Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, Uh, you
Speaker 1: know what I was just thinking about. You don't troll
Speaker 1: me about mm T anymore these days? Remember that when
Speaker 1: used to do that. Yes, all roads led back to
Speaker 1: MMT for well, I mean to some extent, they still do.
Speaker 1: For the past year or so, we've been talking a
Speaker 1: lot about the shift from monetary policy to your school stimulus,
Speaker 1: and that's a big component of mm T. Yeah, you
Speaker 1: used to every episode You're like, Joe, why I didn't
Speaker 1: Are you gonna bring up I m MT? But I
Speaker 1: guess we haven't really done that explicitly in a long time. Um,
Speaker 1: And so you stopped. You stopped joking about that with me.
Speaker 1: But today we aren't going to have to joke because
Speaker 1: that's actually literally what we're going to be talking about.
Speaker 1: It is an MMT episode. Yeah, And you know, I think, Um,
Speaker 1: one of the things that's really striking to me, and
Speaker 1: I'll just say this is that on some extent, to
Speaker 1: some extent, I really think that MMT has completely won
Speaker 1: the debate. And by that, I mean we have this
Speaker 1: big fiscal expansion happening in the US, and deficits by
Speaker 1: historical measures are very high, and there are certainly people
Speaker 1: who are like upset about it or angry about it.
Speaker 1: But it really feels like the entire debate is like
Speaker 1: essentially happening on MMT terms or MMT language. So you're right,
Speaker 1: we definitely don't hear UM many mentions of bond vigilantes anymore.
Speaker 1: We don't hear people talking about, you know, how are
Speaker 1: we going to fund social programs? The deficit is so large,
Speaker 1: that sort of thing like that seems a little bit
Speaker 1: old fashioned now in many respects, I do wonder, I
Speaker 1: do wonder how much MMT can take credit for that
Speaker 1: versus the fact that we've just had such an unusual
Speaker 1: economic crisis, you know, this big exogenous shock basically, so
Speaker 1: people are able to use that as an excuse to
Speaker 1: overwrite those concerns UM. And this is something we spoke
Speaker 1: about on a recent episode of the podcast. But like,
Speaker 1: it seems like this crisis was so unusual it really
Speaker 1: opened the door to people UM thinking about stuff differently.
Speaker 1: But but you're absolutely right, m MT. It's definitely not
Speaker 1: a fringe movement anymore now, And I think you're you're right.
Speaker 1: There's a lot of things that have happened, both in
Speaker 1: this crisis and over the last decade. The persistent lack
Speaker 1: of inflation despite you know, FEDS balance sheet expansion, despite
Speaker 1: deficits that obviously perhaps changed people's thinking, the nature of
Speaker 1: this crisis, and the sort of unanimous nothing's unanimous, but
Speaker 1: widespread belief that the government had a role in underwriting
Speaker 1: the recovery due to it's on usual nous. But it
Speaker 1: really is striking, like you know, coming out of a
Speaker 1: great financial crisis Greece and bond vigilantes, and there's still
Speaker 1: you know, there are critics of the existing stimulus for sure,
Speaker 1: and they didn't get a single Republican vote, but it's
Speaker 1: all on different terms. Now it's about inflationary pressures, which
Speaker 1: was always sort of the MMT view of like, well
Speaker 1: those the limits to spending, not the sort of credit
Speaker 1: worthiness of the government. And so even though there's a
Speaker 1: long you know, there's still huge policy fights and debates happening. Um,
Speaker 1: they really have changed a lot, and I think it's
Speaker 1: a pretty legit question the degree to which m m
Speaker 1: T thinkers have made that happen. But I do think
Speaker 1: it's part of what's really changed the whole discussion. Yeah,
Speaker 1: now you mentioned policy there, and I'm really, I really
Speaker 1: want to get into that particular topic when it comes
Speaker 1: to MMT, because I think one of the big criticisms
Speaker 1: of it as a school of thought is that it
Speaker 1: even if you agree that MMT is the best um
Speaker 1: way to describe the economic system, it might not actually
Speaker 1: lead to specific policy prescriptions, or it might not lead
Speaker 1: to policy prescriptions that are all that different. So politicians
Speaker 1: can agree that spending is bound by inflation, but maybe
Speaker 1: they all have different ideas still about how best to
Speaker 1: spend money. So I would love to dive into that
Speaker 1: a little bit more. Great, Well, we are going to
Speaker 1: be speaking with the pre eminent person who, without question,
Speaker 1: has done more to advance the mm team message over
Speaker 1: the last decade than literally anyone else. We spoke to
Speaker 1: her a couple of years ago, a year and a
Speaker 1: half ago at our Odd Lots Live event New York City,
Speaker 1: so excited to have her back on. We're gonna be talking,
Speaker 1: of course, with Stephanie Kelton, professor of economics and public
Speaker 1: Policy at Stony Brook and the author of the New
Speaker 1: York Times best selling book the deficit myth which just
Speaker 1: came out in paper at UM last week. And so
Speaker 1: very excited Stephanie, thank you so much for joining us. Oh,
Speaker 1: it's really nice to be back with both of you.
Speaker 1: Thank you. Do you think that's right? I mean, I
Speaker 1: said I think that on some level MMT has won
Speaker 1: the debate at least in terms of how the debate
Speaker 1: is defined. Does it feel that way to you? Yeah?
Speaker 1: And you know, I'll tell you something that I don't
Speaker 1: really I don't think I've ever probably said publicly, but um,
Speaker 1: I started to feel like MMT was beginning to win
Speaker 1: the debate before COVID. And you know, one of the
Speaker 1: things that I did early last year was to go
Speaker 1: UM to Washington, d C. At the invitation of House
Speaker 1: Leadership and to sit down. Scott Fellwiler was with me,
Speaker 1: and I won't say exactly who was in the room
Speaker 1: because I think we were probably not supposed to do that.
