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MMT, as Kelton shows, shifts the terrain from narrow budgetary questions to one of broader economic and social benefits.

Kelton busts through the myths that prevent us from taking action: that the federal government should budget like a household, that deficits will harm the next generation, that deficits crowd-out private investment and undermine long-term growth, that entitlements are propelling us toward a grave fiscal crisis. Any ambitious proposal, however, inevitably runs into the buzz saw of how to find the money to pay for it, rooted in myths about deficits that are hobbling us as a country.

Stephanie Kelton’s brilliant exploration of modern monetary theory (MMT) dramatically changes our understanding of how we can best deal with crucial issues ranging from poverty and inequality to creating jobs, expanding health care coverage, climate change, and building resilient infrastructure. The leading thinker and most visible public advocate of modern monetary theory – the freshest and most important idea about economics in decades – delivers a radically different, bold, new understanding for how to build a just and prosperous society. Whether for better or worse, I’ll leave that for the experts, but The Deficit Myth convinced me that more politicians should give some MMT policies a chance.ĭisclaimer: The publisher provided a free eARC of The Deficit Myth in exchange for an honest review. This radical approach to government finances could change the country forever. In The Deficit Myth, Stephanie Kelton explains MMT by debunking six common myths about U.S. Proponents of this philosophy tell us that thinking about the federal government’s budget acting like a household budget is wrong. In short, MMT is a theory of government deficit.

federal government and any national government that issues its own currency, this analogy fails according to advocates of Modern Monetary Theory (MMT). For state and local governments – even for some foreign national governments – this analogy works. How many times have you heard people try to compare the government’s finances to that of a household? Many of my conservative friends say that money coming in has to equal money going out because that makes sense.