WEBVTT - Stephanie Kelton on How MMT Won the Fiscal Policy Debate 0:00:11.000 --> 0:00:15.040 Hello, and welcome to another episode of the Odd Lots Podcast. 0:00:15.120 --> 0:00:20.239 I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, Uh, you 0:00:20.280 --> 0:00:22.360 know what I was just thinking about. You don't troll 0:00:22.480 --> 0:00:26.120 me about mm T anymore these days? Remember that when 0:00:26.280 --> 0:00:29.639 used to do that. Yes, all roads led back to 0:00:30.200 --> 0:00:33.360 MMT for well, I mean to some extent, they still do. 0:00:33.479 --> 0:00:35.519 For the past year or so, we've been talking a 0:00:35.560 --> 0:00:39.560 lot about the shift from monetary policy to your school stimulus, 0:00:39.600 --> 0:00:44.280 and that's a big component of mm T. Yeah, you 0:00:44.360 --> 0:00:47.080 used to every episode You're like, Joe, why I didn't 0:00:47.080 --> 0:00:48.800 Are you gonna bring up I m MT? But I 0:00:48.880 --> 0:00:53.360 guess we haven't really done that explicitly in a long time. Um, 0:00:53.400 --> 0:00:55.800 And so you stopped. You stopped joking about that with me. 0:00:56.160 --> 0:00:58.840 But today we aren't going to have to joke because 0:00:58.920 --> 0:01:01.080 that's actually literally what we're going to be talking about. 0:01:01.640 --> 0:01:06.240 It is an MMT episode. Yeah, And you know, I think, Um, 0:01:06.240 --> 0:01:08.120 one of the things that's really striking to me, and 0:01:08.120 --> 0:01:10.720 I'll just say this is that on some extent, to 0:01:10.800 --> 0:01:14.600 some extent, I really think that MMT has completely won 0:01:14.640 --> 0:01:17.960 the debate. And by that, I mean we have this 0:01:18.040 --> 0:01:21.760 big fiscal expansion happening in the US, and deficits by 0:01:21.840 --> 0:01:25.200 historical measures are very high, and there are certainly people 0:01:25.240 --> 0:01:28.400 who are like upset about it or angry about it. 0:01:28.440 --> 0:01:30.640 But it really feels like the entire debate is like 0:01:30.800 --> 0:01:38.319 essentially happening on MMT terms or MMT language. So you're right, 0:01:38.480 --> 0:01:44.399 we definitely don't hear UM many mentions of bond vigilantes anymore. 0:01:44.560 --> 0:01:47.400 We don't hear people talking about, you know, how are 0:01:47.400 --> 0:01:50.600 we going to fund social programs? The deficit is so large, 0:01:50.640 --> 0:01:52.480 that sort of thing like that seems a little bit 0:01:52.600 --> 0:01:57.960 old fashioned now in many respects, I do wonder, I 0:01:58.000 --> 0:02:01.600 do wonder how much MMT can take credit for that 0:02:02.040 --> 0:02:05.400 versus the fact that we've just had such an unusual 0:02:05.520 --> 0:02:10.079 economic crisis, you know, this big exogenous shock basically, so 0:02:10.200 --> 0:02:12.680 people are able to use that as an excuse to 0:02:12.880 --> 0:02:15.720 overwrite those concerns UM. And this is something we spoke 0:02:15.760 --> 0:02:19.200 about on a recent episode of the podcast. But like, 0:02:19.280 --> 0:02:22.320 it seems like this crisis was so unusual it really 0:02:22.360 --> 0:02:26.320 opened the door to people UM thinking about stuff differently. 0:02:26.360 --> 0:02:30.000 But but you're absolutely right, m MT. It's definitely not 0:02:30.080 --> 0:02:33.920 a fringe movement anymore now, And I think you're you're right. 0:02:33.960 --> 0:02:36.040 There's a lot of things that have happened, both in 0:02:36.080 --> 0:02:40.440 this crisis and over the last decade. The persistent lack 0:02:40.480 --> 0:02:45.240 of inflation despite you know, FEDS balance sheet expansion, despite 0:02:45.280 --> 0:02:50.600 deficits that obviously perhaps changed people's thinking, the nature of 0:02:50.639 --> 0:02:54.079 this crisis, and the sort of unanimous nothing's unanimous, but 0:02:54.160 --> 0:02:58.000 widespread belief that the government had a role in underwriting 0:02:58.080 --> 0:03:01.440 the recovery due to it's on usual nous. But it 0:03:01.480 --> 0:03:03.080 really is striking, like you know, coming out of a 0:03:03.080 --> 0:03:08.880 great financial crisis Greece and bond vigilantes, and there's still 0:03:09.200 --> 0:03:12.440 you know, there are critics of the existing stimulus for sure, 0:03:12.919 --> 0:03:15.799 and they didn't get a single Republican vote, but it's 0:03:15.840 --> 0:03:19.840 all on different terms. Now it's about inflationary pressures, which 0:03:19.919 --> 0:03:22.560 was always sort of the MMT view of like, well 0:03:22.600 --> 0:03:26.000 those the limits to spending, not the sort of credit 0:03:26.040 --> 0:03:29.640 worthiness of the government. And so even though there's a 0:03:29.720 --> 0:03:34.320 long you know, there's still huge policy fights and debates happening. Um, 0:03:34.400 --> 0:03:38.480 they really have changed a lot, and I think it's 0:03:38.480 --> 0:03:41.560 a pretty legit question the degree to which m m 0:03:41.680 --> 0:03:43.880 T thinkers have made that happen. But I do think 0:03:43.880 --> 0:03:47.200 it's part of what's really changed the whole discussion. Yeah, 0:03:47.240 --> 0:03:51.080 now you mentioned policy there, and I'm really, I really 0:03:51.080 --> 0:03:54.760 want to get into that particular topic when it comes 0:03:54.760 --> 0:03:57.440 to MMT, because I think one of the big criticisms 0:03:57.520 --> 0:04:00.120 of it as a school of thought is that it 0:04:00.520 --> 0:04:04.080 even if you agree that MMT is the best um 0:04:04.480 --> 0:04:08.560 way to describe the economic system, it might not actually 0:04:08.680 --> 0:04:12.119 lead to specific policy prescriptions, or it might not lead 0:04:12.120 --> 0:04:16.440 to policy prescriptions that are all that different. So politicians 0:04:16.440 --> 0:04:19.880 can agree that spending is bound by inflation, but maybe 0:04:19.920 --> 0:04:23.080 they all have different ideas still about how best to 0:04:23.160 --> 0:04:26.560 spend money. So I would love to dive into that 0:04:26.680 --> 0:04:29.359 a little bit more. Great, Well, we are going to 0:04:29.400 --> 0:04:33.320 be speaking with the pre eminent person who, without question, 0:04:33.360 --> 0:04:37.159 has done more to advance the mm team message over 0:04:37.160 --> 0:04:41.120 the last decade than literally anyone else. We spoke to 0:04:41.160 --> 0:04:42.840 her a couple of years ago, a year and a 0:04:42.839 --> 0:04:45.719 half ago at our Odd Lots Live event New York City, 0:04:46.200 --> 0:04:49.320 so excited to have her back on. We're gonna be talking, 0:04:49.320 --> 0:04:52.240 of course, with Stephanie Kelton, professor of economics and public 0:04:52.279 --> 0:04:55.400 Policy at Stony Brook and the author of the New 0:04:55.480 --> 0:04:58.680 York Times best selling book the deficit myth which just 0:04:58.760 --> 0:05:02.680 came out in paper at UM last week. And so 0:05:02.839 --> 0:05:05.880 very excited Stephanie, thank you so much for joining us. Oh, 0:05:05.920 --> 0:05:07.599 it's really nice to be back with both of you. 0:05:07.680 --> 0:05:11.160 Thank you. Do you think that's right? I mean, I 0:05:11.200 --> 0:05:14.640 said I think that on some level MMT has won 0:05:15.120 --> 0:05:18.039 the debate at least in terms of how the debate 0:05:18.120 --> 0:05:21.120 is defined. Does it feel that way to you? Yeah? 0:05:21.120 --> 0:05:24.600 And you know, I'll tell you something that I don't 0:05:24.640 --> 0:05:28.680 really I don't think I've ever probably said publicly, but um, 0:05:29.040 --> 0:05:32.800 I started to feel like MMT was beginning to win 0:05:32.839 --> 0:05:37.000 the debate before COVID. And you know, one of the 0:05:37.040 --> 0:05:40.640 things that I did early last year was to go 0:05:41.040 --> 0:05:44.800 UM to Washington, d C. At the invitation of House 0:05:44.880 --> 0:05:48.720 Leadership and to sit down. Scott Fellwiler was with me, 0:05:49.320 --> 0:05:51.960 and I won't say exactly who was in the room 0:05:52.040 --> 0:05:55.000 because I think we were probably not supposed to do that. 0:05:55.080 --> 0:05:59.080 But the point is we were there UM at their 0:05:59.120 --> 0:06:02.600 invitation to talk MMT. And the reason that they wanted 0:06:02.720 --> 0:06:06.560 us is because, uh, they were thinking ahead, and they 0:06:06.600 --> 0:06:12.040 were thinking about what a Biden presidency with potentially Democrats 0:06:12.040 --> 0:06:15.520 and control of the House and Senate would mean for 0:06:16.080 --> 0:06:20.200 h legislatively right, what what could they do? How ambitious 0:06:20.240 --> 0:06:23.279 and bold could they be? And how should they begin 0:06:23.320 --> 0:06:27.039 to think now about you know, rethink, I should say, 0:06:27.120 --> 0:06:30.200 the federal budgeting process, how they approached the question of 0:06:30.320 --> 0:06:33.280 you know, paying for their priorities and so forth. So 0:06:33.960 --> 0:06:36.640 that was pretty encouraging to me. And it was meant 0:06:36.640 --> 0:06:39.799 to be start of a conversation. And I was told, 0:06:39.839 --> 