing of the big things WRONG ???? - Who are you kidding. - It can't explain so many things that it professes to that its like a sieve pretending to be a water holder but claiming that except for the little leaks it's water tight when it passes every bit of water instead of the part with wire mesh.

money printer go brrr

She makes little to no sense at all. I came here to get some understanding her MMT and not once did she explain the fundamentals of her policy. Absolutely disappointed

Theres no way to say what MMT is. Its a group project. WOW. If you cant define it, you have no business arguing for. Mystic.

17:00 um, deficits add to the debt per tax payer which at this time is $189,585 according to www.usdebtclock.org/ . So, the bankers goal is to keep most everyone perpetually in debt. Correct? Explain it to me because I can only do simple math. Not MMT math.

what an amazing woman ?

People like Stephanie Kelton give me hope for the future. Unions helped to create the middle class.

MMT could only work if we have a one world totalitarian government. I'm sure it would be the best Economic theory for a totalitarian regime. The problem is, we don't want a totalitarian regime.

Given time unions collectively bargain their jobs away. (Ask me how I know.)

Currency has evolved from a form of barter to a form of legal governance of property. Barter is the simplest purpose of money - we're passed that. It's better for resources like gold to be allocated as manufacturing inputs than to be tied up in governance that a low-cost piece of paper or digital account can do. MMT supports this new view of currency perfectly. Though, I don't agree with Kelton's point that debt doesn't matter - debt matters quite a bit when servicing costs start eating into productive allocation of wealth. If the assets purchased by debt are functioning at optimal productivity, they should yield a greater return than the cost of debt. So debt should be used as a benchmark against which we measure total productive capacity of our resource allocation. National debt doesn't necessarily need to be 'fully paid off', so long as the GDP growth of a country outpaces its respective growth of debt. This will allow for safe deficit spending without worrying about it spiralling out of control. If debt levels grow faster than productivity (viz. GDP), as is the case today, we need to step back to understand where misallocation leakages are happening in the economy. And we can find that answer in today's financial sector. Banks, having been conceived for the sole purpose of making money by facilitating transactions, currently work as mediators for the flow of money. They were born out of necessity. Now that we understand how the financial system works in its entirety and financial innovation has reached its apex, banks can and must be pared back in their autonomy and ability to market financial securities that are created for the sole purpose of fattening the bottom line. In other words, greater financial regulation will actually work to reduce the cost of debt significantly. If the cost of debt is reduced, a greater number of resources can be allocated to research and development and tech (productivity) to allow for a net positive effect rather than the spiralling net negative effect that we find ourselves in now. To sum up, MMT can and will work if financial institutional autonomy is pared back and regulated. Only then will the compounded benefit of productivity outweigh the compounded cost of debt. Until then we will continue running on this hamster wheel until a bolt breaks loose and sends it straight to hell. MMT will prevail. But I'm not particularly fond of Kelton.

Sooooooooooooooo many of these questions can be answered with one word. Greed.

The backbone of the economy is business. She clearly has no clue about how a free market works.

The central point is that a sovereign state can always and ever redeem its own debt. Governments are not household or businesses. Governments issue their debt in the currency that they can always redeem. You and I can't do that because we can't create our own currency. Greece can no longer do that as all Euro currency countries cannot. That is why the EU is falling apart.

A caricature of MMT is more palatable than the reality of it.

Mrs. Kelton:"Inflation is a very complex phenomenon." Her answer to that complex phenomenon:"It is mainly bargening power." What a complex answer to this complex phenomenon ;-) Then she talks about the old myth (not only advocated by MMTers) that govt spending increases private sector savings, or i. e. "my debt is your income": On a marco economic level this is complete nonsens because it is only shifting money from one entity to another. Debt and "income from debt" are offset i. e. are in sum zero. The so called surpluse for the private sector (creditor) is offset by the deficit of the govt (debtor). The real wealth will only be "palpable" in the economy once debt is paid down. Only at this point the economy has acutally created the real goods and services for all economic transactions that have been stimulated by debt. Only then (my) income out of debt will be transformed into real wealth. If the debtor defaults the creditor will learn the hard way that this income from debt was built on sand, since the creditor will have to write down his debt claim to the real value. But not only Mrs. Kelton and the MMTers have a hard time to think on a macro economic level.

