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43:00
https://www.youtube.com/watch?v=e70433tzwxM
And she (Elizabeth Warren) was saying, look, with a with a little itty bitty tax on the wealthy, we could just have a tax of, you know, 2% on, wealth, 50 million and higher. And then we add an extra 1% when they get to a billion, we could take the revenue that we would get from that wealth tax, and we could have affordable child care. We could cancel some student loan debt. And she said, and you know what? The wealthy won't even feel it. They won't even feel it because their wealth accumulates at a rate far above 3% per annum. to get richer and richer and richer. To which I said, then what is the point? What is the point of a wealth tax if it isn't to aggressively get at concentrations of wealth and income? And the class, you know, the power and everything that goes with it, it because the answer is it's just a 'pay for❜. It's just you're peeling off just enough to barely touch them, to say, I have the revenue to pay for my, programs around child care or whatever. When I'm telling you that MMT is about separating these fights so that your tax conversation is not intricately bound to the spending proposals, then you don't say, well, I want just enough revenue to cover the cost of what it is I'm trying to do. You separate the two and you say, what is it I want to accomplish in terms of dealing with people like Elon Musk or Peter Teal or whomever you perceive to be too wealthy in society and to have too much power and too much, control over the lives of other people and to rebalance distribution between capital and labour. And again, I think you have, a much stronger ally in MMT. And in that framework, when you're able to break yourself free of looking at tax for the sake of revenue and 'pay fors' and you just say, let's just talk about how we want to reshape the tax code and, and so forth to address all of these other sorts of things.
https://x.com/patricianpino/status/1845540365807268067?s=61
そして彼女（エリザベス・ウォーレン）は、富裕層にほんの少し税金を課すだけで、5000万ドル以上の富裕層に2％の税金を課すことができる、と言っていました。そして、富裕層が10億ドルに達したらさらに1％を加算し、その富裕税から得られる収入で、手頃な保育を提供できる、学生ローンの負債の一部を帳消しにできる、と。そして彼女は言いました。「でも、富裕層はそれを感じないんです。富は年率3％をはるかに超える割合で蓄積されるので、彼らはそれを感じないのです。どんどん裕福になっていくのです」。それに対して私は言いました。「では、富裕税の意味はどこにあるのですか？富と所得の集中を積極的に抑えることではないのなら、富裕税の意味はどこにあるのですか？階級、権力、それに付随するすべてのもの、答えは、それは単に「支払うもの」だからです」。単に、かろうじて触れる程度に剥がして、子育て関連のプログラムなどに支払う収入があると言うだけです。MMT はこれらの戦いを分離して、税金に関する議論が支出提案に複雑に結びつかないようにすることだと私が言うとき、あなたは「私がやろうとしていることのコストをカバーするのに十分な収入が欲しい」とは言いません。2 つを分離して、イーロン マスクやピーター ティールなど、社会で裕福すぎると感じ、権力を持ちすぎて他人の生活に支配力を持ちすぎていると思われる人々に対処するという点で、資本と労働の分配のバランスを取り戻すという点で、私が達成したいことは何かと言うのです。そしてもう一度言いますが、MMT にははるかに強力な味方がいると思います。そして、その枠組みの中で、収入と「支払い」のために税金を考えることから抜け出すことができ、税法をどのように作り変えたいかなどについて話し合い、他のあらゆる問題に対処しようと思えばよいのです。
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full
2024/10/13
0:00sometimes it feels like we're just waiting for the other shoe to drop yes the 2008 Global financial crisis utterly
0:08discredited the neoliberal economic model yes we're staring down the barrel of a climate crisis which threatens our
0:15very existence but the other side of the equation what we're supposed to replace
0:22that neoliberal model with and how we're going to pay for decarbonization well that just doesn't
0:28have the same consensus Stephanie Calton an economist and former adviser for the 2016 Bernie Sanders campaign argues that
0:35finding the money is actually the easy part she's a proponent of modern monetary Theory a set of ideas which
0:42turns fiscal assumptions on their heads and has also invited criticism from both
0:48the left and the right ulot have been asking for an mmt Downstream for ages so
0:53here it is and if you want to find out more about Stephanie kelton's ideas she's got a book called the deficit myth
0:59and is the subject of a new documentary called finding the money there's a link to it in the description I hope you
1:05enjoy this [Music]
1:10interview Stephanie Kelton welcome to Downstream thank you so much for joining us my pleasure thank you for having me
1:17so I guess my first question is this could you explain to me uh for the
1:23completely uninitiated what mmt is and and please bear in mind you're talking to a literature graduate so right in
1:30comic Sands if you have to okay well let me I'm going to do this the way that you
1:37asked me to do it but I feel a sense of obligation to the many people who
1:43developed the writing and the scholarship that over now almost 30
1:48years has been dubbed mmt so it really is a very big project that a number of
1:55us started contributing to 253 years ago thinking about the monetary system and
2:04what it is that we have today in the form of a fiat
2:09currency which is basically saying you know we don't have a a currency in the
2:15UK the pound in the US the dollar in Australia the Australian dollar in Japan
2:20the Yen these are Fiat currencies with a flexible exchange rate meaning we're not
2:27on a gold standard or some other monetary system where the government
2:32pledges to convert the currency into something it could run out of gold or
2:39silver or another country's currency and so mmt is really about interrogating
2:45this question like what has changed what changes when you have a floating
2:51exchange rate and a fiat currency what are the policy options that are available that we think are unavailable
3:00to us because we're very often trapped in this old way of thinking about how the currency works and what mmt is doing
3:08is saying let's recognize that we have this sort of degree of Freedom available
3:15to us because of the monetary system we have today and we're not really taking
3:22full advantage of the policy options that are available to us I'll give you just one example full employment we tend
3:30to run Economic Policy as if we're in some way still constrained by the need
3:36to find the money it's almost like how are you going to pay for everything where will you find the money to do this
3:43has this sort of gold standard aura about it as if you really have to go out
3:50and find gold or something in order to be able to pay for education or health
3:55care or infrastructure deal with climate and mmt is trying to clear sort of the
4:01fog and bring us to the modern era where we recognize that uh we're not on a gold
4:06standard the money system we have today allows us to spend more freely but the
4:13thing you have to watch out for is inflation and so it really does shift the entire debate away from worrying
4:20about things like running out of money bankrupting the country and so forth and get us focused on the our real capacity
4:29to build build infrastructure or deliver Health Care Services or combat climate
4:34change or whatever in a way where we have a proper debate instead of these
