US Fiscal Policy and the 'Deficit Myth' with Stephanie Kelton | Masters in Business
From Masters in Business
Stephanie Kelton•Professor of Economics and Public Policy, Stony Brook University
Executive Summary
12 quotes
Concerns Raised
Mainstream economics is resistant to new evidence and often relies on flawed models that ignore real-world factors like finance and banking.
Misunderstanding the nature of deficits leads to premature austerity and insufficient fiscal responses during economic crises.
In a high-debt environment, central bank interest rate hikes can become inflationary by significantly increasing government interest payments into the private sector.
Opportunities Identified
Adopting an MMT lens allows for fiscal policy to be directed at achieving public purpose, such as full employment and green energy transition, constrained only by real resources.
A federal job guarantee could eliminate involuntary unemployment and create a more stable and equitable economy.
Governments can respond more robustly to economic downturns without being constrained by misplaced fears of insolvency or bond market vigilantism.