Rumsfeld agreed to set up Mosler with a few economist friends. Most helpful was Art Laffer, the architect of supply-side economics, whose lifework, arguing for reducing taxes on the rich, recently earned him the Presidential Medal of Freedom from Donald Trump. When they emerged from the muggy haze, Mosler had won an ally. Rumsfeld said he could spare an hour at the Racquet Club of Chicago, in the steam room. Working some connections, he eventually, in 1993, scored a meeting with Donald Rumsfeld, who was then working as an executive in the private sector. A polymath with an iconoclastic streak, Mosler shopped around his ideas about money creation and the deficit in the early nineties, looking for allies and finding none. The first person to begin assembling the pieces was a hedge-fund executive named Warren Mosler. is a new framework, it builds on old ideas found buried and forgotten in the work of foundational economists. “I know what she said was brilliant I just can’t believe her. I asked Ann whether she found Kelton convincing. But she did it so well that I can’t figure out why.” “It just seems like it’s exactly backward. “Did you hear me just say ‘Holy cow’?” she said. then require accurate forecasting of inflation risk? Yes, and, Kelton conceded at the festival, the models aren’t perfect, “but we can do a pretty good job.” And, anyway, government spending, she believes, is responsible for just a small part of inflation.Īnn raised her hand but didn’t get called. How soon will we become Zimbabwe, which printed so many Zimbabwean dollars that inflation peaked, in 2008, at an annual rate of ninety sextillion per cent? Never, according to Kelton under M.M.T., the focus is sustainable inflation, whereas fiscal traditionalists worry about the deficit and don’t consider inflation at all. Kelton often hears the same concerns about M.M.T., and most are about inflation. “Hands up if anybody’s got a question.” He peered out at the audience. Kelton replied, “It is, right?” She went on, “What we’ve done to ourselves is to just leave trillions of dollars, literally, on the table, by not taking advantage of the fiscal space that we have, by running our economies below potential, by living below our means as a nation, year after year after year.” “It’s a tough sound bite,” the moderator, the Journal’s financial editor, Charles Forelle, said. “She perfected the way to present these ideas to the public.” “It’s pretty obvious she has become the most visible face of M.M.T.,” Randall Wray, one of the economists who first developed the theory, said. She has written regular columns for Bloomberg started the movement’s most influential blog, New Economic Perspectives and is working on a book, “ The Deficit Myth,” which will come out next year. Kelton, who does at least five interviews per week, plus lectures, speaking gigs, and conferences, is, more than anyone, responsible for building M.M.T.’s digital army. principles, in which the government provides guaranteed jobs, health care, and affordable college, and launches clean infrastructure projects to replace our crumbling highways, airports, and bridges. Twitter, adherents imagine a world built on M.M.T. proposes that the constraint on government spending shouldn’t be debt but inflation: How much new money can you pump into the economy before prices rise?Īmong a certain crowd-mostly online, and mostly on the left-M.M.T. is seductively simple: governments don’t have to budget like households, worrying about debt, because, unlike households, they can simply print their own money. Some intricacies lay beyond me-a hazy blur of literature about floating exchange rates and reserve currencies addled my brain. I’d been stewing for a few months in the melange of blogs and YouTube videos and white papers that make up much of the M.M.T. On the dais, a Journal staffer introduced Kelton as an economist with an idea “that will either solve the world’s problems or send it into ruin!” She made a face, and then walked onstage. This spring, Kelton spoke at the Wall Street Journal’s Future of Everything Festival, held in a converted warehouse in Tribeca, where earnest networkers milled around taking notes. Kelton is the foremost evangelist of a fringe economic movement called Modern Monetary Theory, which, in part, argues that the government should pay for programs requiring big spending, such as the Green New Deal, by simply printing more money. Filmmakers trail her with cameras she goes on international speaking tours and once sold out a basketball arena in Italy. Stephanie Kelton, a senior economic adviser to Bernie Sanders and a professor of economics and public policy at Stony Brook University, is popular in a way that economists, almost definitionally, are not. Stephanie Kelton is the public face of Modern Monetary Theory.
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