0:06:41.200 you know, we want to have you back in front 0:06:41.200 --> 0:06:44.240 of a bigger audience and uh. And then of course 0:06:44.400 --> 0:06:47.800 coronavirus happened. But I thought that was a pretty good 0:06:47.800 --> 0:06:52.520 indication of the you know impact that we were having. Um, 0:06:52.680 --> 0:06:57.279 you know, where it matters most. And in Congress, I 0:06:57.320 --> 0:07:01.560 wanna delve into the policy prescriptions like I mentioned, But 0:07:01.720 --> 0:07:05.200 before we do, could you could you maybe contrast, you know, 0:07:05.240 --> 0:07:09.720 where we are now to where we were when you 0:07:09.880 --> 0:07:14.760 first started thinking seriously and writing seriously about MMT, Like 0:07:14.960 --> 0:07:20.200 how different is the environment back then versus you speaking 0:07:20.240 --> 0:07:24.840 to prominent politicians about how MMT could actually be enacted 0:07:24.880 --> 0:07:28.680 in serious ways. Oh, Tracy, I mean I was just 0:07:28.760 --> 0:07:32.760 a kid in some respects when I first got I 0:07:32.800 --> 0:07:37.360 was in graduate school. I started, you know, in the 0:07:37.360 --> 0:07:42.680 mid nineties nineties. I graduated, I finished up my undergraduate degree, 0:07:42.720 --> 0:07:45.560 and I was supposed to go off to Cambridge University 0:07:45.600 --> 0:07:48.480 and start a graduate program. And I had this sort 0:07:48.520 --> 0:07:52.040 of gap where I graduated in December and Cambridge wasn't 0:07:52.040 --> 0:07:54.160 going to start until October, I think of the next year, 0:07:54.200 --> 0:07:57.440 and I had this this void in this time, and 0:07:57.480 --> 0:08:01.480 my parents said, get a job. And one of my professors, 0:08:01.520 --> 0:08:04.360 my undergrad professor, said no, no, no, go to Denver 0:08:04.480 --> 0:08:07.960 and work with Randy Ray and spend some time there 0:08:08.000 --> 0:08:10.000 before you go off to Cambridge. And I thought, well, 0:08:10.040 --> 0:08:11.760 that's brilliant idea. You know, I get sort of a 0:08:11.880 --> 0:08:15.520 dress rehearsal uh for graduate school. And I went and 0:08:15.560 --> 0:08:18.520 I worked with Randy Ray, who's you know, was there 0:08:18.560 --> 0:08:21.240 on the ground floor. He was just beginning to write 0:08:21.880 --> 0:08:25.840 UM a book called Understanding Modern Money. That was I 0:08:25.880 --> 0:08:30.280 think his first real entry into MMT, and that began 0:08:30.360 --> 0:08:32.760 to lay it out the scholarship, and so I got 0:08:32.840 --> 0:08:35.640 a little bit of it there with him. But then 0:08:35.800 --> 0:08:38.199 I finished up a year at Cambridge and I ended 0:08:38.280 --> 0:08:41.240 up at the Levy Economics Institute, and Randy was there. 0:08:41.440 --> 0:08:44.360 And I'm sure we'll talk later about when Godly and 0:08:44.400 --> 0:08:47.319 people like that, and when was there and now MMT 0:08:47.559 --> 0:08:50.600 was really getting going, but I was still a graduate student, 0:08:50.720 --> 0:08:54.239 so I was writing papers and I ended up finishing 0:08:54.440 --> 0:08:57.240 my program at the News School. So you know the 0:08:57.320 --> 0:09:02.560 way that we were part of a team of academics, um, 0:09:02.559 --> 0:09:06.040 but we were mostly you know, presenting our work at 0:09:06.040 --> 0:09:09.640 academic conferences and doing the usual thing writing peer review 0:09:09.720 --> 0:09:13.160 journal articles take a year two sometimes more to get 0:09:13.520 --> 0:09:18.000 in print. And then two thousand eight crisis came and 0:09:18.040 --> 0:09:21.520 that really changed everything. That's where you know, I got 0:09:21.559 --> 0:09:23.880 this idea that I would start a blog and we 0:09:23.920 --> 0:09:26.600 would try to use social media to become part of 0:09:26.640 --> 0:09:30.720 a larger conversation, uh and get our ideas in different 0:09:30.720 --> 0:09:33.680 ways of thinking about things out there. So that was 0:09:33.720 --> 0:09:36.720 an exciting time because for the first time we were 0:09:37.400 --> 0:09:41.800 having dialogue with people, you know, outside academia narrowly, and 0:09:41.880 --> 0:09:45.280 the media started to pay some attention and things just 0:09:45.480 --> 0:09:49.600 evolved from there. Can you talk about that a little 0:09:49.600 --> 0:09:53.160 bit further. I mean, there are a lot of academics 0:09:53.200 --> 0:09:57.840 in all kinds of fields, I'm sure, economic, sociology, everything, 0:09:57.880 --> 0:10:00.800 who sort of toil away. I don't want say toil 0:10:00.880 --> 0:10:03.880 but write an obscure journals that get read by fifty 0:10:03.920 --> 0:10:08.360 people speak to classes, but don't really have any sort 0:10:08.400 --> 0:10:12.040 of like meaning. It doesn't really jump the chasm into 0:10:12.080 --> 0:10:15.680 the mainstream discussion. Can you talk a little bit more 0:10:15.720 --> 0:10:19.920 about when you started noticing that happening with your work 0:10:19.920 --> 0:10:23.200 and MMT and just like the role of UH new 0:10:23.200 --> 0:10:27.880 media social media, twitter, blogs, etcetera in turning what what 0:10:28.000 --> 0:10:31.400 you know going from those journals into the discussion where 0:10:31.480 --> 0:10:35.280 policy changes. Sure, I mean, you know, we started committing 0:10:35.360 --> 0:10:39.680 ourselves in writing on that blog that i UM launched 0:10:39.679 --> 0:10:42.840 called New Economic Perspectives, And you know, you're launching a 0:10:42.880 --> 0:10:45.079 brand new blog and nobody knows it exists, and it's 0:10:45.200 --> 0:10:47.839 very hard to start to get people reading it. And 0:10:48.080 --> 0:10:50.680 you're out there dropping links to everything you've written in 0:10:50.800 --> 0:10:53.400 other on other people's blogs the comments section. They don't 0:10:53.400 --> 0:10:56.040 always like that, but it was a way to try 0:10:56.080 --> 0:10:59.800 to build a readership. And then there were some people 0:11:00.040 --> 0:11:03.560 who started to pay attention in the very beginning, some 0:11:03.679 --> 0:11:07.400 guy UH named Joe Wisenthal I think at Business Insider, 0:11:07.640 --> 0:11:12.120 who's he's one of the first. I mean, honestly, he 0:11:12.840 --> 0:11:16.719 really was one of the first, I think financial journalists 0:11:17.120 --> 0:11:19.880 who started to take a look at what the kinds 0:11:19.880 --> 0:11:22.240 of things that we were saying and what we were writing, 0:11:22.280 --> 0:11:26.800 and um, and took them seriously enough to wonder, sometimes 0:11:26.800 --> 0:11:30.640 wonder aloud, and to repost things or whatever and and say, 0:11:30.679 --> 0:11:32.880 you know, the sort of curious what these people are 0:11:32.920 --> 0:11:36.000 saying and it's such a departure from what we normally here. 0:11:36.160 --> 0:11:38.960 And then you know, a handful of others started to 0:11:39.000 --> 0:11:42.040 do it. I think even John Carney, who maybe was 0:11:42.080 --> 0:11:46.080 writing for CNBC at the time, he started to look 0:11:46.120 --> 0:11:49.760 more closely and and uh, Pedro DaCosta, who maybe was 0:11:49.800 --> 0:11:51.840 at Reuter's or I don't know where he was. But 0:11:52.000 --> 0:11:55.160 there were a handful of you guys who were you 0:11:55.200 --> 0:11:58.160 know too, who were kind to us I think that's 0:11:58.200 --> 0:12:01.920 the right word in the early years, and weren't dismissive, 0:12:02.440 --> 0:12:05.760 didn't didn't just you know, go full on embrace of 0:12:05.920 --> 0:12:08.360 the ideas, but gave it a shot and gave it 0:12:08.400 --> 0:12:10.880 a mention, and it really did do a lot for 0:12:10.960 --> 0:12:15.400 us to to help us elevate, you know, the work 0:12:15.440 --> 0:12:18.280 that we were doing, and to give us a shot 0:12:18.440 --> 0:12:22.959 to prove ourselves credible and worth maybe you know, paying 0:12:22.960 --> 0:12:26.800 a bit of attention to why do you think mmt 0:12:27.400 --> 0:12:32.080 resonated with I guess journalists and also a broader audience 0:12:32.120 --> 0:12:34.560 like what was the attraction or what was the thing 0:12:34.640 --> 0:12:39.040 that opened the door to people like I guess having 0:12:39.040 --> 0:12:43.640 an open mind towards a fairly radical like rethinking of 0:12:43.760 --> 0:12:48.920 traditional economics. Yeah, I mean I think maybe you know, 0:12:49.000 --> 0:12:51.640 I'm not a journalist, but if I were, I think 0:12:51.720 --> 0:12:54.400 I would be looking for things that are new and 0:12:54.480 --> 0:12:58.520 different that spark a bit of controversy. Um, you know 0:12:58.640 --> 0:13:00.880 that that would be more fun to write about. I 0:13:00.880 --> 0:13:04.360 think those sorts of things and uh, pull new ideas 0:13:04.400 --> 0:13:07.840 in and and punch them around and see what happens. 