this was absolute nonsense

I think the issue people are having with MMT is they believe money is inherently valuable. Answer this question. Let's say we went back to the Gold Standard. What do you want more? Do you want the gold or do you want what the gold can buy? If you want the gold more then I question how you feed yourself and what you even do with it. If you say you want what the gold can buy then answer this question. Would you rather trade a tiny piece of gold for dollar menu burger or a piece of useless paper or digits? The point I'm getting at is, it's completely pointless to have currency that has value higher than the thing your buying. Money does not need to be valuable. Because our money isn't valuable what makes it valuable is totally dependent on our productive capacity. So you trade a dollar paper or digit for as burger not because the paper or even the burger is intrinsically valuable in and of themselves but rather because the entire point of the dollar is to provide a common medium of change for goods and services. So once you take away the value of currency all you're left with is the value of what you're buying. And I would argue what your buying should be more valuable than the medium of exchange you're using to buy it.

As a bitcoin owner I LOVE MMT!

Good luck...you're gonna need it

MMT should be banned along with CRT.

I think the lack of inflation has a very simple answer. First of all, we do see inflation in certain things like education and healthcare. More importantly, because we have huge income inequality and most of the created money is going to the very tippy top; so that money is not running around the economy. We know that trickle down, supply side is garbage and the super rich don't reinvest that money like claimed. They all basically throw it in their money bin ala Duck Tales. The rich do that by buying equities. Which also explains the inflated stock market values.

She is very deceitful and ultimately unconvincing, with a rapidly declining reputation. I subscribe to the views of classical economists, like Adam Smith, Hayek and Friedman. I study history to see that excessively lose monetary policy leads to a slow but crushing decline of nations, like what happened to Roman empire, Greece, Ottomans, France, Germany, Japan, Argentina etc. Yes, MMT is a blank check for governments to borrow (or print) unlimited amounts of money, with the horrific consequence of what that brings down the road: total destruction of $. Debasing currency leads to destruction of trust and credibility, which is the main basis for any monetary transaction.

you can't print your problems away

945

2:30 thief

MMT is not new and some of its notable successes are in Weimar Germany (1920s), Yugoslavia (1990s) and Zimbabwe (2000s).

Bernie Sanders school of economics - where the tuition is free, and yet, overpriced.

Unions have been far more than "decimated."

The very background rational of this theory has been absolutely failed in some emerging markets already.

The amount of trolls in these comments are unjustified. Makes me think this is worth further exploration. Why have we not had massive inflation since 2008? Why is the yen still strong? Inflation is just not that simple to understand and does not affect every sector of the economy in unison

Yeah, rationalize blowing up the deficit. "You think we're bad, think of what the democrats would do". Laughable especially with the events of the last month. Hope they're embarrassed.

Kleton's badly researched idea that there is no inflation worry from deficits has come back to bite her in view of the US inflation rate of 7% or more that is going up not down!

The shit was made for our benefit. Give us the damn money!!

Did he say "cut interest rates to increase inflation "?🤔

Kleton wrong again. Lowing interest rates is not tantamount to fiscal expansion. They are separate actions and only the Central banks can participate in the fiscal expansion that increases the base money supply. Kelton like other MMTers confuse these two concepts and that is why they get in a real muddle and cannot discern between increased leaning on credit in the private sector which cannot participate in base money expansion and central government money expansion in which the monopoly Federal reserve manufactures new base money and uses it to pay for purchases of treasury bonds.

Trolls below

Utterly ridiculous

This sounds more about politics than economics.

Rubbish. never take seriously anyone that wears a t-shirt, especially one with "university" printed on it or an apple watch on their wrist.

Talking like she's right with total disregard of real consequences. This little "deficit" we have, will come due.

Whoever this is doesn't know anything about macro. The title should have been: How MMT Can Help Us Vaguely State Our Feelings About The Economy

MMTers always say they're just describing how money works - but in no country does money work the way they say. The bank is not the government, the government is not the bank - a very light look at the history of banking in England will tell you why this is the case. If the government becomes it's own accountant - what is sure to follow is not sound policy.

MMT or bust..

Pls just Stop

There is no theory named MMT. It doesnt exist. One condition for an hypothesis to be able to become a theory is that first it needs to be tested many times and has to come out correct every single time (MMT never came true), and secondly, and most importantly, it has to be validated/supported by every other theory in existence. Even if one theory suggests something going against a hypothesis, then that hypothesis can not become a theory. And instead it becomes 'a nonsense'. It even loses the title of hypothesis. This is how the science works.

This MMT is trash and has been tried many times thoughout history and has a record of 100% failure.

Buy Bitcoin, buy gold, buy oil, bye banks.