Stephanie Kelton ekonomia on batez galdezka

Stephanie Kelton Wants You to Ask: ‘What Does a Good Economy Look Like?

Charlotte Cowles


It’s rare for a fiscal policy wonk to attain political celebrity status, but economist Stephanie Kelton, a professor at Stony Brook University in New York, is one of the hottest names in Washington right now. Though her ideas were considered radical just a few years ago (Paul Krugman flatly rejected the premise of her research in a 2011 New York Times column), several of the policies she helped popularize, such as nationwide student debt cancellation and a federal jobs guarantee, have become hallmarks of emerging progressive ideology, championed by politicians like Democratic House nominee Alexandria Ocasio-Cortez, Senator Kirsten Gillibrand, and Senator Bernie Sanders. (Kelton served as Sanders’ chief economic adviser during his 2016 presidential run.)

At 48, Kelton is a fast, earnest speaker eager to explain her ideas to anyone who asks. She packs conference halls (even a sports arena, in one case), appears regularly on MSNBC, cultivates a robust Twitter presence, and even lists her cellphone number on her website for journalists on a deadline—although lately, she’s been fielding just as many calls from political candidates seeking her counsel. “I’ve spent the whole summer on Skype with an awful lot of people running for office,” she says brightly. “They’re reaching out because they want to get the economics right, which is so heartening.”

Getting the economics right is, of course, how Kelton’s star rose in the first place. Kelton is one of the leading proponents of Modern Monetary Theory, or MMT, named for its focus on governments’ ability to manage the value of their currency. More specifically, she argues that countries like the U.S., which control their own currencies, don’t function like a traditional family or business budgets where income (taxes) should equal output (spending). Instead, the government has the power to print the money it needs for sweeping, economy-boosting projects, and resulting budget deficits would not be the bogeyman people believe them to be. And what about the threat of runaway inflation, the most common critique of increased government spending? According to Kelton, it would be avoided if the country had a more stable, sustainable economic system.

We spoke with Kelton about her latest work, her role in the upcoming election cycle, and her vision of a balanced economy.

A lot of policymakers and economists formerly considered your ideas to be very radical—what changed their minds?

A few things. One is that, at a certain point, being right matters. Another was getting our ideas out there. When we started using social media, people started to pay more attention to us. In 2009, during the Great Recession, I launched the New Economic Perspectives blog because we wanted a voice in the debates happening at the time. A lot of economists, politicians, journalists, and pundits were saying the U.S. was going to end up like Greece because the recession caused a sharp increase in budget deficits and that was going to drive up inflation. And we were saying, ‘That’s incorrect. Here’s how it really works.’ People started to take us and our work more seriously because we kept getting big things right that others were getting wrong. We also predicted the failure of austerity measures in Europe. Having a good track record with real-world events made people listen.

It’s not really your job to explain economic theory to the public. But how can other people—say, politicians—explain the concepts of MMT to voters who many not necessarily even want to listen?

You’re right, it’s not necessarily my job to persuade average people. But I feel like it’s my responsibility, because when policymakers make decisions that are grounded in a bad understanding of the way government budgets operate, it affects us all. For politicians, the challenge is really on them. Some of them ask me for specific advice on how to talk about debt and deficits, and my first answer is, ‘Don’t.’ The broad public reaction to those words tends to be negative, so my first rule of thumb is don’t bring it up. Do no harm. If somebody poses a question to you, and they inevitably will—‘Oh, what about the debt?’—then you’ve got to find ways to deal with it. I don’t think there’s a cookie-cutter response.

When you get that question, how do you respond?

I say, ‘Look, the purpose of the government’s budget ought to be to balance broad conditions in our economy.’ We are so obsessed with balancing the federal budget, but that’s not the right policy goal; the right policy goal is to achieve a good economy. So, what does a good economy look like? It’s not imbalanced like the economy we have today. It’s not an economy where the concentration of wealth is rivaling where we were in the 1920s, where the top tenth of the top 1 percent owns the same share of wealth as the bottom 90 percent combined. It’s not an economy where the median worker hasn’t seen a wage increase in real terms for more than a generation.

It all comes down to this: What kind of a world do we want to create for ourselves? We could eliminate poverty. We could manage our impact on the climate. And if we use the government’s budget to achieve those goals and there’s no inflation problem, who cares if the deficit is 4.5 or 2.1 percent of gross domestic product? That number is irrelevant.

A lot of people get nervous about the concept of government intervening with the economy. How do you package these ideas and make them palatable to people who fear “big government”?

