Keep pulling the thread on Stephanie Kelton.
For three decades prior to the COVID-19 pandemic, Japan ran large, persistent fiscal deficits without experiencing rising interest rates, a crowding-out effect on private investment, or significant inflation.
A consensus of economic research, including studies by the IMF, Federal Reserve banks, Ben Bernanke, and Olivier Blanchard, concludes that post-COVID inflation was overwhelmingly caused by supply-side disruptions, not demand stimulus.
Stephanie Kelton proposes that involuntary unemployment could be eliminated through a federally funded, locally administered job guarantee program.
From a Modern Monetary Theory (MMT) perspective, Stephanie Kelton argues that the purpose of federal taxes is not to generate revenue for government spending.
During her time as chief economist for the U.S. Senate Budget Committee, Stephanie Kelton observed that neither senators nor their staff from either party considered the potential inflationary impact of proposed legislation.
From a Modern Monetary Theory (MMT) perspective, the primary goal of fiscal policy design should be ensuring that spending is "inflation neutral," not "deficit neutral."
Barry Ritholtz asserts that for decades, dire predictions about U.S. budget deficits—such as crowding out private capital, skyrocketing borrowing costs, and causing rampant inflation—have failed to materialize.
According to Stephanie Kelton, a federal government budget deficit necessarily corresponds to a financial surplus in the non-government sectors of the economy.
Japan's economy has performed adequately despite maintaining a government debt-to-GDP ratio of approximately 250%.
Stephanie Kelton argues that the debt-to-GDP ratio is not a useful metric for determining if a country's government debt level has become excessive.
Stephanie Kelton states that a primary function of federal taxes is to reduce private sector purchasing power, thereby creating fiscal space for government spending without causing inflation.
Warren Mosler provided seed funding to the University of Missouri-Kansas City (UMKC) to establish an academic center for Modern Monetary Theory (MMT).