The Deficit Myth

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Ambitious proposals, from fixing infrastructure to Medicare for all, often raise the question: how can we afford it? Stephanie Kelton argues that these concerns stem from a fundamental misunderstanding of government spending, drawing on modern monetary theory (MMT). She asserts that both liberals and conservatives are mistaken about deficits and the role of money in the economy, particularly the belief that deficits threaten long-term prosperity. Through her insights on government debt, deficits, inflation, taxes, and the financial system, Kelton reshapes our understanding of addressing critical issues like poverty, inequality, job creation, and infrastructure development. Instead of fixating on how to fund necessary societal improvements, she encourages us to consider which deficits truly matter and how to balance inflation risks with the benefits of a more prosperous, secure, and sustainable society. By challenging conventional wisdom about money, taxes, and deficit spending, MMT dismantles myths that hinder progress and encourages us to rethink how we approach funding essential initiatives.