4:40distracting debates that have really hampered I think policymaking
4:45for most of my adult life I mean so if if I understand you correctly is the
4:51argument from mmt that currency can be issued basically without limit by
4:58central banks the only thing you have to worry about is inflation and within the framework of mmt Taxation becomes a way
5:06of managing inflation because it it takes money out of circulation is that the argument well bits and pieces of
5:14that yes but it's really it's it's complicated right and so let's kind of
5:19try to unpack that you said can the government spend without limit or something along those lines it can't
5:26spend if if your currency so well you can't issue currency without limit you
5:32have the capacity to um issue currency in a sense
5:39up to whatever Parliament or in in the US whatever Congress decides there's no
5:46inherent constraint on the ability of the government to commit to spending money and then to have those dollars or
5:53pounds get spent because the government is the issuer of the currency it can authorize spending in effectively any
6:01amount any dollar or pound size budget it chooses but the limit you rightly
6:06then pointed to is inflation so there is a constraint you can't run out of money
6:12but you can run out of things to buy and that's a real hard constraint is the
6:18capacity of the economy to safely absorb that spending and if there isn't
6:25sufficient capacity to safely absorb the spending then you will get inflation Ary
6:30problems and then you pointed to taxation which is one way to sort of
6:36calibrate what it is the government is trying to do so that if the government just said listen we're never going to
6:43collect tax we're not going to increase tax ever again we're just going to leave tax uh the tax code as it is today and
6:51we're just going to sprend freely from here on out never worry about uh changing tax levels or anything you
6:59would get a pro you would get an inflation problem right and you said taxes one important thing they do is
7:06that they remove dollars or pounds they take purchasing power away from someone
7:12so it is important in some sense to regulate how much the government is
7:18spending relative to how much it's taking away from the rest of us so that
7:23it avoids the problem of inflation by pushing too much money into our hands
7:29without removing enough but also that it avoids unemployment where it is the
7:35opposite problem it's not putting enough in relative to how much it's taking away from the rest of us so there is a
7:42balance that needs to be struck with the Dual goals of achieving full employment
7:48but also low inflation um one of the major themes of uh finding the money
7:54which is the film that you've you know recently made expressing many of these arguments is climate change and the need
8:01to build green infrastructure decarbonizing infrastructure very very quickly um how does uh modern monetary
8:09Theory relate to climate change in your view well it's one of many policy
8:15challenges that you can uh address in part through government policy
8:22committing to spending making the Investments That would be necessary to
8:28deal with mitigation and adaptation around climate change so if you recognize that the public sector has a
8:36very important role to play then the first question anyone asks is obviously how are you going to pay for those
8:42Investments that you want to make around adaptation mitigation dealing with the impacts of climate change so the public
8:49sector has an important role to play they've got a budget for the Investments that they want to make to tackle climate
8:56change here in the US Congress passed what to date has been the most ambitious
9:02uh climate change policy and that's in the form of this so-called inflation reduction act which is really a big
9:09climate Bill and that was Congress committing hundreds of billions of dollars and saying you know we're going
9:16to uh put money behind this effort and we want to see Greening of the economy
9:22and uh investments in all kinds of ways to deal with climate change so uh what
9:28does mmt have to teach well first that the public purse can be tapped as
9:36Congress or Parliament chooses and it can supply whatever funding is deemed
9:43necessary uh without worrying about running out of money how to pay for it finding the money so mmt is helpful in
9:50letting us know that the money can always be made available to deal with
9:55climate change and that the thing you have to watch out for when you're pushing hundreds of billions or
10:01trillions into this is managing inflationary pressures along the way so
10:06I suppose when I was watching the film I was like I'm arm in-arm with you when you're saying things like a national
10:13budget is not like a household budget right household budget can run out of money a nation can't because it's not
10:18going to run out of people essentially right that's why Nations can't run out of money um it means that Nations have a
10:24lot more um autonomy over over the pace at which they pay back debts and Nation may not ever become debt free and these
10:32are all ways in which nations are different from households the bit where I suppose I became a little bit more
10:39confused is that deficits don't matter
10:44in and of themselves um inflation matters but deficits don't matter I
10:51understand that in different circumstances what cons what's considered to be an acceptable debt to GDP ratio that changes um but I think
10:59think that lots of people would find the idea that deficits don't matter very challenging to how they've been taught to think about economics well okay so a
11:07few things like first I would say I have never argued and I don't believe anyone
11:12in mmt in the scholarly Community has ever argued that deficits don't matter
11:18okay that's not that's become sort of a a a weird label of mmt that we're
11:24somehow this school of thought or the approach that argues that deficits don't matter that's not true at all what we
11:30argue is that deficits matter but not the way that we've been taught to believe that they matter so people have
11:38argued that for example a government deficit is de facto just on its face
11:44evidence that the government is mismanaging its finances that's doing
11:50something wrong that there's this idea that the the budget should be in balance
11:56and if it's not either balanced or in Surplus something's gone wrong why would
12:01the government's budget land in a deficit that's just showing you the government is behaving
12:07irresponsibly and so mmt is saying no that's not the case at all every deficit
12:13is good for someone recognize that upfront so people hear this word deficit