Speaker 1: But the point is we were there UM at their
Speaker 1: invitation to talk MMT. And the reason that they wanted
Speaker 1: us is because, uh, they were thinking ahead, and they
Speaker 1: were thinking about what a Biden presidency with potentially Democrats
Speaker 1: and control of the House and Senate would mean for
Speaker 1: h legislatively right, what what could they do? How ambitious
Speaker 1: and bold could they be? And how should they begin
Speaker 1: to think now about you know, rethink, I should say,
Speaker 1: the federal budgeting process, how they approached the question of
Speaker 1: you know, paying for their priorities and so forth. So
Speaker 1: that was pretty encouraging to me. And it was meant
Speaker 1: to be start of a conversation. And I was told,
Speaker 1: you know, we want to have you back in front
Speaker 1: of a bigger audience and uh. And then of course
Speaker 1: coronavirus happened. But I thought that was a pretty good
Speaker 1: indication of the you know impact that we were having. Um,
Speaker 1: you know, where it matters most. And in Congress, I
Speaker 1: wanna delve into the policy prescriptions like I mentioned, But
Speaker 1: before we do, could you could you maybe contrast, you know,
Speaker 1: where we are now to where we were when you
Speaker 1: first started thinking seriously and writing seriously about MMT, Like
Speaker 1: how different is the environment back then versus you speaking
Speaker 1: to prominent politicians about how MMT could actually be enacted
Speaker 1: in serious ways. Oh, Tracy, I mean I was just
Speaker 1: a kid in some respects when I first got I
Speaker 1: was in graduate school. I started, you know, in the
Speaker 1: mid nineties nineties. I graduated, I finished up my undergraduate degree,
Speaker 1: and I was supposed to go off to Cambridge University
Speaker 1: and start a graduate program. And I had this sort
Speaker 1: of gap where I graduated in December and Cambridge wasn't
Speaker 1: going to start until October, I think of the next year,
Speaker 1: and I had this this void in this time, and
Speaker 1: my parents said, get a job. And one of my professors,
Speaker 1: my undergrad professor, said no, no, no, go to Denver
Speaker 1: and work with Randy Ray and spend some time there
Speaker 1: before you go off to Cambridge. And I thought, well,
Speaker 1: that's brilliant idea. You know, I get sort of a
Speaker 1: dress rehearsal uh for graduate school. And I went and
Speaker 1: I worked with Randy Ray, who's you know, was there
Speaker 1: on the ground floor. He was just beginning to write
Speaker 1: UM a book called Understanding Modern Money. That was I
Speaker 1: think his first real entry into MMT, and that began
Speaker 1: to lay it out the scholarship, and so I got
Speaker 1: a little bit of it there with him. But then
Speaker 1: I finished up a year at Cambridge and I ended
Speaker 1: up at the Levy Economics Institute, and Randy was there.
Speaker 1: And I'm sure we'll talk later about when Godly and
Speaker 1: people like that, and when was there and now MMT
Speaker 1: was really getting going, but I was still a graduate student,
Speaker 1: so I was writing papers and I ended up finishing
Speaker 1: my program at the News School. So you know the
Speaker 1: way that we were part of a team of academics, um,
Speaker 1: but we were mostly you know, presenting our work at
Speaker 1: academic conferences and doing the usual thing writing peer review
Speaker 1: journal articles take a year two sometimes more to get
Speaker 1: in print. And then two thousand eight crisis came and
Speaker 1: that really changed everything. That's where you know, I got
Speaker 1: this idea that I would start a blog and we
Speaker 1: would try to use social media to become part of
Speaker 1: a larger conversation, uh and get our ideas in different
Speaker 1: ways of thinking about things out there. So that was
Speaker 1: an exciting time because for the first time we were
Speaker 1: having dialogue with people, you know, outside academia narrowly, and
Speaker 1: the media started to pay some attention and things just
Speaker 1: evolved from there. Can you talk about that a little
Speaker 1: bit further. I mean, there are a lot of academics
Speaker 1: in all kinds of fields, I'm sure, economic, sociology, everything,
Speaker 1: who sort of toil away. I don't want say toil
Speaker 1: but write an obscure journals that get read by fifty
Speaker 1: people speak to classes, but don't really have any sort
Speaker 1: of like meaning. It doesn't really jump the chasm into
Speaker 1: the mainstream discussion. Can you talk a little bit more
Speaker 1: about when you started noticing that happening with your work
Speaker 1: and MMT and just like the role of UH new
Speaker 1: media social media, twitter, blogs, etcetera in turning what what
Speaker 1: you know going from those journals into the discussion where
Speaker 1: policy changes. Sure, I mean, you know, we started committing
Speaker 1: ourselves in writing on that blog that i UM launched
Speaker 1: called New Economic Perspectives, And you know, you're launching a
Speaker 1: brand new blog and nobody knows it exists, and it's
Speaker 1: very hard to start to get people reading it. And
Speaker 1: you're out there dropping links to everything you've written in
Speaker 1: other on other people's blogs the comments section. They don't
Speaker 1: always like that, but it was a way to try
Speaker 1: to build a readership. And then there were some people
Speaker 1: who started to pay attention in the very beginning, some
Speaker 1: guy UH named Joe Wisenthal I think at Business Insider,
Speaker 1: who's he's one of the first. I mean, honestly, he
Speaker 1: really was one of the first, I think financial journalists
Speaker 1: who started to take a look at what the kinds
Speaker 1: of things that we were saying and what we were writing,
Speaker 1: and um, and took them seriously enough to wonder, sometimes
Speaker 1: wonder aloud, and to repost things or whatever and and say,
Speaker 1: you know, the sort of curious what these people are
Speaker 1: saying and it's such a departure from what we normally here.
Speaker 1: And then you know, a handful of others started to
Speaker 1: do it. I think even John Carney, who maybe was
Speaker 1: writing for CNBC at the time, he started to look
Speaker 1: more closely and and uh, Pedro DaCosta, who maybe was
Speaker 1: at Reuter's or I don't know where he was. But
Speaker 1: there were a handful of you guys who were you
Speaker 1: know too, who were kind to us I think that's
Speaker 1: the right word in the early years, and weren't dismissive,
Speaker 1: didn't didn't just you know, go full on embrace of
Speaker 1: the ideas, but gave it a shot and gave it
Speaker 1: a mention, and it really did do a lot for
Speaker 1: us to to help us elevate, you know, the work
Speaker 1: that we were doing, and to give us a shot
Speaker 1: to prove ourselves credible and worth maybe you know, paying
Speaker 1: a bit of attention to why do you think mmt
Speaker 1: resonated with I guess journalists and also a broader audience
Speaker 1: like what was the attraction or what was the thing
Speaker 1: that opened the door to people like I guess having
Speaker 1: an open mind towards a fairly radical like rethinking of
Speaker 1: traditional economics. Yeah, I mean I think maybe you know,
Speaker 1: I'm not a journalist, but if I were, I think
Speaker 1: I would be looking for things that are new and
Speaker 1: different that spark a bit of controversy. Um, you know
Speaker 1: that that would be more fun to write about. I
Speaker 1: think those sorts of things and uh, pull new ideas
Speaker 1: in and and punch them around and see what happens.
Speaker 1: So I think to some extent, maybe we were red
Speaker 1: meat for some and we were an interesting new way
Speaker 1: of thinking for others. But uh yeah, I think people
Speaker 1: probably you know, used us in different ways over time. Um.