0:13:07.880 --> 0:13:10.760 So I think to some extent, maybe we were red 0:13:10.800 --> 0:13:15.320 meat for some and we were an interesting new way 0:13:15.320 --> 0:13:19.079 of thinking for others. But uh yeah, I think people 0:13:19.120 --> 0:13:24.200 probably you know, used us in different ways over time. Um. 0:13:24.320 --> 0:13:27.840 But but a good story. You know, there's this sort 0:13:27.840 --> 0:13:31.200 of group of economists who don't come from the Ivy 0:13:31.240 --> 0:13:36.720 League universities, nobody's ever heard of or and they're out 0:13:36.720 --> 0:13:41.920 here saying some some really unusual things. And so it 0:13:41.960 --> 0:13:46.679 became a story of sorts. If I could just talk 0:13:46.760 --> 0:13:51.160 first person for one second. One of the attractions for me, 0:13:51.360 --> 0:13:54.080 for your work and others. Very early on two thousand 0:13:54.080 --> 0:13:56.719 and ten or so, was that there just seemed to 0:13:56.760 --> 0:13:59.719 be a lot of things happening in the economy the 0:14:00.200 --> 0:14:03.680 um the mainstream writers and thinkers didn't seem to have 0:14:03.800 --> 0:14:06.120 very compelling answers for And the biggest one to me 0:14:06.480 --> 0:14:10.920 was why is it that government debt is exploding and 0:14:11.080 --> 0:14:14.920 we don't seem to have higher interest rates or hyper 0:14:14.960 --> 0:14:19.400 inflation or uh, you know, dramatically weakening currency. And so 0:14:19.440 --> 0:14:22.000 it's like these were just this was like a puzzle 0:14:22.040 --> 0:14:23.520 out there to me, and you know, I was like 0:14:23.520 --> 0:14:26.080 looking for answers, and I it's not that I was 0:14:26.120 --> 0:14:29.960 like entirely convinced right away, oh that you guys have 0:14:30.040 --> 0:14:33.880 the answer, but at least like you're supplying I thought, 0:14:33.960 --> 0:14:37.840 like something, but I'm curious, like you know how much. 0:14:38.000 --> 0:14:39.600 One of the things that we talked about on a 0:14:39.640 --> 0:14:43.960 recent episode was this idea that the between the Great 0:14:44.000 --> 0:14:47.840 Financial Crisis and the coronavirus crisis, there seemed to be 0:14:47.920 --> 0:14:50.800 a lot of things that actually happened in the real 0:14:50.840 --> 0:14:55.520 world that we're not helpful to mainstream macro. So we 0:14:55.560 --> 0:14:59.960 didn't have hyper we didn't have inflation, let alone hyper inflation, 0:15:00.040 --> 0:15:03.320 and the unemployment rate went down a lot further than 0:15:03.400 --> 0:15:07.760 people would have, um expected. All kinds of sort of 0:15:07.760 --> 0:15:10.640 mainstream views didn't seem to work out. Que didn't really 0:15:10.680 --> 0:15:13.200 have much of an effect. Talked to us about that 0:15:13.280 --> 0:15:16.440 as well. That's sort of like that period in which 0:15:16.480 --> 0:15:20.440 it felt like mainstream views became a little bit discredited 0:15:20.480 --> 0:15:24.920 by facts on the ground. That's exactly right. Everything that 0:15:25.040 --> 0:15:29.200 the mainstream had been warning about for decades really kept 0:15:29.200 --> 0:15:33.280 not happening. Uh. And as the evidence mounted, and you know, 0:15:33.320 --> 0:15:35.680 I think this is one of the things that really 0:15:35.760 --> 0:15:40.280 did earn us some some cred, some street cred, was 0:15:40.360 --> 0:15:44.520 that we were writing in real time, Uh as the 0:15:44.840 --> 0:15:49.320 you know, European debt crisis was unfolding. Um, we we 0:15:49.320 --> 0:15:54.160 were taking positions and had taken positions early on that. Um. 0:15:54.200 --> 0:15:57.120 You know, there was this design flaw in the Mastic Treaty, 0:15:57.240 --> 0:15:59.760 and that a debt that a debt crisis was entirely 0:16:00.000 --> 0:16:03.040 possible due to the fact that these countries, in giving 0:16:03.120 --> 0:16:06.640 up their sovereign currencies and adopting this common currency which 0:16:06.640 --> 0:16:10.240 they could no longer issue, would mean eventually the financial 0:16:10.280 --> 0:16:13.680 markets would figure out that they were lending two currency users, 0:16:13.720 --> 0:16:16.120 and they would begin to price that default risk in 0:16:16.600 --> 0:16:18.520 and yields could blow out. And I mean, we had 0:16:18.600 --> 0:16:22.520 written it all up years before the thing happened, and 0:16:23.040 --> 0:16:27.000 when others became surprised and then later confused, because if 0:16:27.000 --> 0:16:29.320 it can happen to Greece, then it can happen here. 0:16:29.840 --> 0:16:33.240 Only our deficits got very large, you know, ten percent 0:16:33.280 --> 0:16:37.120 of GDP uh and interest rates went down, not up, 0:16:37.640 --> 0:16:41.400 and then we had the downgrade, you know, US government 0:16:41.520 --> 0:16:44.320 bonds were downgraded, and people said, oh, this is the end. 0:16:44.440 --> 0:16:46.200 You know, yields are going to spy it, and we 0:16:46.240 --> 0:16:48.080 said no, no, no, And of course the rates went 0:16:48.120 --> 0:16:50.480 down the next day. And then you can always look 0:16:50.520 --> 0:16:54.640 to Japan and the warnings for years with respect to 0:16:54.680 --> 0:16:58.800 their debt and persistent deficits and currency holds up and 0:16:58.840 --> 0:17:02.400 they can't get inflation anywhere close to the two percent targets. 0:17:02.440 --> 0:17:04.680 Some would say in spite of QUI I would say 0:17:05.160 --> 0:17:09.040 maybe even partly because of I mean, there's just the 0:17:09.280 --> 0:17:11.920 models and the things that we thought we understood about 0:17:11.920 --> 0:17:15.960 relationships between deficits and interest rates and and dead and 0:17:16.280 --> 0:17:19.960 um and printing money so called, and inflation, and so 0:17:20.080 --> 0:17:23.840 we're just kept not bearing any fruit. And at some point, 0:17:24.200 --> 0:17:27.040 you know, we were writing all along about why we 0:17:27.119 --> 0:17:30.320 understood things to work differently and why what was happening 0:17:30.359 --> 0:17:34.080 was consistent with our models UM and so I think 0:17:34.800 --> 0:17:38.160 you know, as I said, I think it earned us 0:17:38.200 --> 0:17:57.840 some credibility. So I want to pivot slightly to UM 0:17:57.880 --> 0:18:02.240 specific policy prescription from mm T. And as I mentioned 0:18:02.240 --> 0:18:04.239 in the intro, I think this has been one of 0:18:04.359 --> 0:18:10.800 the criticisms. But what does an MMT policy actually look like? 0:18:11.359 --> 0:18:16.240 Is it focused on reaching full employment or can it 0:18:16.320 --> 0:18:21.560 be related to you know, any sort of government spending. Well, 0:18:21.760 --> 0:18:25.840 I think you know, we generally accept the idea that 0:18:26.240 --> 0:18:29.560 you know, the dual mandate makes sense. The goals of 0:18:29.560 --> 0:18:33.480 the dual mandate. You want an economy high levels of 0:18:33.520 --> 0:18:37.760 employment and low levels of inflation, you know, broadly balanced 0:18:37.920 --> 0:18:42.240 macro economic conditions in the economy. For from the very 0:18:42.280 --> 0:18:45.399 beginning though, we just thought that the central Bank was 0:18:45.600 --> 0:18:49.720 not the proper institution, at least not to bear primary 0:18:49.760 --> 0:18:55.520 responsibility for delivering on those objectives. That uh, in fact, 0:18:55.560 --> 0:19:00.680 fiscal policy was a more durable, reliable, appropriate tool, if 0:19:00.760 --> 0:19:04.120 not you know, as a replacement, at least is a 0:19:04.240 --> 0:19:08.439 very strong front facing part of the way that you 0:19:08.560 --> 0:19:12.560 get that outcome, that you achieve a balanced economy. So 0:19:13.040 --> 0:19:17.760 MMT does not come with a prepackaged set of policy proposals. 0:19:17.800 --> 0:19:20.280 You hand someone this set of ideas and say, here, 0:19:20.320 --> 0:19:22.480 go do this. This is mm T m T S. 0:19:22.880 --> 0:19:24.919 You know, I sometimes say it's not a verb, it's 0:19:24.960 --> 0:19:29.280 an adjective. It's mostly a description of the nature the 0:19:29.320 --> 0:19:33.639 monetary system and the mechanics of government finance. Uh. And 0:19:33.840 --> 0:19:36.800 you can apply that lens. You can use that m 0:19:36.880 --> 0:19:39.520 m T understanding to look at any country in the world, 0:19:39.600 --> 0:19:43.479 understand their monetary system, and explain the mechanics of how 0:19:43.520 --> 0:19:47.880 government finance will work in that country, what the constraints 0:19:47.880 --> 0:19:52.440 would be given different types of monetary systems and other things, um. 0:19:52.520 --> 0:19:57.120 And then you can craft policy based on the spending 0:19:57.160 --> 0:20:01.880 capacity of that country. But you the policy prescriptions themselves 0:20:01.960 --> 0:20:03.880 don't fall out of an m m T box. They 0:20:03.920 --> 0:20:08.719 come out of the political process. So if we accept 0:20:08.800 --> 0:20:13.359 that MMT is more of an adjective or a description 0:20:13.560 --> 0:20:15.879 of the existing system or like sort of more of 0:20:15.920 --> 0:20:21.880 a state of mind than a set of policy uh prescriptions, 0:20:21.920 --> 0:20:26.119 Like I'm curious, how much does that change things in 0:20:26.200 --> 0:20:29.760 your opinions? So if tomorrow every single person in the 0:20:29.800 --> 0:20:35.000 world woke up and accepted MMT has like, you know, 0:20:35.320 --> 0:20:39.119 the way the economy actually works, what do you think 0:20:39.160 --> 0:20:43.080 would change, Like how different with the world look? Well, 0:20:43.200 --> 0:20:45.800 I you know, I've often said that I think the 0:20:46.359 --> 0:20:50.400 big breakthrough will be that we start having more fruitful debates, 0:20:50.800 --> 0:20:54.560 that we stop debating and wringing our hands over things 0:20:54.600 --> 0:20:57.760 that aren't of concern, that aren't legitimate. You know, I 0:20:57.800 --> 0:21:04.480 will often say that MMT is about replacing an artificial, fake, phony, 0:21:04.680 --> 0:21:09.320 imaginary budget constraint with a real resource constraint, with an 0:21:09.359 --> 0:21:12.920 inflation constraint. So when I say the debate would change, 0:21:12.960 --> 0:21:15.720 I mean that we would not be bogged down and 0:21:15.880 --> 0:21:18.560 debating all the kinds of things. Joe opened the program 0:21:18.600 --> 0:21:21.760 talking about, you know, we're gonna run out of money. 