— Debt, Deficit Spending & Austerity

When talking about the federal budget, “deficit” refers to the difference between federal government spending and taxing — in any given fiscal year. “National debt” refers to total outstanding Treasuries (bills/notes/bonds). A misunderstanding of these underlies austerity thinking. Scroll down for recent commentary and explainers. ~ SR

The Deficit Myth • Modern Monetary Theory and the Birth of the People’s Economy
— Stephanie Kelton (@StephanieKelton), Public Affairs Books (@publicaffairsbooks @public_affairs) June 2020

Why we need to debunk the ‘deficit myth’
— Stephanie Kelton BBC Reel June 29, 2020 (05:09)

Thomas Edison on Government Created Debt-Free Money
“But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good… If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency… instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?”
— Thomas Edison, quoted in the NY Times Sept 2000

“What is true of government as a whole is also true of particular programs. Social Security and Medicare are government programs; they cannot go bankrupt, and they cannot fail to meet their obligations unless Congress decides–say on the recommendation of the Simpson-Bowles Commission–to cut the benefits they provide.
The exercise of linking future benefits and projected payroll tax revenues is an accounting farce, done for political reasons. That farce was started by FDR as a way of protecting Social Security from cuts. But it has become a way of creating needless anxiety about these programs and of precluding sensible reforms, like expanding Medicare to those 55 and older, or even to the whole population.”

— James K. Galbraith In Defense of Deficits March 4, 2010

How to Pay for the War — John Maynard Keynes, 1940


Life and Debt: Unpacking the federal debt ceiling
— Stephanie Kelton, WEMU May 15, 2023


How Many More Trillions Before the Debt Triggers a Crisis?
— Stephanie Kelton (@StephanieKelton), John B. Taylor, Pairagraph (@pairagraph) June 5, 2022


MMT and the deficit myth                                                                            — Lars P. Syll, Sept 12, 2021

TED talks: The Big Myth of Government Deficits                                                                          — Stephanie Kelton (@StephanieKelton), <em>Ted Talks</em> (@TedTalks) Aug 2021, (13:46)

Biden Can Go Bigger and Not ‘Pay for It’ the Old Way • By focusing on how much revenue they hope to raise from tax increases on the well-off, Democrats risk limiting the scope of their ambitions.
— Stephanie Kelton (@StephanieKelton) New York Times (@NYTimes) April 7, 2021
href=”https://www.nytimes.com/2021/04/07/opinion/biden-infrastructure-taxes.html” target=”_blank” rel=”noopener”>Biden Can Go Bigger and Not ‘Pay for It’ the Old Way • By focusing on how much revenue they hope to raise from tax increases on the well-off, Democrats risk limiting the scope of their ambitions.
— Stephanie Kelton (@StephanieKelton) New York Times (@NYTimes) April 7, 2021

The Real-Life Victims of Democrats’ Irrational Deficit Paranoia • How moderates’ fear of the Congressional Budget Office screws students and shrinks ambitious policy, all to protect the fabled “taxpayer”
— Alex Pareene (@pareene) The New Republic, (@NewRepublic) May 5, 2021

Stephanie Kelton On Biden, Stimulus, And The Myth Of The Big Bad Deficit
— Julianna Forlano (@JuliannaForlano) Host, Executive Producer, ActTV (34:44)


Interview: Stephanie Kelton Talks MMT and More
—Nathan Robinson (@NathanJRobinson), Sparky Abraham (@sparkyabraham), Current Affairs (@curaffairs) Nov 14, 2020

The Deficit Myth By Stephanie Kelton: Introduction and Index
— Ed Walker, Emptywheel, June 11-July 6, 2020

Can governments afford the debts they are piling up to stabilise economies?
— Stephanie Kelton (@StephanieKelton), Financial Times (@FinancialTimes)(@FT) May 3, 2020

War chest or treasure chest? Is the answer to COVID-19 more debt?