12:19and it has a negative connotation we're we've been you know taught and trained
12:26and conditioned to hear that word and to have an averse reaction deficit that's
12:33bad right it's very hard to imagine you finding a way to use the word deficit in
12:38a sentence where it's a good outcome no deficit is just sort of inherently bad
12:43you're watching your favorite sports team and you know it's a football game and you hear the announcer come on and
12:49say if Liverpool's going to come back and win this game they're going to have to overcome a twop point deficit I mean
12:56deficit right two goal deficit bad what mmt says is okay hold on the the budget
13:03outcome whether it's a surplus balanced budget or a deficit is not inherently
13:09telling you anything important okay what is this thing we call the deficit what
13:15is a government deficit what does it tell us the difference between two numbers that's what it is right the
13:23first number is outlays it's how many pounds or how many dollars the
13:28government puts into our hands each year the first number the second number is
13:34how many pounds or dollars they remove from our hands each year mostly through
13:41taxation so if someone were to tell you that the government is putting more
13:46pounds into your hands collectively the people than it is taking away would you
13:52have a negative reaction to that or would you look at it and say oh they're making a
13:58contribution to the rest of the economy if they add more than they subtract what they're really doing is generating a
14:05surplus right if they put five in and only take three out what they're really
14:12doing is depositing two into some other part of the economy so the government's
14:18deficit is equally a surplus when viewed
14:23from a different perspective every deficit is good for someone you all over
14:28there have been talking for weeks about a $22 billion fiscal hole
14:35right yeah I mean it sounds like a horrible medical condition when you put it that way but yes yeah so there's this
14:41huge Obsession media Obsession the the politicians the public everybody has
14:47been sort of focused on this idea that there is a $22 billion shortfall a whole
14:53that something's gone wrong that there's something that needs to be repaired or fixed or mended and what I'm sitting
14:59here explaining to you is that this thing that we call the government deficit is our Surplus it is just by
15:09definition by math by accounting it is always the case that if the government's
15:15budget is in deficit that there is a financial Surplus on the other side of
15:21the equation and that Financial Surplus exists only because the government is
15:28putting in more than it's taking out in other words it is running a fiscal
15:33deficit and so we've got to reframe and relabel and rethink this whole notion of
15:42what it means to have the government's budget um not in balance and what we how we
15:50understand the role of the government's deficit on our side of The
15:56Ledger I mean so to think about what's happening on that other side of the Ledger for a moment um for me there's a
16:04very big difference between are we running a deficit because we've borrowed
16:10to invest in our National Health Service right something which makes us all healthier happier people or is it
16:17because prime minister Liz truss has decided she wants to borrow in order to pay for tax cuts for the very wealthy
16:24there's a difference between um paying to uh renationalize for instance the
16:30railways or parts of the energy sector versus you know handing out millions and
16:36billions of pounds to the likes of McKenzie and deoe so one of the things I
16:42guess I'm I'm asking is how how important to you is where that public money is going on the other side of the
16:49ledger to what extent it's in uh public hands or um you know in in very very
16:56elite private ones very important right when I so the the first step I think of
17:03this in sort of stages because you really do we have to deprogram people we have to get them first over the hurdle
17:10which is I don't want the government ever to run a deficit so the previous
17:15response that I gave you was about overcoming that first hurdle right thinking of the government's deficit as
17:20our Collective Financial Surplus every deficit is good for someone and you're taking me right to where I want to be
17:28and where where the rubber meets the road which is if I say every deficit is
17:33good for someone you're saying okay but for whom and for what and that's
17:39everything right but you can't get to that part of the debate and discussion
17:45at least in my mind without first coming to terms with the fact that it's okay for the government's budget to be in
17:51deficit in fact it's probably more than okay in the US context and in the UK
17:57it's necessary we need the government's budget to the budget outcome to be a
18:03deficit so now we have a real conversation which is okay who are those deficits serving are we running deficits
18:10to as you suggested create a huge windfall for people who are already
18:15doing phenomenally well tax cuts aimed at the biggest wealthiest corporations
18:21or the wealthiest people in society that will benefit them those deficits will
18:26produce surpluses for those folks no question about it but will it trickle down will it benefit broader Society
18:34will it improve life for working people and the rest of it and we've got 40
18:39years we've run this experiment the results are in and we know that it does
18:45not work so now the question becomes what kinds of deficits can deliver
18:51outcomes that lift people up that produce Better Health outcomes that tackle climate that give us better uh
18:59more affordable education that deal with the real deficits in our economy
19:04infrastructure Education Health and the like so every deficit is good for someone first you got to get over this
19:11aversion to having the government in deficit then once you get there you say
19:16all right so we're going to have deficits but deficits for whom and for what and that's the that's where the
19:23real debate needs to take place I suppose if I was to play Devil's Advocate and pretend to to be one of
19:29Rachel Reeves's advisors I mean what a world that would be but let's say I'm one of Rachel Reeves's advisers and you
19:35know we've had a high level meeting at the treasury and I turn around and I say to you well it doesn't really matter
19:41what I think about running deficits it doesn't matter what you think about running deficits what matters is the
19:48market and being disciplined by the market because ultimately uh the UK is
19:53reliant on Imports we import more than we export we need the pound to be strong