0:21:21.800 --> 0:21:24.720 We're going to burden the next generation. The bond vigilantes 0:21:24.720 --> 0:21:27.760 will come after us. We will China will turn off 0:21:27.760 --> 0:21:30.359 this picket and no more dollars will come out. All 0:21:30.359 --> 0:21:34.520 of those things that hamstrung us, you know for so 0:21:34.720 --> 0:21:38.400 many years. When we think about what's possible, we could 0:21:38.400 --> 0:21:41.440 set those things aside and then start having a very 0:21:41.440 --> 0:21:44.159 different kind of debate if we could all come to 0:21:44.320 --> 0:21:48.200 some kind of agreement about, you know, the low hanging fruit, 0:21:48.440 --> 0:21:51.280 how much fiscal space do we think is available, then 0:21:51.359 --> 0:21:53.080 we would just be debating how do we want to 0:21:53.200 --> 0:21:57.280 use that fiscal space. And that's where the politics are unavoidable. 0:21:57.520 --> 0:22:00.399 Republicans will want to use up physical space doing tax 0:22:00.440 --> 0:22:03.399 cuts and you know other things, and Democrats will want 0:22:03.400 --> 0:22:07.679 to use physical space doing healthcare, education, or infrastructure, climate. UM. 0:22:07.760 --> 0:22:10.840 So you still end up with a healthy debate, I 0:22:10.880 --> 0:22:15.080 think a healthier debate because you're no longer um worrying 0:22:15.080 --> 0:22:19.320 about things that won't happen, and you start focusing on 0:22:19.320 --> 0:22:24.520 on the real areas of concern. So the next criticism 0:22:24.600 --> 0:22:27.800 that comes, or the sort of logical sequence of this 0:22:28.119 --> 0:22:31.040 I see it in discussions all the time, is that, Okay, 0:22:31.200 --> 0:22:35.680 you're right, the real constraint is inflation, real resource constraints. 0:22:36.320 --> 0:22:40.959 But you have no way of measuring actual physical capacity. 0:22:41.440 --> 0:22:44.040 You have no way of really defining where we knowing 0:22:44.080 --> 0:22:47.200 where we are in terms of real resources. When you're 0:22:47.240 --> 0:22:51.200 talking to either in academic circles or you're talking to 0:22:51.480 --> 0:22:54.639 policymakers that have to make these things, how do you 0:22:55.040 --> 0:23:02.879 think about gauging resource capacity? And avoid unwanted inflation. Well, 0:23:03.160 --> 0:23:06.040 you know you do it. I think you take a 0:23:06.359 --> 0:23:11.479 specific policy proposal. If you want to ramp up, you know, 0:23:11.520 --> 0:23:15.760 a major infrastructure spending program. Then you know, in the 0:23:15.800 --> 0:23:19.639 old days, somebody might do some sort of input output analysis. 0:23:20.119 --> 0:23:23.040 You you say, I want to do three trillion dollars 0:23:23.119 --> 0:23:26.920 of infrastructure. Okay, what is your infrastructure program include? While 0:23:26.960 --> 0:23:29.840 it includes some broadband and high speed rail, I want 0:23:29.840 --> 0:23:32.560 to build more community health centers. I want you know, 0:23:32.640 --> 0:23:34.240 you lay it out. This is what I want my 0:23:34.280 --> 0:23:36.679 infrastructure to do, solar panels and all this kind of stuff. 0:23:36.960 --> 0:23:39.560 So what are the real resources that you would need 0:23:39.880 --> 0:23:41.920 to carry out that program? And oh, by the way, 0:23:41.920 --> 0:23:44.440 how quickly do you want to spend three trillion dollars? 0:23:44.640 --> 0:23:47.520 Is it a five year program? Is a two year program? 0:23:47.560 --> 0:23:50.200 So you need a lot of information. And then you say, 0:23:50.359 --> 0:23:52.480 all right, so I know what I want to do. 0:23:52.720 --> 0:23:56.840 I know what I want to construct, build, you know whatever, 0:23:57.320 --> 0:23:59.240 And now what do I need to do it? How 0:23:59.320 --> 0:24:01.640 much steal, how much concrete, how many machines, how many 0:24:01.680 --> 0:24:05.480 workers I need? Construction workers, architects, engineers. You can actually 0:24:05.520 --> 0:24:08.840 get a sense of how readily available these things are 0:24:08.920 --> 0:24:12.480 because you know, we have measures like you know, unemployment 0:24:12.480 --> 0:24:15.840 by occupation, how many out of work construction workers are there? 0:24:15.840 --> 0:24:18.719 In engineers and architects, how much slack is there in 0:24:19.000 --> 0:24:22.520 manufacturing capacity. We know this stuff by you know, production 0:24:22.600 --> 0:24:27.320 and moving equipment and so forth. So it's an imperfect world. 0:24:27.400 --> 0:24:30.840 You're not going to know precisely what the actual number 0:24:30.840 --> 0:24:33.879 of people available to you are. You can get a 0:24:33.920 --> 0:24:38.440 pretty good sense of whether it is realistic to think 0:24:38.840 --> 0:24:42.120 of three trillion dollar infrastructure plan rolled out over two 0:24:42.200 --> 0:24:45.520 or three years, given the capacity that you have. You 0:24:45.600 --> 0:24:47.639 call Caterpillar and you say, if I were to place 0:24:47.680 --> 0:24:50.960 an order with you folks for you know, X dollars 0:24:51.000 --> 0:24:53.640 and this much equipment of this type, becauld you fill 0:24:53.680 --> 0:24:58.520 that order? They'll tell you. I have a slightly weird question, 0:24:58.600 --> 0:25:03.800 but I'm just curious, like in Washington, are there specific 0:25:03.920 --> 0:25:07.680 people or like, which politicians would you say have grasped 0:25:08.040 --> 0:25:12.520 the basics of MMT or are embracing mmt UM the 0:25:12.600 --> 0:25:18.800 most Well, you're not asking me the name name, Sorry, Tracy, Well, 0:25:18.880 --> 0:25:22.160 I I kind of I was hoping, but like, okay, 0:25:22.240 --> 0:25:24.560 let me rephrase it, Like, is there a body of 0:25:24.600 --> 0:25:28.000 politicians that are embracing it more than others. And like, 0:25:28.280 --> 0:25:30.520 I guess the obvious answer to that is the Democrats. 0:25:30.600 --> 0:25:34.200 But we're just getting to that policy debate. Like Republicans 0:25:34.200 --> 0:25:37.560 could easily embrace MMT as a reason to do tax cuts, 0:25:37.600 --> 0:25:40.280 as you mentioned, just as easily as Democrats could embrace 0:25:40.400 --> 0:25:43.240 MMT as a way to do you know, some sort 0:25:43.280 --> 0:25:46.200 of social spending or something like that. So I'm curious, 0:25:46.320 --> 0:25:50.000 is there is there an underlying like feature of politicians 0:25:50.040 --> 0:25:55.320 who are interested in MMT. Uh. Probably, but look, let's 0:25:55.440 --> 0:25:59.679 let's be very clear. Tax cutting taxes is in the GOP, 0:25:59.880 --> 0:26:03.640 d n A. They do not need MMT uh justify 0:26:03.760 --> 0:26:06.120 tax cuts. They have always done that. They've been doing 0:26:06.119 --> 0:26:10.879 it for decades, long before MMT existed. And uh, I 0:26:10.960 --> 0:26:13.520 mean the existence of m MT doesn't I don't think 0:26:13.560 --> 0:26:16.120 boost their enthusiasm for tax cuts in any way. They're 0:26:16.160 --> 0:26:18.480 going to do it no matter what if they get 0:26:18.520 --> 0:26:23.800 a chance. Um. Yeah, you know. I after the November election, 0:26:24.200 --> 0:26:29.240 when uh President Biden, when Biden became the nominee m 0:26:29.400 --> 0:26:33.159 the Congressional Progressive Caucus reached out and it is chaired 0:26:33.160 --> 0:26:38.160 by Congresswoman Promilagia Paul. She asked if I would address 0:26:38.200 --> 0:26:40.720 the caucus. Now there are I think a little over 0:26:40.760 --> 0:26:44.520 a hundred members of the CPC, and every Tuesday they 0:26:44.560 --> 0:26:48.040 do a call, and I was the first Tuesday call 0:26:48.359 --> 0:26:52.199 after the elections. So h that's just one example. I 0:26:52.240 --> 0:26:55.159 think there are some people. You know, I won't out people, 0:26:55.320 --> 0:26:59.040 but if somebody like Senator Brian schatt out people as 0:26:59.160 --> 0:27:03.119 mm tears, I won't. I won't talk