by rene

Link to transcript

Some ideas seem too good to be true. Like this one. It comes from a 13-year-old listener named Amy. She says she knows the government has trouble finding enough money to pay for stuff like schools and hospitals. And she wondered if it has considered just printing more money. She asked us: Can the government do that? Just make more money to pay for stuff?

From Wikipedia

Alfred Mitchell-Innes, writing in 1914, argued that money exists not as a medium of exchange but as a standard of deferred payment, with government money being debt the government may reclaim through taxation.[8] Innes argued:

"Whenever a tax is imposed, each taxpayer becomes responsible for the redemption of a small part of the debt which the government has contracted by its issues of money, whether coins, certificates, notes, drafts on the treasury, or by whatever name this money is called. He has to acquire his portion of the debt from some holder of a coin or certificate or other form of government money, and present it to the Treasury in liquidation of his legal debt. He has to redeem or cancel that portion of the debt...The redemption of government debt by taxation is the basic law of coinage and of any issue of government ‘money’ in whatever form." — Alfred Mitchell-Innes, The Credit Theory of Money, The Banking Law Journal

Economists Interviewed:

Stephanie Kelton

Professor of public policy and economics at Stony Brook University. She served as chief economist on the US Senate Budget Committee in 2015 and as a senior economic adviser to Bernie Sanders’s 2016 presidential campaign.

Dr. Kelton's personal website

Sample writing:

How we think about the deficit is mostly wrong

When the government spends more than it gets in taxes, a “deficit” is recorded on the government’s books. But that’s only half the story. A little double-entry bookkeeping paints the rest of the picture. Suppose the government spends $100 into the economy but collects just $90 in taxes, leaving behind an extra $10 for someone to hold. That extra $10 gets recorded as a surplus on someone else’s books. That means that the government’s -$10 is always matched by +$10 in some other part of the economy.

Thomas Palley

Formerly Chief Economist with the US-China Economic and Security Review Commission. Prior to joining the Commission he was Director of the Open Society Institute's Globalization Reform Project, and before that he was Assistant Director of Public Policy at the AFL-CIO.

Sample writing:

Modern Monetary Theory vs. Structural Keynesianism

A critique of Modern Monetary Theory

This paper excavates the set of ideas known as modern monetary theory (MMT). The principal conclusion is that the macroeconomics of MMT is a restatement of elementary well-understood Keynesian macroeconomics.