MMT has always made a point of doing two things: First and foremost, we’re just describing the way things operate. ‘This is how the federal budget works. This is what deficits really do. This is what the national debt really is.’ It’s a descriptive exercise.

Politically, we also happen to be progressive. So, we take our understanding of how the monetary system operates and argue in favor of a progressive agenda. But you could just as easily take our understanding of how things work and argue in favor of small government. Our belief is that the federal government has more space to expand the size of its balance sheet, or to increase spending, or to cut taxes, whatever your politics prefer.

Another way to explain it is we’re currently living beneath our means. Right now, people believe that budget deficits reflect living beyond your means. But the evidence of that would be an inflation problem, which we don’t have. If you’ve got the space to either cut taxes or raise spending without causing inflation, and doing so would boost economic activity, why wouldn’t you do that? If you have people who want to work, and you don’t employ them, then you’re wasting their energy, talent, and willingness to participate. Whether you’re a Republican or a Democrat, you should be opposed to economic inefficiency and lost output.

Speaking of living beyond your means, how do you establish the limits to government spending if deficits aren’t an issue? And who makes sure those limits are observed?

Sometimes people will say, ‘Well, according to MMT, there are no limits.’ No. Just because you can produce more doesn’t mean you should. There are sustainability conditions, both environmental and economic, that provide limits. Every economy has its own maximum speed. The labor force is only so big. There are only so many people who can and will work. Your capital is only so much. As for enforcing those limits: That’s the job of the Congressional Budget Office. Their job is function as the scorekeeper, or the watchdog, and provide helpful feedback whenever Congress proposes a spending bill, at least in theory.

The idea of a federal jobs guarantee program has been picking up steam lately and legislation is in the works. Can you describe what that bill would look like?

I can’t tell you what the bill will look like, exactly. But I can tell you in general terms what a federal job guarantee should have. It needs to be universal and permanent. That means it’s not something we introduce in certain regions when the economy is weak, but then eliminate after the economy recovers. It means Americans always have a right to a job if they wish to have one, period.

The bill I am currently working on proposes that public service employment would offer benefits, including health care and retirement. It may also include child care. It would be federally funded, but ideally, those jobs would be bubbling up from the communities where the unemployment exists, so that local people can say, ‘Here’s what this community needs.’ Then those communities would work with their local and state governments to design the projects that those jobs would support, and the Department of Labor would provide oversight at the highest level.

The Republican Party is taking credit for current economic growth and lower unemployment rates and claiming that it’s a product of the new tax cuts and trade policies. How would you describe the current state of the economy?

We’re currently into something like the hundredth month of an economic recovery that began back in June of 2009. What’s marked this recovery is how uneven it has been, and not just since Donald Trump got elected. Those in tech industries, coastal regions, and areas that were already well off have recovered a lot. But there are still millions of people in communities across the country who feel like the recovery didn’t happen for them. I’m concerned about those people, who continue to live in a precarious financial state, paycheck to paycheck. I’m also concerned about financial deregulation. We’re chipping away at the safeguards that were put in place and unleashing big finance to begin engaging in the same risk-taking that drove the last crisis. That worries me a lot.

Does it ever feel difficult to balance the chaos of the political climate with your academic work?

I’m really not cognizant of the politics when I’m doing the academic work. We try to make it more of a neutral exercise, a series of “what-ifs.” You’re looking for the right answers, not the answers that will best position the party that you happen to hope will win.

Are there any candidates whom you’re particularly excited about right now?

I was on the phone with Alexandria Ocasio-Cortez back in February, way before anyone was paying much attention to her, and there was something about her that struck me. She had a real interest in the student debt report that we had written, and I found her curiosity inspiring. Not a lot of people are open to different ways of talking and thinking about economic questions, but she certainly was.

4 erantzun “Stephanie Kelton ekonomia on batez galdezka” bidalketan

  1. Warren B. Mosler‏ @wbmosler
    Good coverage with quotes from Professor Stephanie Kelton!
    2018 ira. 6

    Nancy Pelosi Promises That Democrats Will Handcuff the Democratic Agenda If They Retake the House
    David Dayen