20:00against the dollar so the minute that goes the wrong way like it did for Liz truss and quasi quaring we have an
20:07economic crisis and we have a political crisis because of it so what what's your response to I guess that rebuttal the
20:14idea that it doesn't really matter what we think about deficits it matters What markets think well I'm not going to say
20:20that markets are wholly irrelevant but I will say that the
20:26UK uh like so many other currency issuing governments can survive quite
20:33well in the face of a currency that experiences uh
20:39depreciation uh volatility Australia has a currency that goes up and down Japan
20:46has a currency that goes up and down Visa the dollar um and yet their governments pursue their independent
20:55macroeconomic policies without having to worry about Market discipline per se so
21:01look I'll say with what happened to Liz truss I think is uh has become a huge
21:08barrier in the thinking of the current government that somehow if they try to
21:14take independent action to do something bold that maybe isn't fully costed that
21:20increases deficits that they're going to experience the kind of backlash from financial markets that people think you
21:27know came in and and said to trust oh no you don't we won't allow you to carry
21:33out this uh set of you know proposals that you wanted and and somehow that
21:39leaves you incapable of taking independent policy action I don't think that's what happened at all with the
21:47trust government I think that what happened is she didn't have the support
21:52of backbenchers she didn't Li get her ducks in a row before announcing this
21:58agenda I think markets rightly perceived the agenda would be uh inflationary I
22:07think that um the reaction was these
22:13policies are likely to push up inflation at a moment when inflation is already high the Central Bank the bank of
22:20England is going to respond to an increase in inflation by raising
22:25interest rates and based on this gets a little bit wonky but this is financial
22:32markets trying to read what the central bank will do in other words interpret
22:38their reaction function and they said okay we think it's going to be inflationary rates are going to go up
22:44and so we're going to try to move out of the pound and then you had the problems of course with the Pension funds which
22:52the bank of England eventually did rescue but um I don't think that what
22:58happened is that markets were saying no to Liz trust I think markets were saying
23:05Liz this is probably going to be inflationary the central bank is probably going to respond in this way
23:10we're going to place our bets accordingly and we don't think you have the strength from within your own party
23:16and you don't have the bank of England uh behind you and so markets moved the
23:23pound down and yields up and then you were through it in a matter of a short
23:30period of time because the bank of England stepped in took care of the pensions but this was a political
23:36problem this is not something that you have to worry about if you have the the
23:43will to stand up to the central bank and to insist that you're going to move
23:49forward with your policy proposals and if yields move up it's not like you
23:55can't uh afford to carry out out the agenda even in the face of you know
24:02Rising interest rates we did that here I mean just to go back to Rachel Reeves
24:07and the the missing 22 billion I mean if if you were in charge of her economic
24:12policy and her response to the 22 billion specifically what would you be
24:18advising instead well the point is there's nothing missing it's there it's
24:23it's it's on the non-government balance sheet that's where a government deficit goes quote
24:31unquote is it goes to the non-government part of the economy there's nothing missing you know anyone who's ever dug a
24:37hole before knows that if you get a shovel and you start digging into the Earth you're GNA you can dig a hole but
24:45the dirt has to go somewhere it piles up somewhere else it's exactly the same
24:50thing with a government deficit if there's a $22 billion deficit registered
24:57on the government's leg than there is a $22 billion Surplus on
25:02The non-government Ledger it doesn't it's not that it's missing we know where it is it's that there's an there's an
25:10unhealthy obsession with the budget outcome the idea that the government's budget is
25:16supposed to be balanced it isn't the economy is supposed to be balanced not
25:21the government's budget okay that's the problem is that we have governments that
25:27get obsessed with the budget outcome instead of recognizing that there's nothing inherently wrong with having
25:35governments spend more than they collect in tax that is to have their budget in
25:41deficit if the broader economy is balanced if you have full employment and
25:46low inflation the number that pops out of the budget box at the end of the year
25:51who cares right keep your eye on the prize the the real economy is what
25:56matters and if you can achieve the outcomes whether it's investments in
26:02health or education or climate or the rest of it and you can keep inflation
26:08low right while doing those things I don't care what number pops out of the
26:13budget box I don't care if it's a small deficit a medium-sized deficit a relatively large deficit a balanced
26:20budget a surplus what matters are the real outcomes not the arbitrary number
26:26that falls out of the budget box one of the things that you hear a lot from supporters of mmt is that when it
26:33comes to things like War military aid somehow the government always finds the
26:39money the quibbling over affordability that that happens when you talk about hospitals when you talk about
26:46decarbonization when you talk about housing and I was thinking about this and I was reflecting on it because it's
26:51something which instinctively I agree with I go yeah no that's really really true um but if I was a a member of uh
26:59you know the International Financial Elite you know I work out of Wall Street
27:04and I've got homes everywhere and I've got a model wife and a million Mistresses I would say well hang on
27:11there is a bit of a difference to me between building a hospital or ending ending homelessness and you know buying
27:19more cruise missiles or or building an aircraft carer because one of those
27:24things preserves America's status in the world it makes makes America the you
27:29know it puts America at the very top of the geopolitical order and makes it much
27:34more difficult for America to be disciplined either by other countries or
27:41by market forces in the way that other economies and other countries are um so
