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The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy
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The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy

4.13  ·  Rating details ·  3,401 ratings  ·  634 reviews
A New York Times Bestseller
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.

Stephanie Kelton's brilliant exploration of modern monetary theory (MMT) dramatically changes o
Hardcover, 336 pages
Published June 9th 2020 by PublicAffairs
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Michele No. The writing is straight forward, the language is jargon-free, and MMT is in itself an obvious and easy to understand concept.
Daniel Welch I would argue, yes to a degree. It's all about keeping a countries credibility, when your are a monetary sovereign country this is easier as you don't…moreI would argue, yes to a degree. It's all about keeping a countries credibility, when your are a monetary sovereign country this is easier as you don't have required foreign denominated debt obligations. But as long as the rest of the world views your debt as "reasonable" you can leverage it for investing in your people.(less)

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David Wineberg
Apr 09, 2020 rated it it was amazing
We’ve wasted a century looking at government as if it were a family or a business. It isn’t. As the monopolist controlling American currency, the government doesn’t ever have to worry about running out of money. It can always fund social security and Medicare, and many other programs besides. Instead of fiscal deficits, we should be looking at the deficits in society, because we can do everything to alleviate them with our currency power and expanded deficits. This is the essence of the powerful ...more
Roy Lotz
Deficits can be used for good or evil.

Robert Skidelsky, in his enormous biography of Keynes, remarks that economics today occupies the same position as theology did in the Middle Ages—as a complex a priori logic that can be used to reach any number of contradictory conclusions. The more I read in the subject, the more I agree with him. To be taken seriously in politics means being able to use this logic. And yet, despite the seemingly scientific nature of this language, we seem hardly better
Peter Tillman
I feel comfortable rating this book "of no possible interest" (to me) based on economist John Cochrane's review at the WSJ, aptly titled "Years of Magical Thinking": To clarify: I haven't read the book, and don't plan to. But Cochrane's review makes interesting reading. He wasn't impressed. And he is a professional economist, albeit a right-wing one.

Like many of you, I'd vaguely heard of Modern Monetary Theory (aka Magical MT), but payed little attention
Milind Hegde
Jun 18, 2020 rated it it was ok
I found this book annoying to read.

The central tenet of modern monetary theory (MMT) is that a monetarily sovereign government, like the United States and maybe a few more, creates currency and so cannot run out of it. In particular, deficits caused by spending in excess of taxation isn't inherently a problem, so long as the spending doesn't cause inflation, which isn't caused by excess currency but by a lack of real, physical resources and production to meet demand. This is definitely an inter
Jun 18, 2020 rated it it was amazing
I've been following Stephanie Kelton for some time and I think she's one of the smartest people around. The ideas in here are worth reading for anyone sucked into the deficit myth--the idea that we have to "balance the budget" or that the government's budget works like a household. I really appreciate how Kelton covers not just how the US budget works, but also how people on the Hill engage in "pay for" hackery when they know full well that they can just spend but that they need to show the CBO ...more
Sebastian Gebski
Jul 21, 2020 rated it it was ok
(a reminder: I'm NOT rating the MMT, but the book about MMT - there's a huge difference between these two)

I have a few significant problems with "The Deficit Myth":

1. The rhetorics are purely "American style" - which means: "if you repeat something 100 times, readers will treat it as truth, if you don't, they will forget it". Honestly, it felt like the author treats readers like idiots.
2. The initial 2 (or so) chapters were successful in presenting (in a very approachable way) the basics of fisc
Chaitanyaa From Teatime Reading
As I made my way through The Deficit Myth, I had to stop numerous times, because it felt like my political and ideological underpinnings were being shaken at their cores. The idea that government spending should not be measured and debated in parallel with a family budget made sense to me, but I didn’t understand how. This book explains complex economics and political posturing in digestible terms
It is a book that has the potential to transform public opinion, if it is read. So, I tell you today
Kumail Akbar
I was really looking forward to this book after having followed Professor Kelton on twitter, and after seeing the praise for this book there. However, this turned out to be even more disappointing than I could have imagined. When reading a book written by an economist, it is fair to expect the author to bring to their writing the methods usually employed by the same when publishing in journals. It is fair to expect the author to propose a model and cite its assumptions and limitations, to show h ...more
Zoltan Pogatsa
Jun 13, 2020 rated it it was amazing  ·  review of another edition
This book is probably gonna be the Piketty of 2020!
Very easy to read, lots of good examples, simple enough language for any intelligent person to understand.
Kelton, Bernie Sanders' economic advisor, proves how all the austerity of the decades of neoliberalism, including the handling of the eurozone crisis, was unnecessary and harmful.