about private conversations 0:27:03.520 --> 0:27:06.560 that I have. But you know, Brian Schatz, Senator shots 0:27:06.600 --> 0:27:09.639 from Hawaii, was out there tweeting about how much he 0:27:09.720 --> 0:27:12.320 was had enjoyed the book and how I think he's 0:27:12.359 --> 0:27:14.440 done interviews. In fact, I know he has. I read 0:27:14.480 --> 0:27:17.960 some of them where he talked about being on a 0:27:18.520 --> 0:27:21.440 Senate it's either banking or Finance committee, and he said, 0:27:21.440 --> 0:27:23.680 we're talking about it, you know, I'm talking about MMT 0:27:23.800 --> 0:27:26.480 We're thinking about this. I think there was a article 0:27:26.480 --> 0:27:28.360 in the New York Times two or three weeks ago 0:27:28.560 --> 0:27:32.159 that you know, disclose that I have been working in 0:27:32.200 --> 0:27:36.720 an advisory capacity with Senator Schumer's office and staff for 0:27:36.840 --> 0:27:39.679 a number of months. We had regular calls and I 0:27:39.680 --> 0:27:42.119 wouldn't have spoken publicly about that that they did, and 0:27:42.119 --> 0:27:44.399 it was in the Times, and I do this with 0:27:44.680 --> 0:27:48.480 lots and lots of House members, and I'm just I 0:27:48.520 --> 0:27:51.840 feel very, very lucky to be in a position now 0:27:51.880 --> 0:27:54.560 where so many people will reach out to me. Chairs 0:27:54.640 --> 0:27:58.119 of powerful committees in the House. You know, after the 0:27:58.160 --> 0:28:00.920 book was published, I one of them reached out and said, 0:28:00.920 --> 0:28:03.720 I've been a deficit hawk my entire time in Congress, 0:28:03.720 --> 0:28:07.040 and I read your book and you've completely changed my views. 0:28:07.080 --> 0:28:08.600 And he said, I want to know if we can 0:28:08.640 --> 0:28:12.520 start working together. So so, you know, Randy Ray worked 0:28:12.560 --> 0:28:17.040 with Senator Rubio and his staff on something I think 0:28:17.040 --> 0:28:19.639 a year and a half or so ago, I worked 0:28:19.680 --> 0:28:25.080 with very briefly. One Republican UH senator his staff reached 0:28:25.119 --> 0:28:29.640 out and wanted some input from me on the legislation 0:28:29.680 --> 0:28:32.719 they were drafting. Wanted to think about it from an 0:28:32.760 --> 0:28:37.600 MMT perspective, and I I was trying to be helpful there. Well, 0:28:37.600 --> 0:28:40.560 this this brings me to an interesting question. And you 0:28:40.640 --> 0:28:43.080 mentioned that someone reached out to you and said I 0:28:43.120 --> 0:28:46.239 used to be a deficit hawk and now I'm not, 0:28:46.640 --> 0:28:49.040 which gets to the question. It's like, and it kind 0:28:49.040 --> 0:28:51.920 of speaks to what you were saying earlier about MMT 0:28:52.120 --> 0:28:54.000 doesn't end the debate, but maybe it gets us to 0:28:54.040 --> 0:28:57.200 a healthier debate where we're actually talking about the real things. 0:28:57.400 --> 0:29:00.240 And there are of course going to be politicians who 0:29:00.360 --> 0:29:05.920 who say oppose expansion of government healthcare, but they don't 0:29:05.960 --> 0:29:07.600 really want to say and they say things like we 0:29:07.680 --> 0:29:09.320 can't afford it, or they say, you know, we're going 0:29:09.360 --> 0:29:11.160 to pass the costs onto our children, or we just 0:29:11.520 --> 0:29:14.320 the cupboard is bare, we can't do it. How many 0:29:14.480 --> 0:29:18.920 you know, in your experience deficit hawkery, how much is 0:29:18.960 --> 0:29:24.160 it actually people care about this gap between federal government 0:29:24.480 --> 0:29:29.360 tax receipts and outlays the technical deficit versus how much 0:29:29.400 --> 0:29:33.600 the deficit is cited as a pretext for opposing some 0:29:33.680 --> 0:29:40.360 policy that actually the person opposes for deeper ideological grounds. Yeah. 0:29:40.400 --> 0:29:44.280 I mean it's such a convenient um, you know, foil 0:29:44.640 --> 0:29:48.680 if if you can empathize with your constituents when they 0:29:48.720 --> 0:29:51.200 ask you, why aren't we doing more to you know, 0:29:51.840 --> 0:29:55.560 better fund our educational system or healthcare or whatever it is, 0:29:55.560 --> 0:29:58.400 and you can just say, listen, I I completely agree 0:29:58.400 --> 0:30:00.560 with you. I wish we could do these things too, 0:30:00.680 --> 0:30:03.280 but you know, we got this deficits, and we've got 0:30:03.280 --> 0:30:06.160 this you know, twenty three trillion dollar dead or whatever, 0:30:06.520 --> 0:30:08.520 and it's sort of a get out of jail free card. 0:30:08.600 --> 0:30:12.000 They don't have to offer much more by way of opposition, 0:30:12.080 --> 0:30:14.240 and to just you know, pat their pockets and say 0:30:14.400 --> 0:30:17.240 I wish I could help, but you know, obviously there's 0:30:17.280 --> 0:30:21.920 no money for that. I think that is useful um 0:30:22.120 --> 0:30:25.160 to a lot of people are perceived as being useful. 0:30:25.640 --> 0:30:28.560 Other people, I think, you know, would like to not 0:30:28.680 --> 0:30:31.080 have to lean into that narrative, but they don't see 0:30:31.120 --> 0:30:34.800 a clear pathway out. And that's what that visits that 0:30:34.840 --> 0:30:38.240 I mentioned early on, right before COVID really hit in 0:30:38.280 --> 0:30:40.480 the US, when I was on the hill. So much 0:30:40.480 --> 0:30:44.040 of what we talked about in that meeting was about messaging. 0:30:44.240 --> 0:30:47.920 It was about Democrats feeling like they had backed themselves 0:30:48.000 --> 0:30:52.200 into a corner for years, I coming back with these 0:30:52.240 --> 0:30:56.760 talking points, always bringing up the deficit, um hitting Republicans 0:30:56.800 --> 0:30:59.560 over the head for adding to the deficit, blowing out 0:30:59.600 --> 0:31:02.920 the national debt. They've said these things and now their 0:31:03.040 --> 0:31:05.640 views are changing and they don't know how to unsay them. 0:31:05.720 --> 0:31:09.000 And they've talked about the Clinton surpluses as this sort 0:31:09.000 --> 0:31:12.640 of badge of honor and tried to paint themselves as 0:31:12.680 --> 0:31:16.240 the party that holds themselves to a different and they 0:31:16.280 --> 0:31:19.360 think higher standard by being the party that wants to 0:31:19.360 --> 0:31:22.320 try to pay for their priorities and worry about the 0:31:22.360 --> 0:31:25.240 deficit and remind people that the last time the budget 0:31:25.280 --> 0:31:28.760 was balanced and in surplus, it was under Democratic leadership, right, 0:31:28.840 --> 0:31:32.320 President Clinton. And so they they're looking for ways to 0:31:32.440 --> 0:31:36.560 message their way out of that and into a new place. 0:31:36.600 --> 0:31:39.160 And that's what we spent a lot of time, uh 0:31:39.440 --> 0:31:44.280 talking about. Hm, that's an interesting point. I hadn't thought of. 0:31:44.320 --> 0:31:46.959 So we're so used to people using the deficit as 0:31:46.960 --> 0:31:49.160 an excuse not to do something. I hadn't thought of 0:31:49.200 --> 0:31:52.600 people using it as, you know, a sort of um 0:31:52.760 --> 0:31:56.080 badge of honor in that way. UM. I wanted to 0:31:56.120 --> 0:31:59.680 ask you about something else that's going on at the moment, 0:32:00.000 --> 0:32:03.720 which is we have seen a rise in bond yields 0:32:03.760 --> 0:32:07.480 and inflation expectations. And for some reason, I was looking 0:32:07.480 --> 0:32:11.520 at one very crude measure of inflation expectations earlier today. 0:32:11.560 --> 0:32:14.520 But for instance, if you look at Google trends, the 0:32:14.560 --> 0:32:18.840 word inflation is being searched for um more than ever 0:32:19.240 --> 0:32:21.440 um or at least in the history of Google trends. 