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The Deficit Myth

Modern Monetary Theory and How to Build a Better Economy
Narrated by: Stephanie Kelton
Length: 10 hrs and 52 mins
Categories: Money & Finance, Economics
4.7 out of 5 stars (84 ratings)

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Publisher's Summary

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.

Any ambitious proposal - ranging from fixing crumbling infrastructure to Medicare for all or preventing the coming climate apocalypse - inevitably sparks questions: how can we afford it? How can we pay for it? Stephanie Kelton points out how misguided those questions really are by using the bold ideas of modern monetary theory (MMT), a fundamentally different approach to using our resources to maximise our potential as a society.

We've been thinking about government spending in the wrong ways, Kelton argues, on both sides of the political aisle. Everything that both liberal/progressives and conservatives believe about deficits and the role of money and government spending in the economy is wrong, especially the fear that deficits will endanger long-term prosperity.

Through illuminating insights about government debt, deficits, inflation, taxes, the financial system and financial constraints on the federal budget, Kelton dramatically changes our understanding of how to best deal with important issues ranging from poverty and inequality to creating jobs and building infrastructure. Rather than asking the self-defeating question of how to pay for the crucial improvements our society needs, Kelton guides us to ask: which deficits actually matter? What is the best way to balance the risk of inflation against the benefits of a society that is more broadly prosperous, safer, cleaner and secure?

With its important new ways of understanding money, taxes and the critical role of deficit spending, MMT busts myths that prevent us from taking action because we can't get beyond the question of how to pay for it.

PLEASE NOTE: When you purchase this title, the accompanying reference material will be available in your Library section along with the audio on our desktop site.

©2020 Stephanie Kelton (P)2020 Hodder & Stoughton Limited

Critic Reviews

"The best book on rethinking economics that anyone will find right now." (Richard Murphy, political economist and author of The Joy of Tax)

What listeners say about The Deficit Myth

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Essential reading/listening

I am so shocked at my own ignorance. Thank you for enlightening me on how our government’s finances really works. I now understand that government funding isn’t from taxes but is created by the government itself, and the government’s “deficits” are just how much extra money is left in the economy after taxes. It’s ridiculous this wasn’t something i learned while studying economics at Uni in the 90’s. I can only hope this book changes the way we discuss government spending moving forward. Thank you again.

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Great read and excellent explanation.

This is an excellent book introducing Modern Monetary theory, one drawback was the highly American perspective, which is understandable considering the author is American and the US is a great example for MMT. Would have liked more detail on the theory and less detail on the current issues facing the US.

1 person found this helpful

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    5 out of 5 stars

Clear, concise, and wonderfully written.

This is the easiest book on macroeconomics that you'll ever read. The book is empowering and gives you the information you need to imagine a better world.

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Everyone should hear this

Inspiring. Would be transformational if adopted. Lots of great analogies that make the concept understandable. Come to New Zealand Stephanie and let's implement MMT here as a model. We already have some progressive thinking with a Treasury Living Standards Framework and Government Wellbeing budgets but their implementation is still constrained by conventional economic thinking. Fingers crossed the powers that be would be open minded enough to listen and scrutinise MMT. We have MMP that has transformed our political system by giving everyone's vote a meaning. Let's introduce MMT for all the reasons you suggested in your outstanding final chapter.

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"Game Changer" is too easy to say

Once the concepts click into place, the whole way you look at currency and monetary policy changes. It's a robust and revolutionary concept explained beautifully. I don't just recommend this book to you, I think everybody should read this. Thanks SK. Much Appreciated. Arlo.

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This is an important and must read book

Regardless of your political persuasion, gaining an understanding of MMT and it's application in our ever changing world should be mandatory for everyone with the right to vote. Stephanie does a wonderful job of making the educational experience interesting and engaging. This book will change both your understanding and views of how governments should spend and mange money.

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Easy, Informative, Important.

I would recommend everyone listens to this book. The ideas discussed impact on everyone. Stephanie patiently goes through the deficit myth in an incredibly accessible way. This will turn your understanding of how the government works on its head. It will both frustrate and inspire you. This is a knowledge everyone should have.

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Very interesting idea

The concept of MMT is presented well in layman's terms, but without a good understanding of macro economics it is hard to validate or criticise the concept. I'm afraid that most people will read this and be swept up by the moralising without understanding exactly how and where this may or may not work. I do have some concerns about the applicability of this concept to developing nations. Kelton pretends to address this with a short piece in one of the chapters, but Kelton's solution is squarely aimed at helping the US, not the billions of poor people not living there. In particular, I have some concerns about how the balance of trade (which will surely be strengthened by universal employment) can be weapon used to maintain existing US hegemony. On the other hand, if China and India employs this concept and raises their productive output proportional to their labour capacity, then the West has no chance to remain dominant global powers. Being new the concept, I really like this as way to move towards Universal Basic Income, without jumping into it fully. However, I do believe that Kelton and others are overly idealistic about the complexity of managing a massive state-funded workforce. Having seen how hard it can be to manage performance (value addition) from some people who are "willing to work", I believe that this proposal will need to answer how to keep the state employed productive. Unfortunately Kelton deviated from her economic message toward to the end to take her moral message of universal employment to other fields that she is not an expert in. This smacks of virtue signalling and is disingenuous from an economics stand-point. Recognising that we need to prioritise environmental concerns from an economic perspective is good. However, proposing solutions is not in her remit and pushing the renewable agenda is presumptuous.