The state does not run out of money. Money is not the bottleneck. Deficits do not matter. Output capacity matters. What matters is inflation. And inflation can be
Feb 29, 2020 rated it it was amazing
Shelves: netgalley-com
I'm not an economist, or even someone who is savvy about the topic of deficits. One thing I have learned over the years is that conservative politicians rail about the deficit - but only when the other side (Democrats, Liberals, etc.) hold the reins of government. Do a little research and find out for yourself which side usually runs up the deficit. The author is clearly a proponent of MMT, and she knows the subject well, making this book a must read for an introduction to the topic. ...more
Jul 09, 2020 rated it it was ok  ·  review of another edition
If you’re going to read this book, don’t worry if you come away feeling like Gertrude Stein after she visited Oakland.

Although I was disappointed in this book, there were some good points:

First, I listened to the Audible audio book, read by Professor Kelton. She has a pleasant reading voice, even at 1.5X. I especially enjoyed when she imitated teenagers and children talking about monetary theory and macroeconomics.

Second, it was funny. Maybe not intentionally so, but it was funny. My father used
Debbie Notkin
Jun 29, 2020 rated it it was amazing
Stephanie Kelton is an economist, an economics professor, and a proponent of modern monetary theory (MMT). I've been interested in MMT for a while, and I read a chapbook by Warren Mosler, often described as the originator of MMT. Mosler was persuasive, but also dense and confusing, and I reserved judgment.

What's MMT? Briefly, it is the belief that governments which issue their own currency ("fiat money") should never worry about debts and deficits, as long as the economy has the real material (
Jan 23, 2021 added it
Before beginning this work on Modern Monetary Theory (MMT), I must admit some preformed thoughts:

‘It works . . . until it doesn’t.’
That Dire Straits song ‘Money for nothing’.
Eddie Murphy in Trading Places, ‘In fact, champagne for everybody, courtesy of Billy Ray Valentine’.
My memories of Argentina’s alluring promises turned to failure – twice.

Professor Kelton does make an interesting case for expanding our thinking around the limits of federal spending and the allocation of our scarce resources
Sep 13, 2020 rated it really liked it
This is the sort of book that's capable of changing how you see everything about the way our societies work. A very well explained exploration of the myths that surround economics and the ways in which MMT seeks to refute them. I have no formal economics training whatsoever but having a little understanding of MMT under my belt, I found this to be exactly what I needed to read. We should all be listening to MMT economists instead of letting governments consign so many of us to unnecessary povert ...more
Gary  Beauregard Bottomley
The world changed hugely after this book was published and made this book somewhat superfluous. The pandemic happened and congress passed ‘The Care Act’ for dealing with the pandemic, and they magically created over one trillion dollars out of thin air. There was no talk about ‘bond fairies’, ‘paygo’, nor did anyone take seriously Republicans’ moaning ‘how are we going to pay for it?’. Nobody cared nor should they.

A sovereign state which controls their own currency can create money through fiat
Jun 16, 2020 rated it liked it
Important topics discussed but the style is really annoying:
-The book seems to argue that everyone is an idiot not understanding how the system works (particularly money creation and public debt).
-MMT is the solution to everything, we were just blind not to see it before.

Actually the ideas offered here are not new, MMT is just a brand created to help selling them (which is fine with me).

I think a better, shorter, more objective write-up on the topic is from Ray Dalio, and it is free to download
Robert Campbell
Aug 09, 2020 rated it did not like it
Repetitive shallow political rhetoric. Whatever merits or faults Modern Monetary Theory may have, you won't learn about them in this book. ...more
Sep 09, 2020 rated it it was amazing
How does the US Federal Government raise the money it spends to run its programs, conduct its wars and pay out unemployment benefits? It taxes and borrows, right? No, says this author, that's not how it really works. Since the Federal Government issues its own fiat currency -- "prints" it, as it's usually put -- it can never run out of money, so it really doesn't need to either tax or borrow. It can just spend. For a variety of reasons including the fact that that's the way it's "always been don ...more
John Mcjohnnyman
Jul 16, 2020 rated it it was ok
Shelves: politics, economics
My initial impression of MMT prior to this book was that it is purely magical thinking. After reading it, my thinking has changed but not necessarily in a supportive way.

Throughout the book, Kelton tries to stay grounded in reality by sticking to mantras such as "there's no such thing as a free lunch," but by doing so I think that she's just paying lip service to the antiquated thinking she's critical of. Make no mistake, despite raising some qualifiers to avoid having it sound too magical for
Shriram Venkataraman
Apr 29, 2020 rated it it was amazing
Most of soc dems and leftists already know that we can run massive deficits as the US government controls the dollar and we can't go bankrupt. Give it as a present to your liberal friend who is misinformed. If your friend is a right winger, don't worry about it. They are lost cause. ...more
A fascinating discourse on Modern Monetary Theory (MMT). Kelton is very persuasive and very clear in her arguments, and I found it easy to get on board with many aspects of this new way of economic thinking. The main sticking point for me is the inflation question, so I wish she'd used some real world examples in her analysis of that issue, but all in all this is a worthy read for econ/public policy nerds no matter where they reside on the political spectrum.