0:32:21.480 --> 0:32:24.240 And I know you're on the record saying that m 0:32:24.360 --> 0:32:29.120 m T S overriding concern is inflation risk. I also 0:32:29.200 --> 0:32:32.160 know that you get a question about inflation every time 0:32:32.200 --> 0:32:34.880 you do this, but I would love to hear your 0:32:34.960 --> 0:32:37.760 take on on what's going on now in the bond 0:32:37.800 --> 0:32:42.840 market and how much that ties into this embrace of 0:32:43.400 --> 0:32:46.080 fiscal policy in d C, Like, how much has that 0:32:46.120 --> 0:32:50.640 actually impacted inflation expectations in your opinion? Yeah, I mean, 0:32:51.160 --> 0:32:53.240 Joe has written about this in a way that I 0:32:53.280 --> 0:32:57.720 think is is really useful and largely reflective of the 0:32:57.760 --> 0:33:00.880 way that I think about this. Uh. You know, anybody 0:33:00.920 --> 0:33:04.000 can look at the kind of backup in yields and 0:33:04.000 --> 0:33:07.400 and create a narrative that fits whatever it is that 0:33:07.480 --> 0:33:10.840 they're looking to defend with respect to what's happening. You know, 0:33:11.400 --> 0:33:15.120 I think that, um, it makes a lot of sense 0:33:15.160 --> 0:33:18.480 to me to say that, you know, no, nobody can 0:33:18.680 --> 0:33:22.080 really tease out inflation expectations, as you said, we can 0:33:22.080 --> 0:33:24.080 come up with these sort of crude ways of trying 0:33:24.120 --> 0:33:27.360 to get at what's happening here. But you know, Chasey, 0:33:27.440 --> 0:33:30.280 I guess my sense is that mostly, you know, this 0:33:30.360 --> 0:33:33.800 is a fairly modest move up, and that what is 0:33:33.840 --> 0:33:37.920 probably telling us is that, you know, people are expecting 0:33:38.240 --> 0:33:42.360 the economy to do better, and that they think that 0:33:42.400 --> 0:33:45.040 the FED might have to move sooner, and they think 0:33:45.120 --> 0:33:49.320 that inflation is going to move higher. And I think that, 0:33:49.560 --> 0:33:52.080 you know, when Powell comes out and tells us that 0:33:52.440 --> 0:33:57.120 the FED fully anticipates that we could see some you know, 0:33:57.320 --> 0:34:01.720 pressures over the summer as the stimulant or the recovery 0:34:02.000 --> 0:34:05.840 of money rolls out and so forth, that they're prepared 0:34:05.880 --> 0:34:08.440 for that they expected to be transitory. Maybe there are 0:34:08.440 --> 0:34:12.280 some people out there who have, you know, different expectations 0:34:12.320 --> 0:34:14.080 and think that the FED might follow a little bit 0:34:14.120 --> 0:34:16.799 behind the curve and have to move sooner. You know. 0:34:16.960 --> 0:34:21.880 I think I think by and large it reflects UH 0:34:22.360 --> 0:34:27.840 optimism and enthusiasm for the economic outlook. What do you 0:34:27.880 --> 0:34:32.200 think about this new FED? I mean, obviously MMT emphasizes, 0:34:32.280 --> 0:34:36.000 of course, fiscal fiscal power as the sort of key 0:34:36.080 --> 0:34:39.440 lever for macro stabilizations we've been talking about. But this 0:34:39.480 --> 0:34:43.239 does seem to be a FED that's undergone changes and 0:34:43.280 --> 0:34:45.839 how it thinks and how it thinks about measuring full 0:34:45.960 --> 0:34:49.720 capacity and full employment and whether it needs to preempt 0:34:49.800 --> 0:34:53.160 inflation lest it sort of get away from us. What's 0:34:53.160 --> 0:34:55.040 you're thinking on this sort of like evolution of the 0:34:55.040 --> 0:34:59.120 FED under sort of the yelling um Powell period. Well, 0:34:59.160 --> 0:35:01.360 I think that, you know, in a lot of ways, 0:35:01.400 --> 0:35:06.640 the FED has become somewhat more humble in the sense 0:35:06.760 --> 0:35:10.080 that you know, they're Jerome Powell made a very clear 0:35:10.200 --> 0:35:12.840 time and time again. I think he used virtually every 0:35:13.600 --> 0:35:18.760 opportunity when he spoke publicly to say, we don't have this, Okay, 0:35:18.880 --> 0:35:23.040 do not expect the central bank to have the ammunition 0:35:23.080 --> 0:35:27.799 that's going to be necessary to get a sustainable recovery underway, 0:35:27.840 --> 0:35:30.840 that it is going to take uh, fiscal policy. We 0:35:30.880 --> 0:35:34.960 need a partner. And that was different, right Bernankee sort 0:35:35.000 --> 0:35:38.120 of did that, but in much more subtle ways. I 0:35:38.160 --> 0:35:40.920 think that and it's not just Powe, it's it's central 0:35:40.960 --> 0:35:44.040 bankers around the world, and now, helped by you know, 0:35:44.080 --> 0:35:45.920 institutions like the I M F and the O E 0:35:46.000 --> 0:35:48.920 c D. You know, everybody is sort of coming to 0:35:49.440 --> 0:35:53.360 agreement around this idea that fiscal policy has to play 0:35:53.360 --> 0:35:59.319 a dominant role in the in the recovery so on inflation. 0:35:59.520 --> 0:36:03.560 You know, Powell had to admit that the FED might 0:36:03.600 --> 0:36:08.040 have tightened preemptively that you know, unemployment, it clearly was 0:36:08.080 --> 0:36:12.840 possible for unemployment to safely move lower without causing inflation 0:36:12.880 --> 0:36:15.680 to move higher. And I think they're doing a lot 0:36:15.760 --> 0:36:19.080 of rethinking, you know, some of their own understanding. You 0:36:19.160 --> 0:36:22.120 have people like Daniel Tarullo, who once served on the 0:36:22.120 --> 0:36:26.000 FED Board of Governors, who after his term expired, went 0:36:26.000 --> 0:36:28.920 out and started stating publicly that the FED does not 0:36:29.080 --> 0:36:32.000 have a reliable model of inflation. Now that was a 0:36:32.239 --> 0:36:36.680 really incredible thing to say, and so it's it's a 0:36:36.680 --> 0:36:39.359 good sign when you know what you don't know and 0:36:39.400 --> 0:36:44.000 you're willing to go back to the drawing board and rethink, 0:36:44.160 --> 0:36:46.520 you know a lot of your priors and what the 0:36:46.520 --> 0:36:49.399 FED can do. And Powell keeps reminding us the FED 0:36:49.440 --> 0:36:52.799 can lend, but the FED can't spend. And so I 0:36:52.840 --> 0:36:56.120 think it's helping to shift us into a sort of 0:36:56.200 --> 0:36:58.839 new paradigm where we are going to see a more 0:36:58.920 --> 0:37:03.839 permanent role uh from you know, the fiscal partner, and 0:37:04.320 --> 0:37:07.319 much less reliance on central banks. And I think that's 0:37:07.360 --> 0:37:09.759 to the benefit. Um. We have asked central banks for 0:37:09.960 --> 0:37:13.800 too long to do too much and and in many ways, 0:37:13.840 --> 0:37:16.200 I think you know, we're we've paid the price for that. 0:37:16.320 --> 0:37:19.759 With central banks just constantly, you know, getting more and 0:37:19.800 --> 0:37:22.839 more creative, pushing interest rates lower and lower. The only 0:37:23.239 --> 0:37:25.280 thing they know how to do is try to engineer 0:37:25.400 --> 0:37:29.040 growth via some kind of run up in in asset prices, 0:37:29.040 --> 0:37:51.120 whether it's real estate, commercial, residential equities. So you mentioned 0:37:51.200 --> 0:37:53.839 like knowing what you don't know there, and I think 0:37:54.080 --> 0:37:57.160 like it is probably fair to say that MMT is 0:37:57.280 --> 0:38:01.759 still in um sort of testing mode, like this is 0:38:01.800 --> 0:38:05.680 probably this is we're seeing the beginnings of this embrace 0:38:05.920 --> 0:38:08.439 as we've been discussing, and we're going to see more 0:38:08.680 --> 0:38:11.359 fiscal programs rolled out in the States, and we're going 0:38:11.400 --> 0:38:13.560 to get an actual test case of some of these 0:38:13.600 --> 0:38:18.600 theories being put into action. What would it take to 0:38:19.040 --> 0:38:24.759 like give you pause, Like what would actually make you 0:38:24.800 --> 0:38:28.360 think like, oh wait, maybe there's something in mm T 0:38:29.080 --> 0:38:32.879 that we you know, got wrong, or maybe there's something 0:38:32.880 --> 0:38:36.360 that we underestimated, something that we need to rethink or 0:38:36.440 --> 0:38:39.640 tweak or revamp. Is there a specific thing that you're 0:38:39.680 --> 0:38:45.160 watching out for, Well, yeah, I think so much. Again, 0:38:45.280 --> 0:38:48.200 so much of mm T is descriptive tracy. Like, right, 0:38:48.560 --> 0:38:54.239 if if Congress wants to pass big and big spending packages, 0:38:54.320 --> 0:38:56.000 they can do it, and this is what we said. 0:38:56.040 --> 0:39:00.680 You know what's interesting for me actually is think back 0:39:00.719 --> 0:39:05.560 to the Republican tax cuts. In the Republicans were getting 0:39:05.600 --> 0:39:08.719 ready to push through these massive tax cuts, and you 0:39:08.840 --> 0:39:14.799 had economists, I won't name them, but they were leading names, right, 0:39:14.840 --> 0:39:18.520 big name economists who came out in opposition to the 0:39:18.560 --> 0:39:21.920 tax cuts, and one of them made the argument that 0:39:22.080 --> 0:39:26.279 if the Republicans are successful in pushing these tax cuts through, 0:39:26.760 --> 0:39:29.080 that we will be these were his words, living on 0:39:29.120 --> 0:39:33.040 a shoe string for decades to come because of the 0:39:33.080 --> 0:39:36.160 deficits that will be created. Because of the deficits, he 0:39:36.200 --> 0:39:39.319 went on to say that it would put us at 0:39:39.440 --> 0:39:42.680 risk because if the economy were to slow down and 0:39:42.719 --> 0:39:45.799 go into recession, that we would no longer have the 0:39:45.840 --> 0:39:51.040 capacity to use fiscal policy to counter the recession because 0:39:51.320 --> 0:39:53.680 what we had done these tax cuts, that left us 0:39:53.760 --> 0:39:58.200 unable to do to act with fiscal policy. Another leading 0:39:58.320 --> 0:40:02.280 top economists was right ing, you know, deficits matter again. 