Speaker 1: But but a good story. You know, there's this sort
Speaker 1: of group of economists who don't come from the Ivy
Speaker 1: League universities, nobody's ever heard of or and they're out
Speaker 1: here saying some some really unusual things. And so it
Speaker 1: became a story of sorts. If I could just talk
Speaker 1: first person for one second. One of the attractions for me,
Speaker 1: for your work and others. Very early on two thousand
Speaker 1: and ten or so, was that there just seemed to
Speaker 1: be a lot of things happening in the economy the
Speaker 1: um the mainstream writers and thinkers didn't seem to have
Speaker 1: very compelling answers for And the biggest one to me
Speaker 1: was why is it that government debt is exploding and
Speaker 1: we don't seem to have higher interest rates or hyper
Speaker 1: inflation or uh, you know, dramatically weakening currency. And so
Speaker 1: it's like these were just this was like a puzzle
Speaker 1: out there to me, and you know, I was like
Speaker 1: looking for answers, and I it's not that I was
Speaker 1: like entirely convinced right away, oh that you guys have
Speaker 1: the answer, but at least like you're supplying I thought,
Speaker 1: like something, but I'm curious, like you know how much.
Speaker 1: One of the things that we talked about on a
Speaker 1: recent episode was this idea that the between the Great
Speaker 1: Financial Crisis and the coronavirus crisis, there seemed to be
Speaker 1: a lot of things that actually happened in the real
Speaker 1: world that we're not helpful to mainstream macro. So we
Speaker 1: didn't have hyper we didn't have inflation, let alone hyper inflation,
Speaker 1: and the unemployment rate went down a lot further than
Speaker 1: people would have, um expected. All kinds of sort of
Speaker 1: mainstream views didn't seem to work out. Que didn't really
Speaker 1: have much of an effect. Talked to us about that
Speaker 1: as well. That's sort of like that period in which
Speaker 1: it felt like mainstream views became a little bit discredited
Speaker 1: by facts on the ground. That's exactly right. Everything that
Speaker 1: the mainstream had been warning about for decades really kept
Speaker 1: not happening. Uh. And as the evidence mounted, and you know,
Speaker 1: I think this is one of the things that really
Speaker 1: did earn us some some cred, some street cred, was
Speaker 1: that we were writing in real time, Uh as the
Speaker 1: you know, European debt crisis was unfolding. Um, we we
Speaker 1: were taking positions and had taken positions early on that. Um.
Speaker 1: You know, there was this design flaw in the Mastic Treaty,
Speaker 1: and that a debt that a debt crisis was entirely
Speaker 1: possible due to the fact that these countries, in giving
Speaker 1: up their sovereign currencies and adopting this common currency which
Speaker 1: they could no longer issue, would mean eventually the financial
Speaker 1: markets would figure out that they were lending two currency users,
Speaker 1: and they would begin to price that default risk in
Speaker 1: and yields could blow out. And I mean, we had
Speaker 1: written it all up years before the thing happened, and
Speaker 1: when others became surprised and then later confused, because if
Speaker 1: it can happen to Greece, then it can happen here.
Speaker 1: Only our deficits got very large, you know, ten percent
Speaker 1: of GDP uh and interest rates went down, not up,
Speaker 1: and then we had the downgrade, you know, US government
Speaker 1: bonds were downgraded, and people said, oh, this is the end.
Speaker 1: You know, yields are going to spy it, and we
Speaker 1: said no, no, no, And of course the rates went
Speaker 1: down the next day. And then you can always look
Speaker 1: to Japan and the warnings for years with respect to
Speaker 1: their debt and persistent deficits and currency holds up and
Speaker 1: they can't get inflation anywhere close to the two percent targets.
Speaker 1: Some would say in spite of QUI I would say
Speaker 1: maybe even partly because of I mean, there's just the
Speaker 1: models and the things that we thought we understood about
Speaker 1: relationships between deficits and interest rates and and dead and
Speaker 1: um and printing money so called, and inflation, and so
Speaker 1: we're just kept not bearing any fruit. And at some point,
Speaker 1: you know, we were writing all along about why we
Speaker 1: understood things to work differently and why what was happening
Speaker 1: was consistent with our models UM and so I think
Speaker 1: you know, as I said, I think it earned us
Speaker 1: some credibility. So I want to pivot slightly to UM
Speaker 1: specific policy prescription from mm T. And as I mentioned
Speaker 1: in the intro, I think this has been one of
Speaker 1: the criticisms. But what does an MMT policy actually look like?
Speaker 1: Is it focused on reaching full employment or can it
Speaker 1: be related to you know, any sort of government spending. Well,
Speaker 1: I think you know, we generally accept the idea that
Speaker 1: you know, the dual mandate makes sense. The goals of
Speaker 1: the dual mandate. You want an economy high levels of
Speaker 1: employment and low levels of inflation, you know, broadly balanced
Speaker 1: macro economic conditions in the economy. For from the very
Speaker 1: beginning though, we just thought that the central Bank was
Speaker 1: not the proper institution, at least not to bear primary
Speaker 1: responsibility for delivering on those objectives. That uh, in fact,
Speaker 1: fiscal policy was a more durable, reliable, appropriate tool, if
Speaker 1: not you know, as a replacement, at least is a
Speaker 1: very strong front facing part of the way that you
Speaker 1: get that outcome, that you achieve a balanced economy. So
Speaker 1: MMT does not come with a prepackaged set of policy proposals.
Speaker 1: You hand someone this set of ideas and say, here,
Speaker 1: go do this. This is mm T m T S.
Speaker 1: You know, I sometimes say it's not a verb, it's
Speaker 1: an adjective. It's mostly a description of the nature the
Speaker 1: monetary system and the mechanics of government finance. Uh. And
Speaker 1: you can apply that lens. You can use that m
Speaker 1: m T understanding to look at any country in the world,
Speaker 1: understand their monetary system, and explain the mechanics of how
Speaker 1: government finance will work in that country, what the constraints
Speaker 1: would be given different types of monetary systems and other things, um.
Speaker 1: And then you can craft policy based on the spending
Speaker 1: capacity of that country. But you the policy prescriptions themselves
Speaker 1: don't fall out of an m m T box. They
Speaker 1: come out of the political process. So if we accept
Speaker 1: that MMT is more of an adjective or a description
Speaker 1: of the existing system or like sort of more of
Speaker 1: a state of mind than a set of policy uh prescriptions,
Speaker 1: Like I'm curious, how much does that change things in
Speaker 1: your opinions? So if tomorrow every single person in the
Speaker 1: world woke up and accepted MMT has like, you know,
Speaker 1: the way the economy actually works, what do you think
Speaker 1: would change, Like how different with the world look? Well,
Speaker 1: I you know, I've often said that I think the
Speaker 1: big breakthrough will be that we start having more fruitful debates,
Speaker 1: that we stop debating and wringing our hands over things
Speaker 1: that aren't of concern, that aren't legitimate. You know, I
Speaker 1: will often say that MMT is about replacing an artificial, fake, phony,
Speaker 1: imaginary budget constraint with a real resource constraint, with an
Speaker 1: inflation constraint. So when I say the debate would change,
Speaker 1: I mean that we would not be bogged down and
Speaker 1: debating all the kinds of things. Joe opened the program
Speaker 1: talking about, you know, we're gonna run out of money.
