Stephanie Kelton Profile picture
Author of NYT Bestseller https://t.co/DVWlRrB2YD 📖 Professor @stonybrooku 👩🏼‍🏫 https://t.co/MpupqQVNl1
Pensive™ & @PensiveTM@mastodon.social 💔💚 Profile picture David Sandler Profile picture Geoff Ginter Profile picture Mark Flowerchild #MMT #RealProgressives Profile picture Wmholt Profile picture 30 subscribed
Mar 24 10 tweets 2 min read
Sorting through materials for my next book and stumbled on this piece outlining the influence of MMT in Chinese policymaking circles. 1/ bloomberg.com/news/articles/… "Modern Monetary Theory can inspire China to make sure central bank easing supports government spending, several prominent economists said, as Beijing turns to fiscal policy to boost economic growth." 2/
Jan 10 6 tweets 2 min read
🧵
Gov spends $100 (G)
Non-gov sector now has $100
Gov taxes $90 (T)
(G-T) = gov deficit = $10
Deficit has added $10 to non-gov
Treasury sells $10 gov bonds
Non-gov swaps $10 for $10 bonds
NET RESULT: $10 increase in net financial assets to the non-gov sector (w/ or w/o bonds) 1/ Image Without the bond sale, the $10 would stay in bank reserve accounts at the Fed, where it would earn whatever the Fed chooses to pay on overnight reserve balances (IOR). 2/
Jan 3 6 tweets 2 min read
$34 trillion!!! 😱 Run for the caves!

People have been writing versions of this article for the last 75+ years. It’s actually rather embarrassing.
1/nytimes.com/2024/01/02/bri… Here’s a political cartoon from 1937, when the (so-called) national debt reached $36B. 2/ Image
Sep 10, 2023 11 tweets 3 min read
🧵 5 Myths that Deserve Straightening Out

via Paul Sheard, former vice chairman of S&P Global. 1/10 bloomberg.com/news/articles/… "The first is that the government has to borrow in order to spend and run deficits. It’s the other way around...'raising revenue' is just a cover story." 2/10 Image
Aug 21, 2023 11 tweets 4 min read
Just saw this announcement from the Clinton Global Initiative, touting a competition to raise "awareness about creating a sustainable fiscal future." It is worth remembering ..... 1/ Image That Bill Clinton was the last POTUS to preside over a fiscal surplus. It is also worth remembering why those surpluses weren't sustainable. Pay close attention to the dates as you look at each slide. The fiscal surplus appears in 1998. 2/ Image
Aug 19, 2023 11 tweets 3 min read
Interest Rates and Fiscal Sustainability
"The orthodox conception of fiscal sustainability demonstrates a fundamentally flawed understanding of the interactions of the Fed, the Treasury, and private financial institutions within the U. S. financial system" papers.ssrn.com/sol3/papers.cf… The paper is full of insights (and policy implications) that are worth your time if you want to understand key differences between MMT and mainstream macro. Image
Aug 10, 2023 8 tweets 2 min read
via James Galbraith (Aug 9, 2023)
"Back in 2021 and early 2022, a posse of prominent economists...all of Harvard...[argued] that inflation, fueled by federal spending, would prove “persistent"... 1/ But...inflation peaked on its own in mid-2022 (owing partly to sales from the US Strategic Petroleum Reserve). There was no persistence, no surge from the 2021 fiscal stimulus, and no wage-driven inflation from low unemployment... 2/
May 26, 2023 15 tweets 5 min read
With notable exceptions, coverage of the debt ceiling debacle has been incomplete (at best) and dishonest (at worst). 1/ Let's start with the basics. The executive branch is bound--under the Constitution--to spend when Congress says spend. The law requires the president/Treasury to honor its spending obligations. The president and Treasury Secretary have taken an oath to uphold the Constitution. 2/
May 24, 2023 4 tweets 2 min read
I call it covert monetary financing:
"the federal [government] can essentially finance ANY amount of DEFICIT that they want merely BY PRINTING BONDS and making sure they sell in the market ... and WE ARE INVOLVED IN THAT FINANCING OF THE FEDERAL BUDGET." ~Alan Greenspan LINK
May 18, 2023 8 tweets 3 min read
This resonated with a lot of people. 1M views in less than 24 hours. Some (a minority) of you said it was just Trump talking "crazy." But this is really very basic stuff. Let's see who else agrees... 1/ "We will pay our debts in the end. It's not like if we don't pay we can't pay. We've got the right to print our own money. That's the key." ~Warren Buffet
2/
youtube.com/clip/UgkxMFXsW…
May 3, 2023 7 tweets 2 min read
The "debt" limit was never intended to serve as a brake on spending. As @rohangrey explains in this law journal article, the original purpose was to make it easier for the executive branch to carry out the payments that had been authorized by Congress. 1/ rohangrey.net/files/coinage.… Think of the "debt" ceiling as a cap on the number of certain kinds of instruments (those subject to the limit) that Congress wants the US Treasury to use to facilitate the spending that Congress has authorized. 2/
Feb 9, 2023 9 tweets 3 min read
🧵
As the debate over Social Security and Medicare heats up, there's a name you need to know.