27:47is this idea of of you know you can you can you know run a big deficit what matters is the real economy um and you
27:56can absorb I guess like some some degree of like fluctuation from the markets does that maybe work better in an
28:03American context than it does for other countries which either rely a lot more
28:09on um importing goods and having to buy things using the dollar or don't have
28:14the same geopolitical status as the United States does I will readily agree
28:20that the US is in a unique uh position by virtue of the fact that essentially
28:27the entire world is willing to work and produce in order to get the US dollar no
28:33question and when I say you know what does mmt teach us one thing is that a
28:39currency issuing government whether you're the UK the US Australia Japan
28:44China whatever you can afford to buy whatever is available and for sale in your own
28:53currency okay that is in a sense the limit what is available in for sale in
28:58your currency the US has uh the entire Global Market Place uh because
29:04everybody's willing to work and produce to get the dollar but does mmt does that mean that mmt only in a sense works for
29:12the us because of its Reserve currency status no of course not I mean I can't count the number of times articles have
29:19been written over the decades pointing to a country like Japan right is Japan a
29:25poster child for mmt or something like that but it's not just the US it's not just Japan it's look when covid hit what
29:34did countries around the world do they massively spent to address the pandemic
29:42and the weak economies and some and so forth some spent more than others some did very bold ambitious fiscal but
29:49others you know did more modest but everybody spent a lot of money and including countries that were told you
29:55have a fiscal crisis you won't be able to borrow you have to get your fiscal house in order there's no fiscal space
30:01and all that then Co comes along and all of a sudden it reveals the spending
30:06capacity of the UK of even European countries as long as the ECB was there
30:12to back stop them of Australia of Korea of China of Japan I mean everybody spent
30:18a lot of money and the reason that they could do it is because they can issue
30:24their currency and they are able to buy whatever's available and for sale in their currency so are there countries
30:32that are more vulnerable to uh a depreciation if their currency gets weak
30:38and they have to import Goods like food medicine uh Energy Technologies and you
30:45have a sharp depreciation in your currency and you're dependent upon the rest of the world for those critical
30:51Imports then you're going to pay more for those things doesn't mean you can't get them but it may mean that you're
30:59going to acquire them only at higher and higher prices and that could be
31:04inflationary yes that is something that we have long recognized in mmt is that
31:11uh it is better to be energy independent or to have sovereignty in food in energy
31:17and medicines and technologies that better protect you from the risk of
31:23exchange rate fluctuations and your ability to run your domes IC policy full
31:29employment price stability without having to be fearful of not being able
31:34to acquire needed Imports or only at higher prices so it's a much more
31:40complex thing than just saying you know because you have your own currency you can have everything we we don't promise
31:48anything like that I mean listening to you speak it seems that we we're an agreement on a lot of things right we're
31:53we're in agreement on the need to um invest in in the productive parts of the economy to uh mitigate our um Reliance
32:02on on the finance sector you know we're in agreement about the role of of I guess American Supremacy and the sort of
32:09freedoms that allows America I I wonder then are our differences then merely semantic the
32:17fact that I will talk about taxing the rich in order to pay for something and
32:22in your view that is discursively unhelpful because it it obscures the
32:28role that central banks play in in creating the money essentially and the money's already there I would say it
32:34differently I I think that it's unhelpful because it's unhealthy to
32:40Center the rich in our Collective pursuit of well-being that when people
32:47do this thing and they say well look I just woke up this morning to headlines that the labor party is scrapping now
32:54you can correct me cuz you're you're closer to this issue these issues than I am but when I woke up this morning I saw
33:01headlines that said the labor party is backing away from three tenants of its
33:07uh proposed Revenue raising right it it was going to close tax loopholes it was going to go after the rich in these
33:13various ways and now the party has decided actually no we can't do those
33:18things so as they back away from these pledges to go after Revenue by taxing
33:25the rich it robs them of the money they think they need to hire more nurses and
33:32more teachers and to do all of these other things so what I'm saying is and what mmt is showing us teaching is to
33:40say you don't need the rich or anyone else and you don't need the revenue from
33:46higher taxes in order to quote pay for the spending that you want to do and if you believe that you do and you do as
33:53the labor government has been attempting to do which is to lay out uh a plan and
33:59say we want to spend this much money and here's how we're going to pay for it we're going to get revenue from all of
34:06these tax increases and you match it up and it's all paid for and it won't increase the deficit what's I've always
34:13believed is first that's unhealthy to Center the rich in that way and to say
34:19the only way we're going to move forward on these spending priorities to invest in people in the health system and
34:26education so forth is is if we can successfully claw enough money away from the rich and once we get that Revenue
34:34then we'll have the money to be able to start tackling these other problems I think that's a problem we've just seen
34:42why it's a problem it doesn't work the votes aren't there you don't have the political support to do it so now what
34:49all of these other priorities just fall by the wayside because you don't have the political will to tax the rich I I
34:57think that's a big political problem is that it tends not to work and it didn't work here in the US either when the
35:04Biden Administration wanted to do its build back better agenda and President Biden said I don't want to add to the
35:11deficit so we're going to pay for all of this we're going to have child care and elder care we're going to have a care