    In the first outline of the legislative agenda House Democrats would pursue if they take the majority in November, Minority Leader Nancy Pelosi has made the public a big promise, vowing to handcuff her party’s progressive ambitions, including in the event that a Democratic president succeeds Donald Trump, by resurrecting the “pay-go” rule that mandates all new spending is offset with budget cuts or tax increases.
    Pelosi’s planned legislative package for the beginning of a potential House takeover would include establishing ethics and lobbying reforms, lowering the costs of health insurance premiums and prescription drugs, and spending $1 trillion for infrastructure investment. The latter two would cost money, and under pay-go it would all have to be offset. (Amerikar trilioi bat = Europar bilioi bat.)
    A new vanguard of economists in Washington, including former Bernie Sanders staffer Stephanie Kelton, has argued that under modern monetary theory, public spending is only constrained when the economy is running at full capacity and inflation starts to rise — which is not remotely the case today. Public deficits, she points out, are just another way of talking about private surpluses. She has warned of the dangers of balanced budgets that take money from the hands of ordinary people, and has made some headway inside Washington. Kelton has been involved in strategy sessions with Senate Democratic Leader Chuck Schumer, D-N.Y., and remains close to Sanders, who would chair the Budget Committee if Democrats take the Senate. But Pelosi has been unmoved.
    In a statement, Kelton said that “pay-go is a self-imposed, economically illiterate approach to budgeting.” Republicans, she said, know this, which is why “they have unabashedly used their power to expand deficits and, hence, deliver windfall gains for big corporations and the already well-to-do.”
    She continued, “Instead of vowing budget chastity, Democrats should be articulating an agenda that excites voters so that they can unleash the full power of the public purse on their behalf.”

  2. LEFT OUT: Stephanie Kelton on MMT and debunking budget deficit myths
    Stephanie Kelton is a leading American economist and a Professor of Public Policy and Economics at Stony Brook University. Kelton was Chief Economist on the U.S. Senate Budget Committee and Economic Advisor to the Bernie 2016 presidential campaign. She’s most known for being a pioneer of Modern Monetary Theory (MMT). 
    In this episode, Professor Kelton debunks budget deficit and government spending myths and explains how understanding how our monetary system works is crucial to making the political and economic case for important programs like universal health care, free public higher education, infrastructure investment, and more.
    We also explore some current economic issues, including how we might be able to cancel all public and private student debt in the U.S., and lastly the role and challenges of women in economics.