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excellent. just need all politicians to read it.

the challenge is now to get politicians to read, understand and implement policy decisions. In Australia the federal govt can invest in the waste and recycle industry to create industry inputs, change laws to require industry to use those recycled inputs, fund equipment transition; invest in greening australia by creating paid jobs to design and roll out environmental solutions; and restructure the age care and ndis from 'for profit businesses' to not for profit businesses and Govt. businesses and replace a mostly under trained casual workforce with full and part time jobs inclusive of training to grow skills in this demanding field. Funding people and plant care is critical not optional. Much opportunity awaits a leader with vision, rather than a book keeper.

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This changes everything

A truly mind-bending 180 on what we all thought were the constraints on government spending. The opportunity costs we’re currently missing out on are unfathomable. We need every person to listen to listen this message and pressure our lawmakers to do better. Please listen to this book and pass it on .

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  • O. R. Jones
  • 30-08-2020

Changes the way you think about public money

An excellent summary of MMT and really makes you question how we could run government fiscal policy.

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  • Anonymous User
  • 12-07-2020

Great take on MMT

The book is well written and presented in a way that generalists can easily follow. It is entertaining and easy to read. The content is well researched.

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  • Allan
  • 07-07-2020

MMT - what is it? Find out here - worth a listen

A well written book on a topic I did not know much about. Good thought provoking concepts presented in a very easy to listen way. Felt it went away from the basic MMT theory for some of the later chapters and became more of a wish list. It is - by design- mostly focused on the position of MMT for large nations / reserve currency issues etc. Would have been interested in how effective MMT could be for small nations that have to pay in another currency for needed items they can not produce - but understand this may be beyond the scope of this book. Overall a very useful listen - I don’t necessarily agree with everything- but very glad I listened to it. Enjoy

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  • SwissTony
  • 09-09-2020

A sophomoric fantasy.

In essence you can print as much money as you like as long as you don't cause inflation. This is true if we can agree what inflation is and how we can measure it but we can't and the warped CPI measure used now will only become more fraudulent when it has to remain low or frustrate the cherished dreams of a thousand politicians. Like telling the alcoholic that they can drink as much as they like as long as they don't damage their liver or telling the serial adulterer they will be fine just as long as they don't get caught. Kelton tells us we can do the economic equivalent of playing in traffic on the freeway as long as we don't get run down. Hayek's Maxim springs to mind: The curious task of economics is to prove to men (and women) how little they know about what they think they can plan.

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  • Andrew Levi
  • 18-06-2020

Compelling and exceptionally clear

This is a compelling and exceptionally clear explanation of the disastrous effects of the financial myths which distort the management of the economies of the US and other countries. Governments which issue their own currency can’t run out of money. They can always pay for anything they decide to, in that currency. As long as they don’t stoke inflation. Due to the myth that currency issuing governments must budget - and fear bankruptcy- like households, nearly all major economies are run chronically well under their capacity. So, for countries with abundant real resources, and their own currency, the inflation risk is unlikely to be a major constraint. By attempting, inappropriately, to balance budgets, or run surpluses, governments are destroying value in their economies, and failing their societies. JFK, John Maynard Keynes, Alan Greenspan, Ben Bernanke and others have all understood this, and said it. Now we should all do the same.

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  • Amazon Customer
  • 27-06-2020

Happening whether you like it or not

A great explanation of money printing and its possibilities. The public job creation proposals are nebulous, but there's no doubt that mmt can be used to rebuild a Sovereign issuing economy. but what about non Sovereign economies? And doesn't this just reinforce the Dollar milkshake effect?

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  • Steve Wright
  • 31-08-2020

Great economics but weak of prescription

Good detail at the front end of the book but narrative becomes repetitive and some of the anecdotes a little mundane . I totally support the thesis; austerity is an economic curse but the author struggles to progress from description to prescriptive solutions that do not read like a political manifesto.

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  • J Myburgh
  • 23-08-2020

Interesting perspective on a complex subject

Interesting perspective on MMT however about 3/4 into the book it becomes a bit lost in other deficits (housing, education, environment etc). It also felt like a wish list without real though on how to make it happen. Perhaps too a complex subject to try and solve in a book but still worth listening to, just to get a different view of monetary issues.

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  • Dr. P. Stevens
  • 05-07-2020

Engaging and topical

There are naturally many questions unanswered by this book, but that just makes me want to learn more about the theory. We should all hope it is correct, because we really need it to be! Well read by the author.

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  • Kindle Customer
  • 14-06-2020

A very important book

This book may redefine public discourse on economics in the years to come. God knows it's long overdue! Kelton's narrative is compelling and written in lucid, easily accessible language that will leave many reassessing the grotesque austerity of the past decade. A rare book in that having read it I suspect many will conclude: "this changes everything".

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  • Mr David Pridgeon
  • 12-06-2020

Brilliant

This was a wonderful explanation of the truth of deficits both false and real. MMT is more than a lens, it a Hubble telescope to open up the economic universe

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  • Anonymous User
  • 06-10-2020

well written, poorly reflected

the author entirely neglects the history of fiat currencies and human psychology, she does not look far enough back in history to see that all fiat currencies eventually go to zero before shooting up a bit as a collectable item for historians staying aware of hyperinflation. She does adress many things relevantly but then uses the arguments in counter of their actual conclusions. Though she does adress the power concentration currency issuing causes she fails to see how power concentration is detrimental to a free economy where it's participants are happy to participate in. I would like her to go deeper into how psycology affects our economy where she might find that her arguments are working in counter of her intent. What she is suggesting as a monetary and economic model is just the same as you have in many online games where you have money drains and money fossets. this works great for a game because it is an inpermanent state you immerse yourself in and it is optional to take part of their system. But real life is not a game, there are real limits to how many resources we have, and money is also influenced by supply and demand just like our resources.

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  • Amazon Customer
  • 25-09-2020

Behind the myths: How the economy REALLY works

A sophisticated but easy to understand look at how the economy really works and what is possible in a world that looks beyond infantile economic myths and narratives