Robert Eisner Who was he?

Robert Solow, a Nobel laureate in economics at the Massachusetts Institute of Technology, said: ''Mr. Eisner was fearless. He never softened his language to ingratiate. Yet no serious person in the profession ever dismissed his views.'' nytimes.com/1998/11/28/bus…
Jan 29, 2023 11 tweets 3 min read
Earlier today, a prominent economist was asked, “what keeps the 🇺🇸 from ending up like 🇬🇷?” For whatever reason, his answer skirted around the fact that Greece borrows in what is effectively a foreign currency. A rather important part of the story re: credit risk & interest rates Perhaps it’s in the book.
Oct 19, 2022 6 tweets 2 min read
I shared some thoughts on the UK debacle. Some excerpts follow. 🧵
marketwatch.com/story/have-the… On the market reaction
Oct 19, 2022 5 tweets 2 min read
🧵 Weaponize the debt ceiling in order to CUT Social Security and Medicare? Yes, that's their plan. banks.house.gov/uploadedfiles/… It was easy to see this moment coming, which is why I wrote this four-part series over the summer. I was hoping it might help to reset the debate before it's too late. Please consider sharing. stephaniekelton.substack.com/p/what-fdr-and…
Jun 15, 2022 4 tweets 2 min read
A dissenting view. Some slides from the talk I gave @LevyEcon over the weekend. 1/4 2/4
May 16, 2022 4 tweets 1 min read
Will central banks initiate future future helicopter drops? IMF makes the case for targeted, central-bank-initiated stimulus checks (aka "Outright Transfers". 1/4
imf.org/en/Publication… OT could be an alternative to "prolonged large scale asset purchases [which]...exacerbate already large pre-existing wealth inequalities, rely on new and
potentially excessive credit creation, distort relative prices, and give rise to concerns of fiscal dominance." 2/4
Feb 14, 2022 12 tweets 5 min read
Ezra's piece is worth reading, though his description of MMT is puzzling. MMT is not about gov being able to spend what it wants b/c it can "print money to pay its debts." What MMT is actually about is, well, the substance of what @ezraklein calls "supply-side progressivism". 1/ As @M_C_Klein put it, The Deficit Myth "is ultimately a plea to use permanent wartime mobilization for civilian ends." 2/ barrons.com/articles/the-c…
Feb 8, 2022 9 tweets 3 min read
“Where is the [Social Security] crisis? Just over the horizon…the promises that are being made to those now working cannot be honored.” nytimes.com/1996/10/20/boo… “I’m terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits.” nytimes.com/2003/03/11/opi…
Jan 18, 2022 12 tweets 4 min read
Just up.
stephaniekelton.substack.com/p/how-do-you-s… Some nuggets from the post. Subscribe if you'd like to read the entire thing (it's long).
Dec 31, 2021 7 tweets 2 min read
What follows is a THREAD, posted on behalf of Professor James Galbraith, who is not on Twitter but who asked me to share his reaction to this. "I'll bet that Paul Krugman has not read Isabella Weber's magisterial history, How China Escaped Shock Therapy, recommended by Adam Tooze in Foreign Policy, by Martin Wolf in the Financial Times, and by yours truly in Project Syndicate, among many other plaudits and prizes...