  3. S. Kelton eta defizita

    Ben Walsh-en Stephanie Kelton Wants You to Rethink the Deficit

    Stephanie Kelton, an economics professor at Stony Brook University on Long Island in New York, has a radical new way for thinking about the economy: Governments that print and borrow their own currency can’t go bankrupt, she says, and the current U.S. budget deficit is, if anything, too small.
    That kind of thinking is part of a school of economic thought known as modern monetary theory, or MMT, which Kelton has helped develop. But she also wants to tell me a story from 2012, years before she became better known as an advisor to Sen. Bernie Sanders’ (D., Vt.) presidential campaign.
    At that time, Kelton was invited to an all-male breakfast club of the Kansas City rich and powerful. Despite her left-leaning views—and being the only woman—she won the room over.
    How she did it is a testimony to her rhetorical and intellectual skills and to just how much her thinking confounds a political graph that is defined solely by tax and spending axes.
    Kelton, 48, explained to the room in Kansas City that the government budget is not like a household budget because the government prints its own money. But the problem is that Washington always wants to know how to pay for new programs.
    That’s a problem for you, she says she told her listeners, because the conventional wisdom in the capital is that money “grows on rich people” and you pay for nice things by taking it from them.
    “Don’t look at me,” she instructed her audience to tell lawmakers. “That’s where the money comes from. And you point at the Treasury. You point at Congress.” And she won the room over.
    Insisting that government spending comes from taxes, she says, puts the rich at the center of American policy-making in an unhealthy way. And the very rich, Kelton’s experience shows, are pleased to hear that you don’t have to tax to spend.
    Here’s what else she had to say.
    Barron’s: Let’s start from the top. The way the federal government works is it takes in money from taxes, and then it spends it. Right?
    Stephanie Kelton: Well, that’s the usual belief. How it really works is that there’s a constant overlap of things happening. That when Congress sits down, in an ideal scenario, the House and the Senate would come up with budgets. And in all likelihood, they won’t match exactly. And so there will be reconciliation. The budget will either pass or not. It gets signed by the president or not. Congress is writing down numbers and saying, “This is our intention, to spend in these amounts.” And the budget authorization is given that allows the heads of these agencies to go out and start hiring, engaging in contracts. It’s the authorization from Congress that provides the funding. That triggers the spending.
    The conventional wisdom about deficits is that we should always be worried about them. When do you worry about deficits?
    I worry not just about the magnitude, but about the purpose. We could add $1.5 trillion1 to the deficit over 10 years, as we just did with tax cuts that go disproportionately to people in the top-income distribution, and we could have done, for instance, student debt cancellation at virtually the same price tag. We could have done massive infrastructure investment, or R&D investment.
    You can have the same budgetary outcome, but very different economic outcomes, in terms of the potential to boost long-term growth and productivity, impacts on the distribution of income, and so forth. Every economy has its own internal speed limit. You can only absorb so much additional spending at any point in time, given the slack that the economy has at that moment. So can the deficit be too big? Of course! But can it be too small? Yes. And that’s something you rarely hear people say. Or complain about it.
    It seems like people forget that balance sheets have two sides.
    Government debt is just the money the government spent into the economy and didn’t tax back. That’s all the national debt is. It’s a historical record of all of the times that they made a net deposit, spent more than they taxed out, and the bonds are the difference between those. One of the greatest cons ever perpetrated on the American people is this notion that the national debt belongs to us, that we are responsible in our individual capacity for a share of it.
    The national debt clock that counts up exactly how much is owed by every man, woman and child in America!
    When I worked on the Hill, one of my favorite exercises was to find elected officials, staffers, and ask them if you had a magic wand, and you could wave it, and eliminate the national debt tomorrow, would you do it? Of course. Who wouldn’t do that? Yes, I mean, the quickest “yes” you ever got in your life.
    OK, what if I gave you a different wand, and I told you, you can wave the magic wand, and you can eradicate the world of U.S. Treasuries. There won’t be Treasury notes anymore. They’ll just all be gone. How many members of Congress, would do that?
    They looked at me with a total blank stare.
    Why do you think that people generally, and politicians in particular, are stuck on this notion of the government spending being like a household or an individual?
    In some ways, it’s rhetorically convenient. No politician wants to stand, I think, in a town hall meeting and try to explain the intricacies of government finance to constituents. So it’s a convenient narrative to just reinforce the conventional wisdom, the norms of understanding. And I think it also provides political cover.
    You advised Sen. Bernie Sanders, and you’re a major proponent of a jobs guarantee, support Medicare for all, free college tuition, and on—all things the left wants. Do you think that modern monetary theory has an inherent set of politics?
    No. When we started undertaking the research for this body of scholarship that’s now dubbed MMT, it was an exercise in trying to understand the monetary system, the way things work. We just wanted to get a better understanding of how the economy works, how fiscal and monetary operations work. At least 90% of MMT is descriptive in nature. But if you believe that the economy chronically operates under its full potential, then it makes sense to look for policy recommendations to make things more efficient, to maximize potential output. And MMT’s not the only school of thought that does that. You see that with classical supply-siders as well. They think the way to squeeze out the last bit of potential is largely through tax cuts and deregulation.
    What about Greece, Portugal, Spain, Italy, Argentina, and their debt crises? They exist. Why don’t those things worry you?
    Well, the debt crises in those countries are worrying to me. But it’s not a lesson for America. You know, back in 2010, at the height of the European debt crisis, I can remember standing in my kitchen with the TV on, and turning on the news, cooking dinner, and seeing the opening to the nightly news. And it goes, dah, dah, dah, the debt crisis in America. And I go, what debt crisis in America? But that is really what the narrative started to become: This is a warning for America. We need to get our fiscal house in order.
    What’s different? Look, Italy in 1995 had a debt-to-GDP ratio of around 120%. Spain in 1995 had a debt ratio of 62%. Greek debt-to-GDP over 100% before joining the euro. These countries were borrowing and spending in a currency that they created. Who remembers the debt crisis in Europe in ’95? There was no debt crisis in ’95, because Italy could always meet every obligation that came due, on time, in full, because it was paying in lira. Where and how else is the lira going to come from but the Italian government?
    Do you think openness to MMT and view of deficits and government debt is generational? Do old people just not get it?
    I think so. For a certain demographic, the ’70s are still kind of a fresh memory, and you know, waiting in long lines to put gas in the car, high inflation. And so that’s a live memory for some demographic. But young people—I mean, Obama’s slogan was “Yes we can.” And then all hell breaks loose, and he’s on TV right after the inauguration saying, we ran out of money, so no, we can’t. And then you get Hillary Clinton’s message, which was pretty much, “Yes, we can a little bit.” And millennials see their future, they see climate change, and they take it seriously. They see the cost of college education. They see problems with health care. They can’t get out of the home and start a life. They’re open to a big, ambitious agenda. The threats are real for them.

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