Speaker 1: We're going to burden the next generation. The bond vigilantes
Speaker 1: will come after us. We will China will turn off
Speaker 1: this picket and no more dollars will come out. All
Speaker 1: of those things that hamstrung us, you know for so
Speaker 1: many years. When we think about what's possible, we could
Speaker 1: set those things aside and then start having a very
Speaker 1: different kind of debate if we could all come to
Speaker 1: some kind of agreement about, you know, the low hanging fruit,
Speaker 1: how much fiscal space do we think is available, then
Speaker 1: we would just be debating how do we want to
Speaker 1: use that fiscal space. And that's where the politics are unavoidable.
Speaker 1: Republicans will want to use up physical space doing tax
Speaker 1: cuts and you know other things, and Democrats will want
Speaker 1: to use physical space doing healthcare, education, or infrastructure, climate. UM.
Speaker 1: So you still end up with a healthy debate, I
Speaker 1: think a healthier debate because you're no longer um worrying
Speaker 1: about things that won't happen, and you start focusing on
Speaker 1: on the real areas of concern. So the next criticism
Speaker 1: that comes, or the sort of logical sequence of this
Speaker 1: I see it in discussions all the time, is that, Okay,
Speaker 1: you're right, the real constraint is inflation, real resource constraints.
Speaker 1: But you have no way of measuring actual physical capacity.
Speaker 1: You have no way of really defining where we knowing
Speaker 1: where we are in terms of real resources. When you're
Speaker 1: talking to either in academic circles or you're talking to
Speaker 1: policymakers that have to make these things, how do you
Speaker 1: think about gauging resource capacity? And avoid unwanted inflation. Well,
Speaker 1: you know you do it. I think you take a
Speaker 1: specific policy proposal. If you want to ramp up, you know,
Speaker 1: a major infrastructure spending program. Then you know, in the
Speaker 1: old days, somebody might do some sort of input output analysis.
Speaker 1: You you say, I want to do three trillion dollars
Speaker 1: of infrastructure. Okay, what is your infrastructure program include? While
Speaker 1: it includes some broadband and high speed rail, I want
Speaker 1: to build more community health centers. I want you know,
Speaker 1: you lay it out. This is what I want my
Speaker 1: infrastructure to do, solar panels and all this kind of stuff.
Speaker 1: So what are the real resources that you would need
Speaker 1: to carry out that program? And oh, by the way,
Speaker 1: how quickly do you want to spend three trillion dollars?
Speaker 1: Is it a five year program? Is a two year program?
Speaker 1: So you need a lot of information. And then you say,
Speaker 1: all right, so I know what I want to do.
Speaker 1: I know what I want to construct, build, you know whatever,
Speaker 1: And now what do I need to do it? How
Speaker 1: much steal, how much concrete, how many machines, how many
Speaker 1: workers I need? Construction workers, architects, engineers. You can actually
Speaker 1: get a sense of how readily available these things are
Speaker 1: because you know, we have measures like you know, unemployment
Speaker 1: by occupation, how many out of work construction workers are there?
Speaker 1: In engineers and architects, how much slack is there in
Speaker 1: manufacturing capacity. We know this stuff by you know, production
Speaker 1: and moving equipment and so forth. So it's an imperfect world.
Speaker 1: You're not going to know precisely what the actual number
Speaker 1: of people available to you are. You can get a
Speaker 1: pretty good sense of whether it is realistic to think
Speaker 1: of three trillion dollar infrastructure plan rolled out over two
Speaker 1: or three years, given the capacity that you have. You
Speaker 1: call Caterpillar and you say, if I were to place
Speaker 1: an order with you folks for you know, X dollars
Speaker 1: and this much equipment of this type, becauld you fill
Speaker 1: that order? They'll tell you. I have a slightly weird question,
Speaker 1: but I'm just curious, like in Washington, are there specific
Speaker 1: people or like, which politicians would you say have grasped
Speaker 1: the basics of MMT or are embracing mmt UM the
Speaker 1: most Well, you're not asking me the name name, Sorry, Tracy, Well,
Speaker 1: I I kind of I was hoping, but like, okay,
Speaker 1: let me rephrase it, Like, is there a body of
Speaker 1: politicians that are embracing it more than others. And like,
Speaker 1: I guess the obvious answer to that is the Democrats.
Speaker 1: But we're just getting to that policy debate. Like Republicans
Speaker 1: could easily embrace MMT as a reason to do tax cuts,
Speaker 1: as you mentioned, just as easily as Democrats could embrace
Speaker 1: MMT as a way to do you know, some sort
Speaker 1: of social spending or something like that. So I'm curious,
Speaker 1: is there is there an underlying like feature of politicians
Speaker 1: who are interested in MMT. Uh. Probably, but look, let's
Speaker 1: let's be very clear. Tax cutting taxes is in the GOP,
Speaker 1: d n A. They do not need MMT uh justify
Speaker 1: tax cuts. They have always done that. They've been doing
Speaker 1: it for decades, long before MMT existed. And uh, I
Speaker 1: mean the existence of m MT doesn't I don't think
Speaker 1: boost their enthusiasm for tax cuts in any way. They're
Speaker 1: going to do it no matter what if they get
Speaker 1: a chance. Um. Yeah, you know. I after the November election,
Speaker 1: when uh President Biden, when Biden became the nominee m
Speaker 1: the Congressional Progressive Caucus reached out and it is chaired
Speaker 1: by Congresswoman Promilagia Paul. She asked if I would address
Speaker 1: the caucus. Now there are I think a little over
Speaker 1: a hundred members of the CPC, and every Tuesday they
Speaker 1: do a call, and I was the first Tuesday call
Speaker 1: after the elections. So h that's just one example. I
Speaker 1: think there are some people. You know, I won't out people,
Speaker 1: but if somebody like Senator Brian schatt out people as
Speaker 1: mm tears, I won't. I won't talk about private conversations
Speaker 1: that I have. But you know, Brian Schatz, Senator shots
Speaker 1: from Hawaii, was out there tweeting about how much he
Speaker 1: was had enjoyed the book and how I think he's
Speaker 1: done interviews. In fact, I know he has. I read
Speaker 1: some of them where he talked about being on a
Speaker 1: Senate it's either banking or Finance committee, and he said,
Speaker 1: we're talking about it, you know, I'm talking about MMT
Speaker 1: We're thinking about this. I think there was a article
Speaker 1: in the New York Times two or three weeks ago
Speaker 1: that you know, disclose that I have been working in
Speaker 1: an advisory capacity with Senator Schumer's office and staff for
Speaker 1: a number of months. We had regular calls and I
Speaker 1: wouldn't have spoken publicly about that that they did, and
Speaker 1: it was in the Times, and I do this with
Speaker 1: lots and lots of House members, and I'm just I
Speaker 1: feel very, very lucky to be in a position now
Speaker 1: where so many people will reach out to me. Chairs
Speaker 1: of powerful committees in the House. You know, after the
Speaker 1: book was published, I one of them reached out and said,
Speaker 1: I've been a deficit hawk my entire time in Congress,
Speaker 1: and I read your book and you've completely changed my views.