Jack Wilson
Oct 30, 2020 rated it really liked it  ·  review of another edition
I’ve always been frustrated by the federal budget and why it was such a big deal when we can print money... and how inflation would be effected as a result. This book satisfied my frustration and showed me the endless possibilities Modern Monetary Theory could have on the macroeconomy.
The unknowns, and potential issues, with MMT are not discussed in great detail and the writing comes across as a bit persuasive at times.
Odi Shonga
Sep 15, 2020 rated it it was amazing
As a layman to the arcane workings of economics, I’ve often had many questions that I’ve never been quite sure how to ask, never been quite sure how they’d be answered. One of these questions revolved around the difference between ‘natural costs’ and ‘financial costs’. It always seemed to me that they weren’t quite the same thing. The natural currency of the universe is energy. In order to build things, create things, keep people alive, etc, you need to get and spend energy — the whole conservat ...more
Stephen Sawyer
Jul 26, 2020 rated it it was amazing
I’m not an economist, but have had a lifelong interest in the subject. For many, many years I have been puzzled by a seeming disconnect between the “conventional wisdom” learned in business school economics classes and my own reading, and the way that economic systems actually work. In particular, nothing seems to be following the rules as laid down by Paul Volker, Milton Friedman and the Chicago School in the years since the financial crisis of ‘08; record levels of fiscal and monetary stimulus ...more
Feb 03, 2021 rated it really liked it
A tremendously useful, simple reassessment of the way money actually works, at least for fiat currency-issuing states. Kelton's account of Modern Monetary Theory (MMT) looks at money flows to and from the government - in short, spending before taxes and borrowing ("S(TAB)") as opposed to the traditional story of taxes and borrowing to fund spending ("(TAB)S") - means that deficits truly do not matter. Taxes are still useful for capping income and wealth, but the government does not spend "taxpay ...more
Jeff Kaye
Jun 12, 2020 rated it really liked it  ·  review of another edition
The Deficit Myth is an important game-changer in the world of economics. My university degree was in this field, but in the days of Milton Friedman and monetarism there was no understanding of the critical themes that Stephanie Kelton teaches. My days trembled at the sound of Margaret Thatcher, comparing the economy to her own house budget: never spend more that you earn.

Ms Kelton's teaching is that, for an economy that has control of its own money (such as the US and the UK), this is untrue. Th
Ross Tierney
Feb 02, 2021 rated it it was amazing
This was a really good primer on Modern Monetary Theory. (I feel proponents would do right to change the name as it's not so much a "theory" as it is an incontrovertible perspective... yeah, Modern Monetary Incontrovertible Perspective...) My experience of this book was like the experience of buying a new car and seeing it everywhere on the road: all of a sudden all lawmakers seem to be talking about is the deficit. MMT's perspective is crucial to understanding that so much talk of the deficit - ...more
May 25, 2020 rated it really liked it
Shelves: 2020-reviews

The Deficit Myth by Stephanie Kelton explains a revolutionary finance theory in easy to understand terms. It places the focus of government finances back where it belongs…on helping citizens. Highly Recommended.

Disclaimer: The publisher provided a free eARC of The Deficit Myth in exchange for an honest review.

For the full review and others, visit

Review: The Deficit Myth

How many times have you heard people try to compare the government’s finances to that of a household
Jan 24, 2021 rated it really liked it
A game changer. And once you see it you can’t unsee it. Really everyone should read this. In short, stop thinking of the federal governments budget like a household budget because it’s not. I can’t create money, the federal government can. Congress is not thinking about the nation’s budget with this currency issuer power in mind and it is to all of our detriment.

Wish there was an entire chapter on the federal jobs guarantee idea because it seems to be crucial to Kelton and other MMT economists’
Jun 09, 2020 rated it really liked it
***I was granted an ARC of this via Netgalley from the publisher.***

We all have been told about the dangers of the USA deficit. If it gets too large then our children will bear the burden and that is a sign that we are spending irresponsibly. One party wants to tax the rich to solve the problem while the other wants to cut funding for social problems. However, in the book, The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy by Stephanie Kelton, seeks to dispel those my
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Stephanie Kelton is an American economist and academic. She is currently a professor at Stony Brook University and was formerly a professor University of Missouri–Kansas City.

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Why not focus on some serious family drama? Not yours, of course, but a fictional family whose story you can follow through the generations of...
73 likes · 28 comments
“the government relies on two sources of funding: it can raise your taxes, or it can borrow your savings.” 3 likes
“The debt isn’t the reason we can’t have nice things. Our broken thinking is. To fix our broken thinking, we need to overcome more than just an aversion to big numbers with the word debt attached. We need to beat back every destructive myth that hobbles our thinking.” 1 likes
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