0:40:03.320 --> 0:40:06.760 After Donald Trump took took office and so forth, warning 0:40:06.960 --> 0:40:10.040 that if if you tried to do anything with fiscal 0:40:10.640 --> 0:40:14.400 um in terms of stimulus, that you would be pushing 0:40:14.440 --> 0:40:17.080 interest rates higher, that you would get crowding out effects, 0:40:17.160 --> 0:40:20.640 that the economy would slow down. Now the Republicans passed 0:40:20.640 --> 0:40:24.719 their tax cuts, and unemployment went down, not up, and 0:40:24.880 --> 0:40:27.000 growth went up a little bit. I mean, it wasn't 0:40:27.000 --> 0:40:30.680 a massive boon that was promised, but it was stimulative 0:40:30.719 --> 0:40:34.640 and it did improve things. Uh. And interest rates didn't 0:40:34.640 --> 0:40:38.320 go up. Interest rates have trended down. We had coronavirus, 0:40:38.400 --> 0:40:41.799 we had a recession. And how did Congress respond with 0:40:41.960 --> 0:40:46.360 multi trillion dollar packages one after another. The deficits of 0:40:46.400 --> 0:40:49.920 the past did not impede the ability of Congress to 0:40:50.320 --> 0:40:55.160 respond effectively, uh in the future, So that those folks 0:40:55.160 --> 0:40:57.880 were just simply wrong. And so you know, when you 0:40:57.920 --> 0:41:02.920 ask um, what would cause me to rethink, you know, 0:41:03.080 --> 0:41:06.560 my the strength of my convictions, I guess it would 0:41:06.560 --> 0:41:10.200 be if Congress had authorized uh, you know, multi trillion 0:41:10.200 --> 0:41:14.960 dollars spending package and somehow the checks bounced, you know, 0:41:15.120 --> 0:41:20.080 I mean, I'm serious, you know, because we're only explaining 0:41:20.200 --> 0:41:22.880 that if the votes are there, the money is there. 0:41:23.160 --> 0:41:26.680 And this idea that somehow, you know, there are these 0:41:26.680 --> 0:41:30.759 fiscal constraints or somehow you've got to arrange the financing 0:41:30.760 --> 0:41:33.799 and you might not be able to uh, something might 0:41:33.840 --> 0:41:36.920 go haywire, and all of a sudden, you know that 0:41:37.080 --> 0:41:39.520 the checks don't go out and it just doesn't happen. 0:41:40.480 --> 0:41:43.000 I think, first of all, I think that last point 0:41:43.600 --> 0:41:46.640 or the point that you made about the COVID crisis, 0:41:47.040 --> 0:41:49.480 showing the myth of like oh, we need to like 0:41:49.520 --> 0:41:52.200 save up our fiscal capacity is really interesting and probably 0:41:52.239 --> 0:41:55.120 still underappreciated, because I do think there's still this sort 0:41:55.120 --> 0:41:57.319 of like, oh, it's so unfortunate that we spent so 0:41:57.400 --> 0:42:00.600 much during the good times, and then in instant that 0:42:00.719 --> 0:42:03.680 talking point seems to have gotten disproven because then we 0:42:03.760 --> 0:42:08.239 spent a lot more without without a hiccup. I like 0:42:08.360 --> 0:42:10.359 to do like a sort of like quick lightning round 0:42:10.560 --> 0:42:14.640 of like common m m T questions before we end. 0:42:15.440 --> 0:42:17.440 You know, I always see these questions about MMT, and 0:42:17.480 --> 0:42:19.440 I want to like sort of like get the Stephanie 0:42:19.520 --> 0:42:22.960 Kelton the quick answer. So if we don't need to 0:42:22.960 --> 0:42:24.799 worry about devisits, why do we have taxes, why do 0:42:24.800 --> 0:42:27.120 we need to pay taxes? Well, you know, I'll just 0:42:27.239 --> 0:42:33.200 point you to uh six article written by Beardsley Rummel, 0:42:33.280 --> 0:42:36.640 which is a great name, who was the chair then 0:42:36.800 --> 0:42:39.440 called Chairman of the New York Federal Reserve Bank. This 0:42:39.520 --> 0:42:43.560 is not a short answer, Joe, that's all right. Um. 0:42:43.680 --> 0:42:46.760 Rummel gave us a variety of answers to that question. 0:42:46.800 --> 0:42:49.760 Why do we have taxes? Taxes are important because taxes 0:42:49.800 --> 0:42:54.960 are forced subtraction. Taxes remove dollars from our hands so 0:42:55.000 --> 0:42:57.239 that we don't have them, so that we can't spend them, 0:42:57.360 --> 0:43:00.840 so that the government can spend some of its dollars 0:43:00.880 --> 0:43:05.000 into the economy without creating an inflation problem. So tax 0:43:05.000 --> 0:43:08.080 has helped to remove spending power from the rest of 0:43:08.200 --> 0:43:12.040 us and mitigate inflationary pressures. Taxes are important if you 0:43:12.040 --> 0:43:14.759 want to start up a currency from scratch. And that's 0:43:14.760 --> 0:43:17.399 a much longer answer, but I'll just leave it with 0:43:17.719 --> 0:43:21.400 Taxes are the currency is is it is a tax credit. 0:43:21.840 --> 0:43:25.280 Taxes are important for redistribution. You might raise or lower 0:43:25.280 --> 0:43:27.680 in existing tax or introduce a new tax because you 0:43:27.719 --> 0:43:30.160 care about things like the distribution of wealth and income, 0:43:30.640 --> 0:43:33.960 and you can use taxes for that purpose. You have 0:43:34.080 --> 0:43:38.880 taxes because you want to incentivize or disincentivize certain behaviors. 0:43:38.880 --> 0:43:42.120 So taxes are very useful if you're trying to encourage 0:43:42.120 --> 0:43:45.600 people to buy energy efficient appliances or electric vehicles or 0:43:45.640 --> 0:43:50.160 discourage people from smoking or um, you know, polluting the atmosphere. 0:43:51.040 --> 0:43:54.120 All right, here's another question. Um, if the government isn't 0:43:54.120 --> 0:43:57.960 really borrowing, why do we need to have a bond market. Well, 0:43:58.000 --> 0:44:00.920 we don't technically need to have a on market, but 0:44:01.960 --> 0:44:06.080 the government has chosen to allow folks to trade their 0:44:06.120 --> 0:44:10.920 dollars in for interests sparing form of the US dollar, 0:44:11.160 --> 0:44:14.240 which is a government bond. So it's a very safe 0:44:14.239 --> 0:44:16.400 way to park on an awful lot of money in 0:44:16.440 --> 0:44:21.280 a default risk free asset that gives you a yield, 0:44:21.320 --> 0:44:24.200 that gives you a return. So you get to a 0:44:24.200 --> 0:44:26.560 little bit of an interest subsidy from the federal government 0:44:26.600 --> 0:44:30.560 when you hold US treasuries. All right, here's another one. 0:44:31.000 --> 0:44:33.680 Is it naive if the mm T view is that 0:44:33.760 --> 0:44:37.080 the way to fight inflation is either through taxes or 0:44:37.120 --> 0:44:42.040 perhaps spending or cutting spending, or at least that's one tool. 0:44:42.440 --> 0:44:45.040 Is it naive to think that politicians would ever actually 0:44:45.080 --> 0:44:48.319 sort of quote, do what it takes if inflation did 0:44:48.560 --> 0:44:51.440 run overly hot. Well, I think the first thing to 0:44:51.480 --> 0:44:53.919 do is challenge the first part of the question, that 0:44:54.760 --> 0:44:57.920 it is not the solution to any and all inflation 0:44:58.040 --> 0:45:01.080 is most definitely not to raise taxes. And what MMT 0:45:01.239 --> 0:45:03.799 is trying to do is to say, if we're talking 0:45:03.800 --> 0:45:06.200 about the kind of inflation that results from too much 0:45:06.239 --> 0:45:09.360 spending chasing too few goods, the demand pull kind of inflation, 0:45:09.840 --> 0:45:14.160 then let's integrate inflation risk into the federal budgeting process. 0:45:14.520 --> 0:45:17.640 So the best way to fight inflation is with a 0:45:17.640 --> 0:45:20.520 good offense, right. You don't want to create an inflation 0:45:20.560 --> 0:45:22.399 problem and then try to fight it on the back 0:45:22.520 --> 0:45:27.400 end once it exists. You want lawmakers to be designing 0:45:27.400 --> 0:45:31.640 the legislation, writing the legislation with inflation in mind, which, 0:45:31.680 --> 0:45:34.320 by the way, they do not do today. I worked 0:45:34.320 --> 0:45:36.319 in the Senate. I never heard a staffer or a 0:45:36.360 --> 0:45:42.520 member of the Senate raise inflation as even an afterthought 0:45:42.600 --> 0:45:46.919 when writing multi trillion dollar spending bills. So we want 0:45:47.040 --> 0:45:50.520 inflation to be integrated into the process. So that you're thinking, 0:45:51.000 --> 0:45:54.200 if I were to do this, uh, you know, proposed 0:45:54.200 --> 0:45:57.040 new spending, what is the likelihood that it would create 0:45:57.080 --> 0:45:59.920 inflationary pressures? And how do I mitigate those in the 0:46:00.080 --> 0:46:03.359 legislation before moving forward with a vote. And now I'll 0:46:03.400 --> 0:46:07.480 just ask the Tracy Alloway question. Is an mm T 0:46:08.480 --> 0:46:11.120 just a thing that only works for the U S 0:46:11.160 --> 0:46:13.880 Dollar at the US Well, no, I mean one of 0:46:13.880 --> 0:46:17.520 the running jokes I think on Twitter is Japan says Hi. 0:46:18.239 --> 0:46:21.600 And so you know, so many times people will, um, 0:46:22.200 --> 0:46:25.160 you know, say, if you run these deficits or you 0:46:25.200 --> 0:46:27.000 get the debt way up, interest rates are going to 0:46:27.040 --> 0:46:28.520 go up, inflation is going to go up, and somebody 0:46:28.520 --> 0:46:31.880 will tweet Japan says Hi. Uh so no okay, but 0:46:31.920 --> 0:46:35.120 you know, e M okay Japan. Yeah, they're kind of weird. 