Speaker 1: And he said, I want to know if we can
Speaker 1: start working together. So so, you know, Randy Ray worked
Speaker 1: with Senator Rubio and his staff on something I think
Speaker 1: a year and a half or so ago, I worked
Speaker 1: with very briefly. One Republican UH senator his staff reached
Speaker 1: out and wanted some input from me on the legislation
Speaker 1: they were drafting. Wanted to think about it from an
Speaker 1: MMT perspective, and I I was trying to be helpful there. Well,
Speaker 1: this this brings me to an interesting question. And you
Speaker 1: mentioned that someone reached out to you and said I
Speaker 1: used to be a deficit hawk and now I'm not,
Speaker 1: which gets to the question. It's like, and it kind
Speaker 1: of speaks to what you were saying earlier about MMT
Speaker 1: doesn't end the debate, but maybe it gets us to
Speaker 1: a healthier debate where we're actually talking about the real things.
Speaker 1: And there are of course going to be politicians who
Speaker 1: who say oppose expansion of government healthcare, but they don't
Speaker 1: really want to say and they say things like we
Speaker 1: can't afford it, or they say, you know, we're going
Speaker 1: to pass the costs onto our children, or we just
Speaker 1: the cupboard is bare, we can't do it. How many
Speaker 1: you know, in your experience deficit hawkery, how much is
Speaker 1: it actually people care about this gap between federal government
Speaker 1: tax receipts and outlays the technical deficit versus how much
Speaker 1: the deficit is cited as a pretext for opposing some
Speaker 1: policy that actually the person opposes for deeper ideological grounds. Yeah.
Speaker 1: I mean it's such a convenient um, you know, foil
Speaker 1: if if you can empathize with your constituents when they
Speaker 1: ask you, why aren't we doing more to you know,
Speaker 1: better fund our educational system or healthcare or whatever it is,
Speaker 1: and you can just say, listen, I I completely agree
Speaker 1: with you. I wish we could do these things too,
Speaker 1: but you know, we got this deficits, and we've got
Speaker 1: this you know, twenty three trillion dollar dead or whatever,
Speaker 1: and it's sort of a get out of jail free card.
Speaker 1: They don't have to offer much more by way of opposition,
Speaker 1: and to just you know, pat their pockets and say
Speaker 1: I wish I could help, but you know, obviously there's
Speaker 1: no money for that. I think that is useful um
Speaker 1: to a lot of people are perceived as being useful.
Speaker 1: Other people, I think, you know, would like to not
Speaker 1: have to lean into that narrative, but they don't see
Speaker 1: a clear pathway out. And that's what that visits that
Speaker 1: I mentioned early on, right before COVID really hit in
Speaker 1: the US, when I was on the hill. So much
Speaker 1: of what we talked about in that meeting was about messaging.
Speaker 1: It was about Democrats feeling like they had backed themselves
Speaker 1: into a corner for years, I coming back with these
Speaker 1: talking points, always bringing up the deficit, um hitting Republicans
Speaker 1: over the head for adding to the deficit, blowing out
Speaker 1: the national debt. They've said these things and now their
Speaker 1: views are changing and they don't know how to unsay them.
Speaker 1: And they've talked about the Clinton surpluses as this sort
Speaker 1: of badge of honor and tried to paint themselves as
Speaker 1: the party that holds themselves to a different and they
Speaker 1: think higher standard by being the party that wants to
Speaker 1: try to pay for their priorities and worry about the
Speaker 1: deficit and remind people that the last time the budget
Speaker 1: was balanced and in surplus, it was under Democratic leadership, right,
Speaker 1: President Clinton. And so they they're looking for ways to
Speaker 1: message their way out of that and into a new place.
Speaker 1: And that's what we spent a lot of time, uh
Speaker 1: talking about. Hm, that's an interesting point. I hadn't thought of.
Speaker 1: So we're so used to people using the deficit as
Speaker 1: an excuse not to do something. I hadn't thought of
Speaker 1: people using it as, you know, a sort of um
Speaker 1: badge of honor in that way. UM. I wanted to
Speaker 1: ask you about something else that's going on at the moment,
Speaker 1: which is we have seen a rise in bond yields
Speaker 1: and inflation expectations. And for some reason, I was looking
Speaker 1: at one very crude measure of inflation expectations earlier today.
Speaker 1: But for instance, if you look at Google trends, the
Speaker 1: word inflation is being searched for um more than ever
Speaker 1: um or at least in the history of Google trends.
Speaker 1: And I know you're on the record saying that m
Speaker 1: m T S overriding concern is inflation risk. I also
Speaker 1: know that you get a question about inflation every time
Speaker 1: you do this, but I would love to hear your
Speaker 1: take on on what's going on now in the bond
Speaker 1: market and how much that ties into this embrace of
Speaker 1: fiscal policy in d C, Like, how much has that
Speaker 1: actually impacted inflation expectations in your opinion? Yeah, I mean,
Speaker 1: Joe has written about this in a way that I
Speaker 1: think is is really useful and largely reflective of the
Speaker 1: way that I think about this. Uh. You know, anybody
Speaker 1: can look at the kind of backup in yields and
Speaker 1: and create a narrative that fits whatever it is that
Speaker 1: they're looking to defend with respect to what's happening. You know,
Speaker 1: I think that, um, it makes a lot of sense
Speaker 1: to me to say that, you know, no, nobody can
Speaker 1: really tease out inflation expectations, as you said, we can
Speaker 1: come up with these sort of crude ways of trying
Speaker 1: to get at what's happening here. But you know, Chasey,
Speaker 1: I guess my sense is that mostly, you know, this
Speaker 1: is a fairly modest move up, and that what is
Speaker 1: probably telling us is that, you know, people are expecting
Speaker 1: the economy to do better, and that they think that
Speaker 1: the FED might have to move sooner, and they think
Speaker 1: that inflation is going to move higher. And I think that,
Speaker 1: you know, when Powell comes out and tells us that
Speaker 1: the FED fully anticipates that we could see some you know,
Speaker 1: pressures over the summer as the stimulant or the recovery
Speaker 1: of money rolls out and so forth, that they're prepared
Speaker 1: for that they expected to be transitory. Maybe there are
Speaker 1: some people out there who have, you know, different expectations
Speaker 1: and think that the FED might follow a little bit
Speaker 1: behind the curve and have to move sooner. You know.