35:16economy plus infrastructure and climate and all the rest of it and because I don't want to add to the deficit we're
35:23going to get all the revenue from raising taxes on corporations and wealthier people and the votes weren't
35:30there even Democrats wouldn't vote for it so all of those uh care priorities
35:37fell by the wayside because we couldn't muster the strength to do it this is a
35:43really important one because people will often say mmt is somehow like a permission slip to
35:50not tax the rich and that's not it at all okay um what we don't want is to say
35:59that we won't move forward on important priorities investing in health and
36:05education in climate what we don't want is to say we're we're not going to be
36:11able to move on any of those objectives unless and until we can get the money
36:17from the wealthy to pay for it all that's what we want to do we want to break that link and and almost create
36:25two separate fights okay inequality wealth income inequality has
36:32grown so to such an extreme it is so unequal that it's unhealthy not just for
36:39the functioning of our economy but for the functioning of our democracies we need to rebalance the
36:46distribution of wealth and income and power and the power that goes with it so
36:52absolutely have that fight close tax loopholes go after
36:58um you know people who abuse the tax system change uh tax rates in ways that
37:04you think will make uh the tax code more fair and Equitable and deliver better
37:10outcomes and all that have that fight but don't
37:15bind other priorities to your success or failure on that front because if you
37:22can't get where you're trying to get on the tax fight if you can't get all the Revenue that all of the tax increases
37:31would generate and then you can't say okay well I've paid for everything so now we can make the investments in
37:37health and education then what's very likely to happen is that you won't ever
37:42tackle those other problems because you'll find that it was just
37:48politically uh not possible that the votes weren't there and you you didn't
37:55have the political will to push up the taxes and so you said well then I guess we have to abandon everything else and
38:01what mmt is trying to say is have those fights but separate them don't bind them
38:07together so that the only way you allow yourself to move forward with the spending proposals is if you can be
38:15successful on the tax front I would still as an mmt economist
38:20I would still object to framing things in a way that says uh you know the
38:28revenue that government collects from us is used to pay for X Y and Z because I
38:35know as an economist and someone who understands the monetary system and the operations I know that's not how it
38:41works so the academic side of me would still kind of grit my teeth and go yeah I don't want to say that because I know
38:47that's not how it works but I might be you know sort of quiet about my
38:53objection if I thought that um in spite of the fact that it's misleading at
38:59least it's going to help get us to the place where we all want to be which is you
39:05know better investments in education and health and tackling climate and so forth
39:11I could grit my teeth and say all right let them pretend that the rich are going to pay for everything and and as long as
39:17we get the Investments I'll just you know be quiet about it my frustration is that I've lived long enough and watched
39:24these uh efforts to know that it doesn't work it just politically it it has not
39:31borne fruit um and that's why I I'm so insistent that we separate these fights
39:38because I have for too many years watched the progressive agenda Fall by
39:44the wayside because of the insistence that you have to be fiscally responsible
39:51and play along with the pay for game and uh you know say well we'll get all the
39:56money we'll just get it from the rich people and there we go we'll pay for everything and I've just watched it fail
40:02over and over and over again so I suppose my my provocation would be this
40:09which is listening to that it maybe seems like an attempt to deal with a
40:14political problem which is the weakening of class politics so not the weakening
40:21of class inequality that's become stronger but the weakening of class Consciousness and a
40:28explicitness about about class in politics and so mmt sort of says okay
40:33well well we'll deal with that by making it as scary as a spreadsheet so we're not going to be talking about the um
40:41where the compromise between labor and capital is we're not going to be talking about um you know attacking
40:49concentrations of wealth we're not going to be talking about um you know a a
40:55parasitic uh you know CL of rentiers just you know sucking all the money up and out of public institutions we're
41:03going to make it something which comes across as a bit technocratic so it doesn't scare people um and if that's my
41:10provocation my my suggestion would be this is that it's not the packaging of
41:17the politics that's the problem in fact the need is is to renew and revive class
41:24politics to make any of this stuff happen look I think here here's here's my response to that then I think that
41:31mmt and I I will speak for myself specifically because I've given some of these talks you know I gave a a talk at
41:38a inaugural conference called the tax the rich conference and so I went in
41:44there and I gave the the strong pitch for why we should tax the rich much more
41:51heavily but not because we need their money and so I know that for mmt
41:57economists it isn't the case that we say well we don't need to tax the rich to get Revenue to pay for programs and
42:04therefore we can sort of ignore the um the the dangers the threat that comes
42:11with these you know Rising uh inequities and concentrations of wealth and power
42:17and class uh and all the rest of it not at all I think it's exactly the opposite
42:23which is so ironic so I'll give you just an example Senator Elizabeth Warren I
42:29don't know how many of your listeners are familiar with Elizabeth Warren but I think most people would probably say a a
42:36Bernie Sanders Senator Bernie Sanders a Senator Elizabeth Warren probably come to mind for most people as the two most
42:43Progressive members of Congress probably the two most class conscious members of
42:49Congress and both of them have proposed things like a wealth tax and taxes on
42:55financial speculation and all that sort of stuff that I think would be probably
43:01uh appealing to you and to sounds like many of your listeners now when I heard
43:06about Senator Warren's wealth tax proposal and this was back you know
43:122020 I guess when she was running for president and she was saying look with a