0:46:35.239 --> 0:46:40.200 They don't have whatever. What about Egypt, Well, look, you 0:46:40.360 --> 0:46:45.120 can economists like Scott Fullweiler and fiddle Kaboob and others 0:46:45.160 --> 0:46:48.040 are working with e m s and working with you know, 0:46:48.080 --> 0:46:50.640 and I've I've worked I don't know that I should say, 0:46:51.320 --> 0:46:55.399 I'll just say one developing country president and I've I've 0:46:55.440 --> 0:46:59.040 worked with him. And so we're we're very much involved 0:46:59.239 --> 0:47:03.600 in work king in collaboration with UM with governments around 0:47:03.600 --> 0:47:07.800 the world, including in emerging markets. MMT is absolutely helpful 0:47:07.840 --> 0:47:09.960 and the work of photo Kabuba I will say again, 0:47:10.400 --> 0:47:14.279 UM check that out for sure, uh MMT as we've 0:47:14.320 --> 0:47:18.279 actually had them on and so you know, you know 0:47:18.520 --> 0:47:21.799 that that MMT can be helpful in all of these countries. Now, 0:47:21.960 --> 0:47:24.560 it is true, and Tracy knows this. I I know 0:47:24.719 --> 0:47:27.719 she does that. Uh. I mean that MMT is not 0:47:27.880 --> 0:47:31.600 suggesting that every country has, you know, the sort of 0:47:31.680 --> 0:47:35.640 expanded policy space that will allow it to easily orient 0:47:35.840 --> 0:47:39.319 its macro economic policies around, you know, creating a full 0:47:39.320 --> 0:47:43.040 employment economy. There are challenges for many countries that have 0:47:43.440 --> 0:47:46.680 debt denominated in foreign currency, that are more vulnerable to 0:47:46.800 --> 0:47:49.239 swings in their exchange rates, that don't have energy and 0:47:49.280 --> 0:47:52.440 food sovereignty and so forth. So, but that's not to 0:47:52.480 --> 0:47:54.960 say that m MT doesn't have anything to offer by 0:47:55.040 --> 0:47:59.920 way of policy advice and design and so forth. Stephan 0:48:00.000 --> 0:48:03.000 and Calton, thank you so much for coming out odd Luck. 0:48:03.520 --> 0:48:05.320 It was great to be back with you both. Thanks 0:48:05.320 --> 0:48:07.480 for having me, Stephanie. That was great. Stephan I really 0:48:07.520 --> 0:48:24.080 appreciate it. Take care of you guys. Tracy. Obviously I 0:48:24.120 --> 0:48:28.000 like that conversation a lot. Hearing that sort of trajectory, Yeah, 0:48:28.200 --> 0:48:30.920 I know, kind of obvious. Hearing the like the story 0:48:30.960 --> 0:48:34.040 of like that trajectory of like going from like blogging 0:48:34.120 --> 0:48:36.480 to being invited in to talk to some of the 0:48:36.520 --> 0:48:41.279 most powerful UM people in the world about ideas is 0:48:41.440 --> 0:48:45.520 about is to me is about inspiring a story as again, Yeah, 0:48:45.600 --> 0:48:49.360 I mean it's definitely been an upwards trajectory, like the 0:48:49.520 --> 0:48:52.920 arrow has moved in the right direction for MMT economists 0:48:53.200 --> 0:48:56.880 and journalists of course, Joe um So, one thing that 0:48:56.920 --> 0:48:59.480 always stands out when we speak to Stephanie, like her 0:48:59.520 --> 0:49:03.120 point about MMT being a set of descriptive rather than 0:49:03.280 --> 0:49:08.280 prescriptive policies, Like I think, obviously she's right because she's 0:49:08.360 --> 0:49:11.640 sort of come up with it, But like my question 0:49:11.719 --> 0:49:15.359 is still how much does that actually change and if 0:49:15.400 --> 0:49:19.800 it changes the debate or if it allows us to 0:49:19.840 --> 0:49:25.160 avoid wasting time on irrelevant discussions like can we actually 0:49:25.200 --> 0:49:30.520 afford it? Like how much does that actually move the needle? 0:49:30.760 --> 0:49:33.600 And I guess like, is there is there going to 0:49:33.680 --> 0:49:36.439 be a time five or ten years from now when 0:49:36.520 --> 0:49:39.759 instead of politicians going like, oh but the deficit, we 0:49:39.840 --> 0:49:42.160 can't afford this, what if they're going like, oh but 0:49:42.280 --> 0:49:46.880 you know, inflation and fiscal space and I it feels 0:49:46.880 --> 0:49:49.480 like they could use pretty much anything like as an 0:49:49.520 --> 0:49:52.920 excuse or as a justifier for something. Yeah, I mean 0:49:52.920 --> 0:49:55.480 I would saying like, my my sense is like two things, 0:49:55.719 --> 0:49:58.520 and one is it does seem like a little harder. 0:49:58.560 --> 0:50:00.719 I mean, I don't know. I mean, one thing that 0:50:00.719 --> 0:50:04.040 we know about fighting about or talking about inflation online 0:50:04.239 --> 0:50:07.800 is that people will see it even if it's not there, right, 0:50:07.840 --> 0:50:11.320 So it's like the inflation measures can come in very mild, 0:50:11.360 --> 0:50:14.799 but people will convince themselves that we're living in an 0:50:14.840 --> 0:50:18.440 age of hyper inflation regardless. So I do think like 0:50:18.480 --> 0:50:20.640 that is a good point. In the other hand, maybe 0:50:20.719 --> 0:50:23.200 it's like not quite as like you know, it's like 0:50:23.560 --> 0:50:27.279 the bond vigilantees or the kids are gonna have to 0:50:27.320 --> 0:50:29.200 pay for it and we're gonna become Greece one day. 0:50:29.360 --> 0:50:33.080 It's like you can never disprove that, right, Like it's like, 0:50:33.120 --> 0:50:34.920 well we have to you know, something may happen ten 0:50:35.000 --> 0:50:36.560 years from now. It has been really bad, so we 0:50:36.600 --> 0:50:38.680 have to do this. So I think it's a little harder. 0:50:38.719 --> 0:50:42.359 But I do think also like you know, there are 0:50:42.400 --> 0:50:46.600 just people are going to have different policy priorities, and 0:50:46.680 --> 0:50:48.560 there are you know, there are a lot of people 0:50:49.239 --> 0:50:51.680 who believe that the government should have some sort of 0:50:51.719 --> 0:50:53.600 single payer healthcare, and there are a lot of people 0:50:53.600 --> 0:50:56.799 who strongly don't think that and that that's bad and 0:50:56.840 --> 0:51:00.439 that socialism and I don't think that like, um, that's 0:51:00.440 --> 0:51:02.360 never gonna go away, like people that are gonna just 0:51:02.400 --> 0:51:05.839 be But it does feel like at least we can 0:51:05.960 --> 0:51:08.720 sort of like move past some of the deficit stuff. 0:51:08.960 --> 0:51:12.239 It is a more honest political conversation that we can have. 0:51:12.320 --> 0:51:17.520 On some level, I feel like the problem is forever politics. 0:51:17.600 --> 0:51:20.320 I think like that's the conclusion to everything that's wrong 0:51:20.480 --> 0:51:24.200 in the world, Like the problem is politics always and forever. Yeah, 0:51:25.040 --> 0:51:28.239 but man is a political animal and so yeah, so 0:51:28.320 --> 0:51:30.920 that will be for thousands of years we will be 0:51:30.960 --> 0:51:34.360 fighting about how different people feel that they should reshape 0:51:34.400 --> 0:51:36.920 the world. Right, And to be fair, we're probably asking 0:51:36.960 --> 0:51:39.720 a lot of an economic theory to try to fix 0:51:39.800 --> 0:51:44.040 that problem. Like that's probably a little bit too ambitious. 0:51:45.040 --> 0:51:47.040 But again, and it goes back to what we were saying, 0:51:47.080 --> 0:51:51.200 like it does feel like the debate these days. I 0:51:51.800 --> 0:51:54.600 I think it's it's a little bit more enlightened than 0:51:54.640 --> 0:51:58.239 it was in two thousand nine, in two thousand ten, 0:51:58.640 --> 0:52:01.160 so like things do change. And again, it's not I'm 0:52:01.160 --> 0:52:03.000 not saying it because like, Okay, we got this like 0:52:03.040 --> 0:52:06.040 fiscal expansion and that's good or bad. But it does 0:52:06.080 --> 0:52:09.160 feel like the parameters of the debate, so you look 0:52:09.160 --> 0:52:13.160 at even critics of the of the stimulus. They're talking 0:52:13.280 --> 0:52:17.759 about these things like inflation and inflationary pressures and capacity 0:52:17.880 --> 0:52:21.719 and how do you measure fiscal capacity or inflationary capacity, 0:52:21.840 --> 0:52:24.520 which wasn't really even like part of the discussion in 0:52:24.560 --> 0:52:28.640 a meaningful way, you know, like two thousand nine tended 0:52:28.680 --> 0:52:32.400 anywhere near the same level. So maybe maybe things the 0:52:32.480 --> 0:52:37.759 language has certainly changed. Absolutely, All right, um, shall we 0:52:37.840 --> 0:52:41.000 leave it there. Let's leave it there. This has been 0:52:41.080 --> 0:52:44.560 another episode of the All Thoughts podcast. I'm Tracy Allawait. 0:52:44.640 --> 0:52:48.120 You can follow me on Twitter at Tracy Allaway and 0:52:48.160 --> 0:52:51.279 I'm Joe Wisn'tal. You can follow me on Twitter at 0:52:51.320 --> 0:52:54.720 the Stalwart, and be sure to follow our guest Stephanie Kelton. 0:52:54.800 --> 0:52:57.919 She's at Stephanie Kelton. The paperback version of her book 0:52:57.920 --> 0:53:01.040 The Deficit Myth now out. Check that out as well. 0:53:01.560 --> 0:53:05.240 Follow our producer Laura Carlson, She's at Laura M. Carlson. 0:53:05.560 --> 0:53:09.360 Follow the Bloomberg head of podcast, Francesco Levi at Francesco Today, 0:53:09.800 --> 0:53:12.879 and check out all of our podcasts at Bloomberg under 0:53:12.920 --> 0:53:15.520 the handle and podcasts. Thanks for listening.