— ABC Radio National (@RadioNational) (28:36)
Has Modern Monetary Theory’s time come? Podcast & transcript
— Alan Kohler (@AlanKohler) Bill Mitchell (@Billy_BLog) Eureka Report March 26, 2020 (48:18)

The huge coronavirus bailouts will need to be paid back. Or will they?
— Phillip Inman (@PhillipInman) The Guardian, March 28, 2020


Reexamining the Economic Costs of Debt Congressional Testimony before the US House Budget Committee
— L. Randall Wray, Levy Institute Nov 20, 2019

Debunking the Public Debt and Deficit Rhetoric
— Eric Tymoigne (@tymoigne) Taylor & Francis Online</em July 22, 2019


Stephanie Kelton addresses five commonplace myths of the US economy: What is the deficit? What is the national debt? What about China? Don’t we eventually have to pay off the national debt? What can we afford? — Oct 15, 2018 (9:50)

The Explicable Mystery of the National Debt
— J.D. Alt (J.D. Alt) New Economic Perspectives Aug 2018

The Kids are NOT Alright! The Truth about The Federal Debt and Intergenerational Equity
— Francisco Flores (@fflorescpa), Following the Money July 28, 2018

Government debt and spending
— John Buell, Mount Desert Islander, April 27, 2018

Government debt and spending
— John Buell, Mount Desert Islander, April 27, 2018

How Progressives Can Criticize Trump’s $7 Trillion Deficit Without Preaching Austerity
— Kate Aronoff (@KateAronoff), In These Times, Feb. 13, 2018

Instead of Worrying About Budgets and Deficits, Ask About Impact
— Stephanie Kelton (@StephanieKelton), Truthout, Jan. 9, 2018


Majority Report with Sam SederThe Debt Crisis is a Myth & Modern Monetary Theory w/ Stephanie Kelton @SamSeder (58:07) Sept 26, 2017

Wait, Should We Care at All About the National Debt? As Democrats bash Republicans for pushing an expensive tax cut package, we asked if Americans should be concerned about rising debt.
— Liviaa Gershon (@LiviaGershon), Vice, Dec. 8, 2017

Budget deficits aren’t the economic threat you might think • Economist Stephanie Kelton says deficits are viewed in the wrong light
— Anora Gaudiano (@AnoraPlanner) Market Watch (@MarketWatch) Dec 6, 2017


— L. Randall Wray Deficit Owls Oct 1, 2016 (06:37)

Public Debt, Inequality, and Power • The Making of a Modern Debt State Note: While not MMT, this book provides some interesting history and perspective.
— Sandy Brian Hager (@sanha926), University of California Press, (@UCPress) June 2016


Four Reasons You Should Consider Washington’s Deficit As Your Surplus
— John T. Harvey (@John_T_Harvey), Forbes (@Forbes), Feb 24, 2014

Deficit Delusions: Putting to Rest the Clinton Legacy
— Dean Baker (@DeanBaker13) Center for Economic and Policy Research 29 January 2013

MMT as the Austerity Alternative Transcript “There IS An Alternative To European Austerity: Modern Money Theory (MMT)” with Stephanie Kelton and Michael Hudson in Rimini, Italy.
— Michael Hudson, Stephanie Kelton March 13, 2012

Debt, Deficits, and Modern Monetary Theory (An Interview with Bill Mitchell)
— Winston Gee (@winstongee), Harvard International Review, Oct. 16, 2011.

Coin Seignorage and Inflation
— Scott Fullwiler (@videotroph) New Economic Perspectives Aug 1, 2011

Coin Seigniorage: A Legal Alternative and Maybe the President’s Duty
— Joe Firestone (@joefirestonephd) New Economic Perspectives July 18, 2011

The Federal Budget Is Not Like a Household Budget: Here’s Why
— L. Randall Wray, Huffington Post May 25, 2011

America Needs Deficits
— Thornton Wilder Huffington Post April 12, 2011

Coin Seigniorage and the Irrelevance of the Debt Limit
— Beowulf ShadowProof (@shadowproofcom) Jan 3, 2011

Is The Federal Debt Unsustainablehttp://www.levyinstitute.org/pubs/pn_11_02.pdf
— James K. Galbraith Levy Economics Institute of Bard College 2011

How to Implement True, Full Employment
— L. Randall Wray New Economic Perspectives Aug 12, 2009