43:17with a little itty bitty tax on the wealthy we could just have a tax of you
43:23know 2% on uh wealth 50 million and higher
43:29and then we add an extra 1% when they get to a billion so it becomes 3% on
43:35wealth uh of a billion or more we could take the revenue that we would get from
43:40that wealth tax and we could have affordable child care we could cancel some student loan debt and she said and
43:46you know what the wealthy won't even feel it they won't even feel it because
43:52their wealth accumulates at a rate far above 3% perom so they're still going to
43:59get richer and richer and richer to which I said then what is the point then
44:04what is the point of a wealth tax if it isn't to aggressively get at
44:10concentrations of wealth and income and the class you know uh the power and
44:16everything that goes with it it be because the answer is it's just to pay for it's just you're peeling off just
44:24enough to barely touch them to say I have the revenue to pay for my uh
44:30programs around child care or whatever when I'm telling you that mmt is about
44:36separating these fights so that your tax conversation is not
44:42intricately bound to the spending proposals then you don't say well I want
44:48just enough Revenue to cover the cost of what it is I'm trying to do you separate
44:53the two and you say what is it I want to accomplish in terms of dealing with
44:59people like Elon Musk or Peter teal or who whomever you perceive to be too
45:06wealthy in society and to have too much power and too much uh control over the
45:12lives of other people and to rebalance distribution between capital and labor
45:17and get I think you have uh a much stronger Ally in mmt and in that
45:24framework when you're able to break yourself free of looking at tax for the
45:31sake of Revenue and pay fors and you just say let's just talk about how we
45:36want to reshape the tax code and and so forth to address all of these other sorts of
45:42things why do you think it is that mainstream economists have been so uh resistant to taking mmt
45:49seriously because mmt turns on its head almost every
45:57core assumption uh in mainstream economics I
46:05mean it's you don't want somebody to come in and tell you that at at the root
46:11of your discipline you have you have gone in the wrong direction from the
46:17get-go on almost every front that's not that's not you know or or what about
46:24governments what about um you know people who who work for the treasury or you know people who work for Center left
46:30parties I suppose the thing I'm asking is that if what mmt provides is a
46:36win-win win right you get to turn the public spending Taps on you get to build all this infrastructure and you get to
46:43do it potentially without having these big fights over wealth taxes which scare away the rich why aren't more
46:49center-left parties embracing it wholeheartedly um well I think I think
46:54it has been embraced I think it was embraced during covid I think it became
47:00clear you know the headlines all over the place here whether it was Bloomberg or the Wall Street Journal of the New
47:06York Times ran some version of where all mm teers now uh look look years ago do
47:13you know I don't know how many people your listeners are familiar with the economist John Kenneth Galbraith but he
47:20was one of the most important influential economists of the last century right a good oldfashioned
47:27Keynesian his son is James galbreth also an economist and uh Jamie as I call him
47:35because he's a friend wrote a piece many years ago in the nation magazine called indefensive deficits and Jamie answered
47:44I think well your question which is what why do people oppose it well first of
47:50all it doesn't promise a free lunch it isn't a win-win winwin there are losers and Jamie's point in that article in
47:57defensive deficits was that government deficits compete with the private sector
48:04for finance so here here's the argument banks in particular don't like
48:10government deficits because they compete with
48:15banks who would like to lend people money for the sake of allowing them to
48:21spend where a government deficit is putting the money directly into your hands you Own It Free and Clear you
48:28don't have to pay it back right on the other side of every government deficit lies a surplus for someone else that's
48:35yours you own it free and clear what banks do is lend money with interest and
48:42so when government deficits are very large as they were with covid and the government was sending people checks and
48:48increasing the amount that they paid to the unemployed and all the rest of it people were flush with cash many people
48:56had money left over at the end of the month for the first time in their lives they could save a little bit they were
49:03able to get by without relying on borrowing so it isn't the ca I mean you
49:10can understand why not everyone is enthusiastic about mmt and its defense
49:17of public deficits because it does um it
49:23does create in a sense losers somewhere else else and Jim's argument was that it
49:30challenges the lenders right Financial lenders in a way that they don't like I
49:37mean one of the uh outcomes of um covid spending particularly in the UK was that
49:44it made rich people even richer even more quickly than they were before um so
49:50yes it you know money got put into the pockets of people as you say who may not have ever been able to save before but
49:57in terms of the impact on overall inequality it widened right you had the
50:03you know you had more billionaires I think at the end of the crisis than he did before um how how does I guess um
50:14that outcome square with the broader political mission of dealing with these
50:22inequalities because if you're saying okay well like one of the reasons why we should embrace m is because it takes it
50:28takes the the um wrangling over taxation out of it um what what do you say to or
50:35what do you do in the face of um the fact that inequality widened over that period of time rich people got even
50:41richer even even FAS I think we have to look by country and we have to be specific about what period of time we're
50:48looking at I mean we had widening inquality in the US for the better part
50:53of my Lifetime right uh without an infusion of covid spending and more and
51:00more going to billionaires and so forth we also had uh about 40% of all the kids
51:06who were living in poverty lifted out of poverty in one year right because of the
51:11expansion of the child tax credit in the US we also had real wages beginning to
51:17grow over the course of the last 15 months or so real wages have been
51:22increasing in the US now prior to covid real wages had been stagnant I mean this