Speaker 1: I think I think by and large it reflects UH
Speaker 1: optimism and enthusiasm for the economic outlook. What do you
Speaker 1: think about this new FED? I mean, obviously MMT emphasizes,
Speaker 1: of course, fiscal fiscal power as the sort of key
Speaker 1: lever for macro stabilizations we've been talking about. But this
Speaker 1: does seem to be a FED that's undergone changes and
Speaker 1: how it thinks and how it thinks about measuring full
Speaker 1: capacity and full employment and whether it needs to preempt
Speaker 1: inflation lest it sort of get away from us. What's
Speaker 1: you're thinking on this sort of like evolution of the
Speaker 1: FED under sort of the yelling um Powell period. Well,
Speaker 1: I think that, you know, in a lot of ways,
Speaker 1: the FED has become somewhat more humble in the sense
Speaker 1: that you know, they're Jerome Powell made a very clear
Speaker 1: time and time again. I think he used virtually every
Speaker 1: opportunity when he spoke publicly to say, we don't have this, Okay,
Speaker 1: do not expect the central bank to have the ammunition
Speaker 1: that's going to be necessary to get a sustainable recovery underway,
Speaker 1: that it is going to take uh, fiscal policy. We
Speaker 1: need a partner. And that was different, right Bernankee sort
Speaker 1: of did that, but in much more subtle ways. I
Speaker 1: think that and it's not just Powe, it's it's central
Speaker 1: bankers around the world, and now, helped by you know,
Speaker 1: institutions like the I M F and the O E
Speaker 1: c D. You know, everybody is sort of coming to
Speaker 1: agreement around this idea that fiscal policy has to play
Speaker 1: a dominant role in the in the recovery so on inflation.
Speaker 1: You know, Powell had to admit that the FED might
Speaker 1: have tightened preemptively that you know, unemployment, it clearly was
Speaker 1: possible for unemployment to safely move lower without causing inflation
Speaker 1: to move higher. And I think they're doing a lot
Speaker 1: of rethinking, you know, some of their own understanding. You
Speaker 1: have people like Daniel Tarullo, who once served on the
Speaker 1: FED Board of Governors, who after his term expired, went
Speaker 1: out and started stating publicly that the FED does not
Speaker 1: have a reliable model of inflation. Now that was a
Speaker 1: really incredible thing to say, and so it's it's a
Speaker 1: good sign when you know what you don't know and
Speaker 1: you're willing to go back to the drawing board and rethink,
Speaker 1: you know a lot of your priors and what the
Speaker 1: FED can do. And Powell keeps reminding us the FED
Speaker 1: can lend, but the FED can't spend. And so I
Speaker 1: think it's helping to shift us into a sort of
Speaker 1: new paradigm where we are going to see a more
Speaker 1: permanent role uh from you know, the fiscal partner, and
Speaker 1: much less reliance on central banks. And I think that's
Speaker 1: to the benefit. Um. We have asked central banks for
Speaker 1: too long to do too much and and in many ways,
Speaker 1: I think you know, we're we've paid the price for that.
Speaker 1: With central banks just constantly, you know, getting more and
Speaker 1: more creative, pushing interest rates lower and lower. The only
Speaker 1: thing they know how to do is try to engineer
Speaker 1: growth via some kind of run up in in asset prices,
Speaker 1: whether it's real estate, commercial, residential equities. So you mentioned
Speaker 1: like knowing what you don't know there, and I think
Speaker 1: like it is probably fair to say that MMT is
Speaker 1: still in um sort of testing mode, like this is
Speaker 1: probably this is we're seeing the beginnings of this embrace
Speaker 1: as we've been discussing, and we're going to see more
Speaker 1: fiscal programs rolled out in the States, and we're going
Speaker 1: to get an actual test case of some of these
Speaker 1: theories being put into action. What would it take to
Speaker 1: like give you pause, Like what would actually make you
Speaker 1: think like, oh wait, maybe there's something in mm T
Speaker 1: that we you know, got wrong, or maybe there's something
Speaker 1: that we underestimated, something that we need to rethink or
Speaker 1: tweak or revamp. Is there a specific thing that you're
Speaker 1: watching out for, Well, yeah, I think so much. Again,
Speaker 1: so much of mm T is descriptive tracy. Like, right,
Speaker 1: if if Congress wants to pass big and big spending packages,
Speaker 1: they can do it, and this is what we said.
Speaker 1: You know what's interesting for me actually is think back
Speaker 1: to the Republican tax cuts. In the Republicans were getting
Speaker 1: ready to push through these massive tax cuts, and you
Speaker 1: had economists, I won't name them, but they were leading names, right,
Speaker 1: big name economists who came out in opposition to the
Speaker 1: tax cuts, and one of them made the argument that
Speaker 1: if the Republicans are successful in pushing these tax cuts through,
Speaker 1: that we will be these were his words, living on
Speaker 1: a shoe string for decades to come because of the
Speaker 1: deficits that will be created. Because of the deficits, he
Speaker 1: went on to say that it would put us at
Speaker 1: risk because if the economy were to slow down and
Speaker 1: go into recession, that we would no longer have the
Speaker 1: capacity to use fiscal policy to counter the recession because
Speaker 1: what we had done these tax cuts, that left us
Speaker 1: unable to do to act with fiscal policy. Another leading
Speaker 1: top economists was right ing, you know, deficits matter again.
