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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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Zero common sense

This book is worth reading, not because she has put forth an awesome idea. It's more about understanding how people that run central banks think, so you can make sure that you are aware of what is happening and what will happen to your money.

The book will teach you a bit about how things work. The content and the main point, however, probably lack common sense. It's exactly the thing that people will say, just before everything collapses. Her idea probably works until it doesn't. And if our policy makers think this way, the book is still worth reading so you could be prepared for the disaster that this will likely accelerate. Cheers

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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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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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An eye opener

I was surprised to learn the concepts fleshed out in this book and what they meant for the future if implemented. It was surprisingly relevant for my country, Australia, even though the book centres around American politics. This is for anyone who currently believes that a government should handle its budget like a household.

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Your government is not a household

All citizens of sovereign goverments need to understand MMT. We need to educate our politicians and hold them to account. This book tells us how and why.

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Essential Reading

If you want to know how to make a better world, you need to understand the Deficit Myth.

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this changed my entire economic world view

this book has shown me that the basis of my knowledge regarding the economy has been wrong.

it has opened my eyes to a new way of looking at fiscal policy and the potential for a better way of doing things.

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So slow, repeats same thing again and again

Just trying to convince you by repeating some basic thing again and again.
You get lines like “it’s jarring, I know”. “You can now see”, or “once you get it”

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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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  • Anonymous User
  • 20-04-2021

Phenomenal!!

In my opinion, this book, and the teachings behind it, should be studied in every economics class beginning in high school. An educated populace is a healthy populace, and this is transformative information for our global society.

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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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  • Chris H
  • 08-12-2020

A very conventional revolutionary

I’m a big fan of MMT and wanted to love this book. It does a fine job as a primer for MMT and is engaging.

The main disappointment is its truly woeful treatment of trade. Kelton relates the tale of a motorcycle factory that got shut down despite millions being simultaneously lavished on dividends and stock buybacks. She announces that the response to this should be the federal jobs guarantee (JG)— in other words, the workers should leave their colleagues and be assigned minimum wage ($15) work in an entirely different sector (she suggests ‘care’) with a transient bunch of other laid-off workers. All the while, both the workers’ skills and the capital stock tied up in the factory atrophy.

This is senseless from an MMT perspective: the aim according to which is to make the full use of the skills, infrastructure and resources of the society.

Instead, the currency-issuing government should intervene to purchase the factory building and capital stock, set it up an employee-owned business run by the existing workforce, and pay them all the JG rate for a given period while they work out how to use their skills and equipment to produce something again. Thus their skills and resources are retained, their dignity enhanced.

As mentioned, Kelton sees the JG as mainly providing jobs in the social & environmental care sector. She doesn’t seem to envisage that the JG could be used for import substitution. Yet the less a country needs to import, the less it needs to worry about exchange rates, and thus to an extent the less it needs to worry about the big constraint on central government money issuance, inflation.

This leads to the other deeply conventional aspect of Kelton’s book. If inflation is the constraint, what should its rate be? She doesn’t answer. Plainly we want predictable prices that don’t change so swiftly that we are in a perpetual panic, but what predictable, manageable rate should we aim at?

The question immediately pitches us into what Kelton studiously avoids: class politics. If you are a debtor, high inflation inflates your debt away; if you are a creditor high inflation inflates your assets away. There is an inalienable class tension here. Kelton emotes at tedious length about the problems of indebtedness, but unless I fell asleep through something interesting, her response is deeply conventional: less unemployment! Better-paying jobs! Etc. Which has little bearing on MMT per se. What does is using currency issuance and inflation targets to reduce indebtedness.

This lack of class analysis is all the more grating given her insouciance about trade deficits. If you import more than you export then the difference is made up through sales of assets to foreign investors. Assets such as real estate, which pushes up the price of housing and thus the indebtedness of homeowners.

Well, enough. The book gives an insight into a revolutionary way of looking at the economy, but the writer is at home in convention.

2 people found this helpful

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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.

2 people found this helpful

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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".

2 people found this helpful

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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.

1 person found this helpful

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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.

1 person found this helpful

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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

1 person found this helpful

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  • MR A Hirst
  • 28-05-2021

A foot in the door sales pitch.

This book was utterly disappointing. Whilst I came to the idea that MMT is just another voodoo notion that social engineering midwit types love to hang their hats on, I really hoped there would be some interesting ideas and angles in there.

Instead, I am confronted with a contradictory, inconsistent story of how our economy works coupled with an irrational solution whilst disingenuously choosing not to highlight the elephant in the room...tax.

None of the explanations or analogies held any water, esp. the bath one (geddit?). The most basic summary of MMT is, that printing your own money works, so long as you have the means to tax it all back again. MMT serves only to promote insidious corruption within government institutions. It can only result in a massive expansion of the state, and state programs that can only reduce your freedom through obfuscation, opacity, and corruption - bloated states are always self-serving in the end.

As I mentioned, the only way to control the wider economy with an MMT operating model would be to tax, increase tax, and tax some more. The inevitable outcome, from reading this book, is that people will pretend to work whilst the state pretends to pay them.

Then there is the bizarre climate rant at the end. Not one accurate statement, just dubious study after dubious study from left-wing think tanks and NGOs, all stated with absolute certainty. Unreal.

This book is nothing more than a sales pitch, for a problem that is currently being constructed to fit it. Voodoo science justifying voodoo economics.

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