51:28was a talking point of Senator Sanders during his two presidential campaigns that since
51:341973 the real median the real wage for the median worker in this country hadn't
51:41budged for centuries so we've had uh
51:46longstanding Trends in income and wealth inequality that um we have to tackle not
51:54just as a result of you know know the blowout in uh you know what's happened
52:00with Equity markets and uh billionaires getting richer and richer
52:07postco um but these are these are not new trends and they're not related to
52:12the spending um that was done excuse me Fiscal expansion because of covid we
52:19have to tackle these and this is why you know mmt is not about setting aside the tax fight it is that that is important
52:28it's just as I said you don't link it to your spending priorities I mean I've got one final question and is to sort of
52:34circle right background to something that you said at the beginning you were talking about the pursuit of Full Employment the possibility of something
52:40like a jobs guarantee um the first thing is is why a job's guarantee over
52:46something like Universal basic income um what's what's the benefit of one over
52:52the other and then the second thing is really is the purpose of a job's guarantee so that the state has more
52:58power to shape its own industrial strategy and to direct labor towards
53:05bits of the economy that it would like to see become more productive that maybe you know private Capital isn't investing
53:12in as much as it ought to be so that's the last part I don't think that's what we have in mind uh with a job guarantee
53:19if you want industrial policy if you want largescale investments in manufacturing and climate and all the
53:27rest of it you should just hire those people and do those things that should just be part of uh you know regular
53:32government programs make those Investments uh do those contracts hire
53:38people if you're going to do it directly uh get people hired indirectly if you're going to you know put out a bid and have
53:44the private sector engage in those things that's completely separate from a job guarantee so the job guarantee is
53:52there look government should try to orient its economic policy fiscal policy
53:58set your tax dial get the tax code the way that you want the tax code to achieve outcomes like dealing with
54:06income and wealth inequality and closing loopholes and fairness and all that get the tax code the way you want the tax
54:12code um set spending to achieve objectives with inflation risk in mind
54:18so set fiscal policy dials uh that way try to get the economy as close to Full
54:24Employment as you can using fiscal policy and then recognize that there are
54:29always going to be people who get left out it doesn't matter if there's one job vacancy for every job Seeker there's
54:37going to be a mismatch there are going to be people who don't have the skills to fill the jobs that are available you
54:42don't uh you know have jobs in the geographic regions where they're needed whatever they're going to be millions of
54:48people who want to work want to contribute and cannot find a job
54:54anywhere else in the economy that is suitable so what we've said is the
54:59federal government should then ensure that anybody who's ready willing and able to work can be employed at some
55:08base wage benefit package federally funded locally administered because
55:14every single one of those people is you know a bundle of energy and
55:21willingness and a a fellow citizen who wants to contribute in some some way but
55:27but has been locked out of that opportunity why it's cruel let them work
55:33let them contribute uh allow them to do something useful in the community and that's what the job guarantee is in part
55:40about but it's also about um providing Better Price stability so that you know
55:48when the economy goes through a business cycle and the you know downturn begins
55:53and employers start laying workers off a job guarantee absorbs those workers they
55:59don't become unemployed they can transition into the federal job guaranteed program have their skills
56:06either maintained or upgraded they remain employable because the last
56:12person uh an employer wants to hire is an unemployed person they would rather
56:17hire somebody from their competitor pick them off at higher wages which has the
56:23potential to be more inflationary than if you maintain a pool of employed workers out of which the private sector
56:31can come and hire uh when they're ready to staff back up so it's more efficient
56:38it's more Humane um it's makes more sense
56:43economically socially right all of the tensions that uh happen when people
56:49experience unemployment heal better worse Health outcomes more crime I mean
56:54the whole gamut right it just for all those reasons makes more sense to us to
57:00have this program now you mentioned uh a basic income why not just give people
57:05money well you don't have many of the benefits that I just described and I
57:10think you know in light of the inflation that we experienced recently and the way
57:19that it has been spun by many as uh simply the result of doing exactly that
57:25giving people money in a time of Crisis that that's why we got the highest inflation in 40 years I think Ubi is
57:33just a much heavier lift now even than it was before and I think it was a heavy
57:38lift before but I really feel like uh politically it's going to be harder for
57:44those who Advocate a Ubi uh because it's just they give people money and the job guarantee
57:51increases both output Supply and Demand
57:56by paying people a wage to help increase the production of whether it's child
58:02care or food or whatever it is and so I think there are just benefits on the job
58:08guarantee side that aren't there on the Ubi side and I think you know for better
58:13or worse it's it's going to be a a heavier lift for Advocates of Ubi
58:19because of the inflationary episode it's not that I'm opposed and I
58:25think most mmers uh have embraced both over the years that we should have both an income
58:34guarantee in the form of something like a basic income support for people who as
58:39Martin Luther King Jr put it for those who cannot or should not be working and that can be defined as broadly as you
58:46like it could include new parents it could include people who have to care uh or want to care for you know a relative
58:53or something you can you can Define that but we we definitely think that you know
58:58it should include uh the opportunity for people who want to work to have the right to a
59:05job as well Stephanie Kelton thank you so much for joining us today thank you for having me
59:14[Music]
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