Thread by @DeficitOwls

It's Day 1 of our online book club for @StephanieKelton's The Deficit Myth!

Today we're reading the Introduction and Chapter 1, and we'll post highlights below. Read along and post your favorite parts with the hashtag #TheDeficitMyth.

Happy reading🦉...

This is the promise of MMT: that we can build a better economy. Nobody is saying it will be easy, or that there won't be challenges, but "finding the money" isn't the problem. #TheDeficitMyth

"Taxes are important for other reasons that I will explain in this book. But the idea that taxes pay for what the government spends is pure fantasy." #TheDeficitMyth

"Does [policy] control inflation, sustain full employment, and bring about a more equitable distribution of income and wealth? The particular number that falls out of the budget box each year was (and is) quite beside the point." #TheDeficitMyth

"Do I believe the solution to all our problems is to simply spend more money? No, of course not. Just because there are no financial constraints on the federal budget doesn’t mean there aren’t real limits to what the government can (and should) do" #TheDeficitMyth

Kelton cites a study indicating that our inadequate response to the 2008 crisis "cost every man, woman, and child in America the equivalent of $70,000." That is the danger of the deficit myth! #TheDeficitMyth

Kelton points out that the deficit myth is shared from right to left, with pols as diverse as Ronald Reagan and Bernie Sanders both publicly denouncing 'leaving debt to our grandchildren.' #TheDeficitMyth

"The reality is that government deficits don’t force financial burdens forward onto future populations. Increasing the deficit doesn’t make future generations poorer, and reducing deficits won’t make them any richer." #TheDeficitMyth

MMT does NOT say "deficits don’t matter, so we can throw caution to the wind and simply spend, spend, spend." #TheDeficitMyth

The introduction to this book should basically be required reading for anybody who wants to critique MMT. It hits a lot of myths and misconceptions in a very small space!

Ch. 1 debunks the myth that the government's budget works just like a household budget. This myth has "got a folksy, kitchen-table feel to it," but is "undoubtedly the most pernicious" one in the book. #TheDeficitMyth

The currency is a public monopoly, and the federal government is the issuer. Households, corporations, and state/local governments are users of the currency. One of these things is not like the others! #TheDeficitMyth

MMT doesn't just apply to the US, but applies to any nation with "monetary sovereignty" (which means more than just issuing your own currency). #TheDeficitMyth

"Because we’ve been trained to believe that, like each of us, the government must 'find the money' before it can spend, everyone becomes obsessed with the question: How are you going to pay for it?" #TheDeficitMyth

The model of government finance we've been trained to believe is (TAB)S: Tax and Borrow, then Spend. But we've got it backwards, the reality is S(TAB): Spend first, then Tax and Borrow. #TheDeficitMyth

"[Mosler] reasoned that spending must have come first, otherwise where would anyone have gotten the dollars they needed to pay the tax? Although the logic seemed infallible, I felt certain his story couldn’t be right." #TheDeficitMyth

Kelton telling her story of coming to MMT is extremely relatable. Every MMT proponent goes through a similar journey that starts with confusion and intense skepticism. #TheDeficitMyth

Mosler's "how to turn litter into money" story is recounted in full, by using a tax to get children to do chores in order to earn business cards. I still think this is a great model to explain MMT to newcomers! #TheDeficitMyth

"At the end of the day, a currency-issuing government wants something real, not something monetary. It’s not our tax money the government wants. It’s our time." Powerful and concise. #TheDeficitMyth

Eye-opening, mind-blowing fact from #TheDeficitMyth: the URL for the US Bureau of Engraving and Printing really is moneyfactory.gov, haha!

How does the federal government actually spend and tax? The same way the scorekeeper in basketball awards or retracts points. #TheDeficitMyth

The remainder of Chapter 1 explains why the federal government taxes and sells bonds even though it creates money from thin air when it spends. This question makes a lot of heads explode on the internet, so read carefully! #TheDeficitMyth

Finally, why do politicians keep promoting the deficit myths and imposing unnecessary constraints on themselves? Kelton says it's because they find it "politically useful." #TheDeficitMyth

Join us tomorrow for Chapter 2!