Publishers Weekly
04/27/2020
Kelton, a professor of economics at SUNY Stony Brook, debuts with an accessible introduction to modern monetary theory (MMT) and its implications for public policy. According to MMT, the American government, as monopoly issuer of the U.S. dollar, can print and spend money as it sees fit, without undue concern for runaway inflation or ballooning national debt. Lawmakers and economists who maintain that the government should operate like a household (by balancing tax revenue and spending), Kelton writes, mistake the real usage of taxes (not to fund public services, but rather to create demand for currency), and employ the “deficit myth” mainly to avoid funding projects to which they’re politically opposed. She also undercuts common notions about unemployment and inflation, and argues that a new, MMT-based economy could help to mitigate climate change and eliminate trade wars. By placing a greater emphasis on “full employment,” Kelton writes, the government could spend money to create meaningful jobs while also providing health care and better public education. Kelton writes clearly and directly, and does well to keep the lay reader in mind throughout. This comprehensive, lucid explanation of a much-buzzed about economic theory will resonate with progressives. (June)
From the Publisher
"Kelton writes clearly and directly, and does well to keep the lay reader in mind throughout. This comprehensive, lucid explanation of a much-buzzed about economic theory will resonate with progressives."—Publishers Weekly
"Stephanie Kelton is among the most prominent of the dozen or so economists associated with MMT. Her new book The Deficit Myth is intended to bring MMT to a broader audience. In addition to an impassioned call for a bigger, more active public sector, The Deficit Myth contains a number of distinct economic arguments."
—The American Prospect
"Clear and vigorously written book."—Foreign Affairs
"She has succeeded in instigating a round of heretical questioning, essential for a post-Covid-19 world, where the pantheon of economic gods will have to be reconfigured."—The Guardian
"Kelton and her colleagues have brought a great many non-economists into the economic conversation in a way that no other contemporary branch of heterodox economics has been able to....[Sh]e's dead right about a central political fact of our times: A large, active public sector is more needed today than ever, and unfounded fears of public debt are a big reason we haven't gotten it. Which means her eloquent, accessible book is performing an important public service."—The American Prospect
"Kelton certainly offers food for thought at a time when governments are spending eye-watering sums to mitigate damage from the coronavirus pandemic."
—Spear's Magazine
"The big thing she gets right is in the way she structures her book around our current beliefs. In addressing our current understanding of how the world works - interpretations she identifies as myths - Kelton leads us step-by-step towards a new understanding of how federal spending works."—Inside Higher Education
"Stephanie Kelton convincingly overturns the conventional wisdom that federal budget deficits are somehow bad for the nation. ...Kelton argues that our government's inability to provide for citizens isn't due to a lack for money; instead, our leaders lack political will."—Farhad Manjoo, The New York Times
"The Deficit Myth is simply the most important book I've ever read. Stephanie Kelton carefully articulates a message that obliterates economic orthodoxy about public finance, which assumes that taxes precede spending and deficits are bad. Kelton's work is on a par with the genius of DaVinci and Copernicus, heretics who proved that Earth revolves around the sun."—David Cay Johnston, recipient of the Pulitzer Prize, an Investigative Reporters and Editors Inc. Medal, and the George Polk Award
"A remarkable book both in content and timing. A 'must-read' that is sure to influence many aspects of policymaking going forward."
—Mohamed El-Erian, chief economic advisor, Allianz
"In a world of epic, overlapping crises, Stephanie Kelton is an indispensable source of moral clarity. Whether you're all in for MMT, or merely MMT-curious, the truths that she teaches about money, debt, and deficits give us the tools we desperately need to build a safe future for all. Read it—then put it to use."—Naomi Klein, author of On Fire: The Burning Case for a Green New Deal
"Kelton's game-changing book on the myths around government deficits is both theoretically rigorous and empirically entertaining. It reminds us that money is not limited, only our imagination of what to do with it. After you read it you will never think of the public purse as a household economy again. Read it!"
—Mariana Mazzucato, author of The Value of Everything: Making and Taking in the Global Economy
"The Deficit Myth is a triumph. It is absorbing, compelling, and—most important of all—empowering. Embracing a well-researched framework that focuses on how real-world economies actually operate, she lays out a realistic path to true economic prosperity. It is an approach that focuses on Main Street and not Wall Street and will permit us to not only revitalize the struggling middle class, but address critical social problems like chronic unemployment, poverty, health care, and climate change. We of course face many binding constraints on our ability to act, but Kelton argues that the intentional underemployment of our own resources that results from the pervasive influence of deficit myths should not be one. We have needed this book for a very long time. Everyone should read it, and then reread it, before it is too late to change course."
—John T. Harvey, professor of economics, Texas Christian University
"Kelton's mission in this powerful book is to free us from defunct orthodox thinking about fiscal deficits rooted in the bygone era of the gold standard. Her theoretical canvas is modern monetary theory. At its core MMT offers a simple proposition: In a fiat currency world, the finances of we the people ain't the same as a summing up of our individual budget constraints, because we the people can't go broke, only deficit'spend our collective self into inflationary excesses. In the prevailing era of too-low inflation, the macro policy implication should be obvious: We the people presently have far more fiscal space than the deficit scold, pay-for crowd preaches. Kelton is a gifted writer and teacher and I confidently predict that The Deficit Myth, brilliantly written and argued, will become the defining book on what MMT is—and what it is not."—Paul Allen McCulley, retired managing director and chief economist, PIMCO, and senior fellow, Cornell University Law School
"Clear! Compelling! Eye-opening and persuasive, The Deficit Myth is an adventure in the world of budgets, jobs, trade, banking and—above all—of money. With the great force of common sense, Stephanie Kelton and the MMT team have broken through the closed circles of so-called sound finance, a stale orthodoxy that has weakened and impoverished us all. This book shows how they did it, and it blazes a path forward, toward a better world built on better ideas."—James K. Galbraith, The University of Texas at Austin
"A robust, well-reasoned, and highly readable walk through many common misunderstandings. A 'must-read' for anyone who wants to understand how government financing really works, and how it interplays with economic policy."
—Frank Newman, former deputy secretary of the Treasury
"[A] provocative, engaging, and thoroughly readable new book on modern monetary theory, economic policy, and job creation...Kelton... does a masterful job of challenging conventional wisdom with new facts, trends and data. You may not end up agreeing with her, but Kelton most certainly will make you think."—Larry Gennari, Boston Business Journal
“I really can’t recommend it (or time with the kids, for that matter) highly enough. It’s one of those books that seems counterintuitive until it suddenly clicks, after which it seems obvious. And if it’s broadly correct, which I think it is, then we have a much larger world of political possibility than we realize.”—Matt Reed, Inside Higher Ed
