Tuesday, November 6, 2018

How Much Wine is Stephanie Kelton Drinking?

Stephanie Kelton 
Stephanie Kelton is Professor of Public Policy and Economics at Stony Brook University and former chief economist on the U.S. Senate Budget Committee 2015 minority party staff and an economic advisor to Bernie Sanders' 2016 presidential campaign.

CFO.com tells us:
She’s fairly recently emerged as something of a rock star, if such a thing exists in the world of economics. She’s on TV all the time.
According to CFO, in a lecture at Stony Brook, she said what she’s trying to do is “get us to the point where we can open a nice bottle of wine, read the headline that the national debt is at an all-time high, and feel at peace with the world. Because there is no reason to panic.”

If this is Kelton's perspective, well, she is going to be drinking a lot of wine. But it is Modern Monetary Theory which is hard to understand when sober.

As she puts it, “The government can no more run out of money than a carpenter can run out of inches or the scorekeeper at the Stony Brook football game can run out of points.”

Well, yeah, when the government controls the money printing presses it can just print any amount of money it chooses. Venezuela and Zimbabwe are excellent examples of mad money printing in operation.

But this money printing does not bring wealth to an economy. It provides an edge to the money printers (the government) who get to spend it first before it falls in purchasing value and hurts regular consumers. How can this be difficult to understand?

Although Kelton also warns about price inflation, it seems to slip her mind moments later.

“In D.C., there is a great deal of pressure to pay for things,” she wrote to CFO in an email. “I wish we were having a very different kind of national debate. There’s nothing to prevent the federal government from creating as much money as it wants and paying it to someone.”


(ht Christopher Barcelo)


  1. Wow...I use the same arguments that she does. The difference is, that I present them as "reductio ad absurdum" arguments.

  2. "...or the scorekeeper at the Stony Brook football game can run out of points."

    So she wouldn't object if the scorekeeper just added unscored points to one team or the other during a game?

    1. Since I doubt she's ever played a competitive game herself, I'd kinda doubt it. However assuming her husband plays golf, ya think he'd mind adding a few strokes to his game? I kinda doubt it.

    2. Very powerful comment, Mr NAPster..we need so much of this kind of at the point reasoning when we have the rare opportunity to debate people so logically wrong not because we will get a real chance to persuade them of their total lack of logic and basic common sense (only mises I remember could in the end persuade the boss of the socialist in his time in Vienna, Mr .Otto) but because we can build an ideal debating attitude with the real people we have chance to make a difference for the freedom cause (and obviously its logical corollary, the principle so dear, I guess, to you, the NAP Non Aggression Principle better to state it for all newcomers!); I hope Mr Roddis support me on this.

  3. Wow! As scary as Kelton’s comments are, check out the comments at CFO.com. Forget the wine, get out the needle and spoon, you’re going to need something quite a bit stronger than merlot.

  4. I love to ask the MMTers probing questions. And then watch them sidestep. They will not be pinned down. Today I wrote:

    Bob Roddis said...

    And no one ever asks, “How will you pay for it?”

    I always used to ask that. But that was before I understood that modern money has abolished scarcity. Of everything. The government, using its sovereign powers and control over our marvelous fiat money supply, can easily triple the defense budget and buy every US citizen a McMansion plus two US built SUVs. It's only those mean-spirited libertarians that are holding us back.


    I've also had a long term essay contest with a small prize for the best MMT essay explaining how they know that Austrian Economics is wrong without having the faintest idea what it's about. That induces very interesting sidesteps. But no one ever says, "Oh, I understand it" or tries to explain it. That's our situation. No one will engage us. Perhaps it's hopeless.