Thread by @DeficitOwls

It's the finale, Day 8 of our online book club for @StephanieKelton's The Deficit Myth!

Today we're reading Chapter 8, and we'll post highlights below. Read along and post your favorite parts with the hashtag #TheDeficitMyth.

Happy reading🦉...

While describing a meeting with a Congressional representative, Kelton reports that he "winced, as if experiencing physical pain, as Mosler explained that the purpose of collecting taxes is to regulate inflation, that we never need to retire the national debt." #TheDeficitMyth

"the public’s understanding of the economy has to change. No member of Congress is going to bring about that change. We are." #TheDeficitMyth

Kelton strongly emphasizes that MMT is made up of a descriptive side and a prescriptive side. The descriptive side helps us set the terms of the debate for policy. #TheDeficitMyth

"The problem we have today is that economic policy is often prescribed by people who, despite holding advanced degrees in economics, possess no real understanding of how our monetary system works." Gloves off! #TheDeficitMyth

"That might sound like a free lunch. It isn’t. MMT isn’t a blank check. It doesn’t grant us carte blanche when it comes to funding new programs. And it’s not a plot to grow the size of government." #TheDeficitMyth

"We must end the cruel and inefficient practice of relying on democratically unaccountable central bankers to target the “right” mix of inflation and unemployment." #TheDeficitMyth

"Any amount of spending that is authorized by Congress will take place. The Federal Reserve’s elaborate network of primary dealers is there to guarantee it."

This is the reality MMT describes. #TheDeficitMyth

"We think of taxes as something the government needs (i.e., revenue) instead of remembering that taxes are there to subtract spending power from the rest of us so that the government’s own spending doesn’t push the economy beyond its full-employment limit." #TheDeficitMyth

Referring to automatic stabilizers: "Congress will always have the power to take discretionary action, but in an increasingly polarized political climate, we should make sure to include a hands-free feature as well." #TheDeficitMyth

"Today, the Federal Reserve defines full employment as a level of unemployment that leaves millions locked in a game of musical chairs, searching for jobs that don’t exist. MMT resolves the problem by directly funding employment for those without work." #TheDeficitMyth

Kelton gives the pitch for the Job Guarantee. We'll hold off from highlights here, because we're too eagerly awaiting Pavlina Tcherneva's new book, The Case for the Job Guarantee!

Using the steering wheel metaphor, Kelton reminds us that we're supposed to turn *into* a skid if your car is sliding on ice, just as the budget needs to turn towards deficit during a recession

This is life-saving because I haven't thought about "turning into the skid" in years!

"It’s important to recognize that MMT is not a panacea. It won’t fix our broken politics or force lawmakers to invest public money in ways that best serve the public interest." #TheDeficitMyth

"No US president should ever again claim that the government has 'run out of money,' and no reporter should ever let such a claim go unchallenged." #TheDeficitMyth

"Budgeting through an MMT lens would have us replace the artificial budget constraint that tells us to live within our financial means with inflation constraint that tells us to live within our biological and material means." #TheDeficitMyth

@StephanieKelton reminds us Keynes understood that "How To Pay For the War" was about real resources, not money.

But it goes farther than that: the US Treasury during WW2 understood this at the highest levels as well. See: global-isp.org/wp-content/upl…

"A just and more prosperous world—one that combines ecological sustainability with full employment, human well-being, a lower degree of inequality, and excellent public services that meet the needs of all—is within reach." #TheDeficitMyth

"We have let our imaginations become far too limited, and it is holding us back. We have been too restrictive in public policy out of unwarranted fears about numbers recorded in government agency spreadsheets. " #TheDeficitMyth

Closing out the book, Kelton argues that many of our current problems stem from failures of imagination. She asks us to imagine an economy that works better for all - and then to go out and build it.

#TheDeficitMyth is a great read, and you should pick up a copy!