Speaker 1: After Donald Trump took took office and so forth, warning
Speaker 1: that if if you tried to do anything with fiscal
Speaker 1: um in terms of stimulus, that you would be pushing
Speaker 1: interest rates higher, that you would get crowding out effects,
Speaker 1: that the economy would slow down. Now the Republicans passed
Speaker 1: their tax cuts, and unemployment went down, not up, and
Speaker 1: growth went up a little bit. I mean, it wasn't
Speaker 1: a massive boon that was promised, but it was stimulative
Speaker 1: and it did improve things. Uh. And interest rates didn't
Speaker 1: go up. Interest rates have trended down. We had coronavirus,
Speaker 1: we had a recession. And how did Congress respond with
Speaker 1: multi trillion dollar packages one after another. The deficits of
Speaker 1: the past did not impede the ability of Congress to
Speaker 1: respond effectively, uh in the future, So that those folks
Speaker 1: were just simply wrong. And so you know, when you
Speaker 1: ask um, what would cause me to rethink, you know,
Speaker 1: my the strength of my convictions, I guess it would
Speaker 1: be if Congress had authorized uh, you know, multi trillion
Speaker 1: dollars spending package and somehow the checks bounced, you know,
Speaker 1: I mean, I'm serious, you know, because we're only explaining
Speaker 1: that if the votes are there, the money is there.
Speaker 1: And this idea that somehow, you know, there are these
Speaker 1: fiscal constraints or somehow you've got to arrange the financing
Speaker 1: and you might not be able to uh, something might
Speaker 1: go haywire, and all of a sudden, you know that
Speaker 1: the checks don't go out and it just doesn't happen.
Speaker 1: I think, first of all, I think that last point
Speaker 1: or the point that you made about the COVID crisis,
Speaker 1: showing the myth of like oh, we need to like
Speaker 1: save up our fiscal capacity is really interesting and probably
Speaker 1: still underappreciated, because I do think there's still this sort
Speaker 1: of like, oh, it's so unfortunate that we spent so
Speaker 1: much during the good times, and then in instant that
Speaker 1: talking point seems to have gotten disproven because then we
Speaker 1: spent a lot more without without a hiccup. I like
Speaker 1: to do like a sort of like quick lightning round
Speaker 1: of like common m m T questions before we end.
Speaker 1: You know, I always see these questions about MMT, and
Speaker 1: I want to like sort of like get the Stephanie
Speaker 1: Kelton the quick answer. So if we don't need to
Speaker 1: worry about devisits, why do we have taxes, why do
Speaker 1: we need to pay taxes? Well, you know, I'll just
Speaker 1: point you to uh six article written by Beardsley Rummel,
Speaker 1: which is a great name, who was the chair then
Speaker 1: called Chairman of the New York Federal Reserve Bank. This
Speaker 1: is not a short answer, Joe, that's all right. Um.
Speaker 1: Rummel gave us a variety of answers to that question.
Speaker 1: Why do we have taxes? Taxes are important because taxes
Speaker 1: are forced subtraction. Taxes remove dollars from our hands so
Speaker 1: that we don't have them, so that we can't spend them,
Speaker 1: so that the government can spend some of its dollars
Speaker 1: into the economy without creating an inflation problem. So tax
Speaker 1: has helped to remove spending power from the rest of
Speaker 1: us and mitigate inflationary pressures. Taxes are important if you
Speaker 1: want to start up a currency from scratch. And that's
Speaker 1: a much longer answer, but I'll just leave it with
Speaker 1: Taxes are the currency is is it is a tax credit.
Speaker 1: Taxes are important for redistribution. You might raise or lower
Speaker 1: in existing tax or introduce a new tax because you
Speaker 1: care about things like the distribution of wealth and income,
Speaker 1: and you can use taxes for that purpose. You have
Speaker 1: taxes because you want to incentivize or disincentivize certain behaviors.
Speaker 1: So taxes are very useful if you're trying to encourage
Speaker 1: people to buy energy efficient appliances or electric vehicles or
Speaker 1: discourage people from smoking or um, you know, polluting the atmosphere.
Speaker 1: All right, here's another question. Um, if the government isn't
Speaker 1: really borrowing, why do we need to have a bond market. Well,
Speaker 1: we don't technically need to have a on market, but
Speaker 1: the government has chosen to allow folks to trade their
Speaker 1: dollars in for interests sparing form of the US dollar,
Speaker 1: which is a government bond. So it's a very safe
Speaker 1: way to park on an awful lot of money in
Speaker 1: a default risk free asset that gives you a yield,
Speaker 1: that gives you a return. So you get to a
Speaker 1: little bit of an interest subsidy from the federal government
Speaker 1: when you hold US treasuries. All right, here's another one.
Speaker 1: Is it naive if the mm T view is that
Speaker 1: the way to fight inflation is either through taxes or
Speaker 1: perhaps spending or cutting spending, or at least that's one tool.
Speaker 1: Is it naive to think that politicians would ever actually
Speaker 1: sort of quote, do what it takes if inflation did
Speaker 1: run overly hot. Well, I think the first thing to
Speaker 1: do is challenge the first part of the question, that
Speaker 1: it is not the solution to any and all inflation
Speaker 1: is most definitely not to raise taxes. And what MMT
Speaker 1: is trying to do is to say, if we're talking
Speaker 1: about the kind of inflation that results from too much
Speaker 1: spending chasing too few goods, the demand pull kind of inflation,
Speaker 1: then let's integrate inflation risk into the federal budgeting process.
Speaker 1: So the best way to fight inflation is with a
Speaker 1: good offense, right. You don't want to create an inflation
Speaker 1: problem and then try to fight it on the back
Speaker 1: end once it exists. You want lawmakers to be designing
Speaker 1: the legislation, writing the legislation with inflation in mind, which,
Speaker 1: by the way, they do not do today. I worked
Speaker 1: in the Senate. I never heard a staffer or a
Speaker 1: member of the Senate raise inflation as even an afterthought
Speaker 1: when writing multi trillion dollar spending bills. So we want
Speaker 1: inflation to be integrated into the process. So that you're thinking,
Speaker 1: if I were to do this, uh, you know, proposed
Speaker 1: new spending, what is the likelihood that it would create
Speaker 1: inflationary pressures? And how do I mitigate those in the
Speaker 1: legislation before moving forward with a vote. And now I'll
Speaker 1: just ask the Tracy Alloway question. Is an mm T
Speaker 1: just a thing that only works for the U S
Speaker 1: Dollar at the US Well, no, I mean one of
Speaker 1: the running jokes I think on Twitter is Japan says Hi.
Speaker 1: And so you know, so many times people will, um,
Speaker 1: you know, say, if you run these deficits or you
Speaker 1: get the debt way up, interest rates are going to
Speaker 1: go up, inflation is going to go up, and somebody
Speaker 1: will tweet Japan says Hi. Uh so no okay, but
Speaker 1: you know, e M okay Japan. Yeah, they're kind of weird.
