Stephanie Kelton: “The National Debt Is Exactly The Opposite Of What The Orthodox Story Tells Us”

Last month I gave a talk about the economics of the Music Business at Stephanie Kelton’s interdisciplinary course at Stony Brook that includes students from the History, Economics, Political Science and Sociology departments. Kelton, America’s best known proponent of Modern Monetary Theory and who I first met when she was Chief Economist for the Senate Budget Committee Democrats, was born the same year I graduated from Stony Brook. I had majored first in history, then in political science and finally in sociology. The head of the Economics Department, Robert Lekachman, was a friend from the summer before my freshmen year when we were both working on the NYC mayoral campaign of Bill Ryan, the first member of the House to have come out against the War in Vietnam. I never imagined I would be back at Stony Brook lecturing students from those— and any— departments.

On Wednesday Kelton was in Los Angeles for the screening of the film she stars in, Finding The Money, and I went with her to see it. It was absolutely fantastic, beyond my expectations, even for someone like me who isn’t an economics buff. Here, watch the minute and a half trailer:

Early in the film, she says she needs between 90 minutes and two hours to educate an audience about what MMT is. That’s how long the movie is and gives the film-maker, Maren Poitras, and the band of economists involved— besides Kelton, Randall Wray, Lua Yuille, Fadhel Kaboub, Matthew Forstater and Pavlina Tcherneva— enough time to explain the origin of money and the relationship between public spending and private sector wealth. They emphasize that a sovereign government that issues its own currency isn’t like a household and need not be constrained by revenues or borrowing and can spend to achieve full employment and other economic goals— like Medicare-for-All or the Green New Deal— because it can issue more currency. Revenues— think taxes— don’t exist to fund government spending as much as they exist to control inflation and keep inequality in check. They explain why deficits aren’t inherently bad— their use of appearances by Paul “Mr. Austerity” Ryan, Jared Bernstein and former Comptroller General David Walker was as laugh-out-loud hilarious as it was enlightening— and actually beneficial because they fund socially essential investments (education, healthcare, infrastructure, etc, all of which are crucial in promoting economic growth). The whole concept of a “national debt,” is a conservative construct to… well, to promote conservatism.