Speaker 1: They don't have whatever. What about Egypt, Well, look, you
Speaker 1: can economists like Scott Fullweiler and fiddle Kaboob and others
Speaker 1: are working with e m s and working with you know,
Speaker 1: and I've I've worked I don't know that I should say,
Speaker 1: I'll just say one developing country president and I've I've
Speaker 1: worked with him. And so we're we're very much involved
Speaker 1: in work king in collaboration with UM with governments around
Speaker 1: the world, including in emerging markets. MMT is absolutely helpful
Speaker 1: and the work of photo Kabuba I will say again,
Speaker 1: UM check that out for sure, uh MMT as we've
Speaker 1: actually had them on and so you know, you know
Speaker 1: that that MMT can be helpful in all of these countries. Now,
Speaker 1: it is true, and Tracy knows this. I I know
Speaker 1: she does that. Uh. I mean that MMT is not
Speaker 1: suggesting that every country has, you know, the sort of
Speaker 1: expanded policy space that will allow it to easily orient
Speaker 1: its macro economic policies around, you know, creating a full
Speaker 1: employment economy. There are challenges for many countries that have
Speaker 1: debt denominated in foreign currency, that are more vulnerable to
Speaker 1: swings in their exchange rates, that don't have energy and
Speaker 1: food sovereignty and so forth. So, but that's not to
Speaker 1: say that m MT doesn't have anything to offer by
Speaker 1: way of policy advice and design and so forth. Stephan
Speaker 1: and Calton, thank you so much for coming out odd Luck.
Speaker 1: It was great to be back with you both. Thanks
Speaker 1: for having me, Stephanie. That was great. Stephan I really
Speaker 1: appreciate it. Take care of you guys. Tracy. Obviously I
Speaker 1: like that conversation a lot. Hearing that sort of trajectory, Yeah,
Speaker 1: I know, kind of obvious. Hearing the like the story
Speaker 1: of like that trajectory of like going from like blogging
Speaker 1: to being invited in to talk to some of the
Speaker 1: most powerful UM people in the world about ideas is
Speaker 1: about is to me is about inspiring a story as again, Yeah,
Speaker 1: I mean it's definitely been an upwards trajectory, like the
Speaker 1: arrow has moved in the right direction for MMT economists
Speaker 1: and journalists of course, Joe um So, one thing that
Speaker 1: always stands out when we speak to Stephanie, like her
Speaker 1: point about MMT being a set of descriptive rather than
Speaker 1: prescriptive policies, Like I think, obviously she's right because she's
Speaker 1: sort of come up with it, But like my question
Speaker 1: is still how much does that actually change and if
Speaker 1: it changes the debate or if it allows us to
Speaker 1: avoid wasting time on irrelevant discussions like can we actually
Speaker 1: afford it? Like how much does that actually move the needle?
Speaker 1: And I guess like, is there is there going to
Speaker 1: be a time five or ten years from now when
Speaker 1: instead of politicians going like, oh but the deficit, we
Speaker 1: can't afford this, what if they're going like, oh but
Speaker 1: you know, inflation and fiscal space and I it feels
Speaker 1: like they could use pretty much anything like as an
Speaker 1: excuse or as a justifier for something. Yeah, I mean
Speaker 1: I would saying like, my my sense is like two things,
Speaker 1: and one is it does seem like a little harder.
Speaker 1: I mean, I don't know. I mean, one thing that
Speaker 1: we know about fighting about or talking about inflation online
Speaker 1: is that people will see it even if it's not there, right,
Speaker 1: So it's like the inflation measures can come in very mild,
Speaker 1: but people will convince themselves that we're living in an
Speaker 1: age of hyper inflation regardless. So I do think like
Speaker 1: that is a good point. In the other hand, maybe
Speaker 1: it's like not quite as like you know, it's like
Speaker 1: the bond vigilantees or the kids are gonna have to
Speaker 1: pay for it and we're gonna become Greece one day.
Speaker 1: It's like you can never disprove that, right, Like it's like,
Speaker 1: well we have to you know, something may happen ten
Speaker 1: years from now. It has been really bad, so we
Speaker 1: have to do this. So I think it's a little harder.
Speaker 1: But I do think also like you know, there are
Speaker 1: just people are going to have different policy priorities, and
Speaker 1: there are you know, there are a lot of people
Speaker 1: who believe that the government should have some sort of
Speaker 1: single payer healthcare, and there are a lot of people
Speaker 1: who strongly don't think that and that that's bad and
Speaker 1: that socialism and I don't think that like, um, that's
Speaker 1: never gonna go away, like people that are gonna just
Speaker 1: be But it does feel like at least we can
Speaker 1: sort of like move past some of the deficit stuff.
Speaker 1: It is a more honest political conversation that we can have.
Speaker 1: On some level, I feel like the problem is forever politics.
Speaker 1: I think like that's the conclusion to everything that's wrong
Speaker 1: in the world, Like the problem is politics always and forever. Yeah,
Speaker 1: but man is a political animal and so yeah, so
Speaker 1: that will be for thousands of years we will be
Speaker 1: fighting about how different people feel that they should reshape
Speaker 1: the world. Right, And to be fair, we're probably asking
Speaker 1: a lot of an economic theory to try to fix
Speaker 1: that problem. Like that's probably a little bit too ambitious.
Speaker 1: But again, and it goes back to what we were saying,
Speaker 1: like it does feel like the debate these days. I
Speaker 1: I think it's it's a little bit more enlightened than
Speaker 1: it was in two thousand nine, in two thousand ten,
Speaker 1: so like things do change. And again, it's not I'm
Speaker 1: not saying it because like, Okay, we got this like
Speaker 1: fiscal expansion and that's good or bad. But it does
Speaker 1: feel like the parameters of the debate, so you look
Speaker 1: at even critics of the of the stimulus. They're talking
Speaker 1: about these things like inflation and inflationary pressures and capacity
Speaker 1: and how do you measure fiscal capacity or inflationary capacity,
Speaker 1: which wasn't really even like part of the discussion in
Speaker 1: a meaningful way, you know, like two thousand nine tended
Speaker 1: anywhere near the same level. So maybe maybe things the
Speaker 1: language has certainly changed. Absolutely, All right, um, shall we
Speaker 1: leave it there. Let's leave it there. This has been
Speaker 1: another episode of the All Thoughts podcast. I'm Tracy Allawait.
Speaker 1: You can follow me on Twitter at Tracy Allaway and
Speaker 1: I'm Joe Wisn'tal. You can follow me on Twitter at
Speaker 1: the Stalwart, and be sure to follow our guest Stephanie Kelton.
Speaker 1: She's at Stephanie Kelton. The paperback version of her book
Speaker 1: The Deficit Myth now out. Check that out as well.
Speaker 1: Follow our producer Laura Carlson, She's at Laura M. Carlson.
Speaker 1: Follow the Bloomberg head of podcast, Francesco Levi at Francesco Today,
Speaker 1: and check out all of our podcasts at Bloomberg under
Speaker 1: the handle and podcasts. Thanks for listening.