2021年2月26日金曜日

keen and kelton

参考：


NAEC virtual seminar with Stephanie Kelton : The Deficit Myth
2021/02/25

自動翻訳
A.E.グッドハート Charles Albert Eric Goodhart 1936~

Tobin 1963

The Role of the State and the Hierarchy of Money March 2001Cambridge Journal of Economics 25(2):149-63 DOI: 10.1093/cje/25.2.149 SourceRePEc Authors: Stephanie Bell at University of Missouri - Kansas City Stephanie Bell University of Missouri - Kansas City


The  Case  for  Preserving Regulatory  Distinctions James  Tobin 1987

2021/02/03 kelton 作業中



https://www.milkenreview.org/articles/the-deficit-myth


Keen and Kelton NAEC virtual seminar with Stephanie Kelton : The Deficit Myth? 2021/02/25

 NAEC virtual seminar with Stephanie Kelton : The Deficit Myth? 2021/02/25


OECD NAEC debate on #MMT with Stephanie Kelton, author of The Deficit Myth

2021/02/25

https://youtu.be/4yk51HOjq4g

(1:32:20)


(6:44~) kelton

(48:09~)keen

1:21:30(1:23:40~) keen

1:24:09(1:26:19~) kelton


https://youtu.be/swcBd5ofXKw

https://vimeo.com/516774379

https://youtu.be/1oiG1U75T3s


4:32 Kelton

46:05 keen

1:01:01 kelton

1:21:28 keen

1:24:06 Kelton

1:26:50 bitcoin

1:27:30 keen

ーー

4:32 Kelton

　9:57 on taxes

　15:48 on debt

　19:40 on money

　24:00 on taxes

46:05 Keen

1:01:01 Kelton

1:21:28 Keen

1:24:06 Kelton

1:26:50 bitcoin

1:27:30 Keen


ーー


4:32 Kelton

　9:57 on taxes

　15:48 on debt

　19:40 on money

　24:00 on taxes

46:05 Keen

1:01:01 Kelton

1:06:40 minsky

1:07:48 tobin

1:21:28 Keen

1:24:06 Kelton

1:26:50 bitcoin

1:27:30 Keen



https://twitter.com/profstevekeen/status/1365090401170776067?s=21

https://twitter.com/malcolm_reavell/status/1365255915742646283?s=21














マンキューマクロ経済学2,255頁

第7章

政府負債と財政赤字

「若者たちに幸いあれ,彼らが国債を引き受けてくれるのだ、」

ーハーバート・フーヴァー(アメリカの第31代大統領)

「われわれはもう一歩進んで“Zillion”を実際の単位として考えるべきだと思う.

“Gazillion” もそうだ、Zillion は1兆の1000万倍,Gazillion はZillion の1兆倍だ、まさに

今がその時だと思う.」

ージョージ・カーリン(アメリカのコメディアン, 批評家)


　政府支出が税収を上回ると財政は赤字になり, 赤字は民間部門からの借入

でまかなわれる。過去の借入が累積したものが政府負債である。

アメリカの政府負債の適切な大きさについては,アメリカの歴史と同じぐ

らい古くから論争がある.アレクサンダー・ハミルトンは「国債は,過剰で

さえなければ,国民に幸せをもたらすものである」と主張したが,他方でジ

ェームズ·マディソンは「国債は国災である」と反駁した。実際,合衆国の

首都をどこに置くかは独立戦争時の州債を連邦政府が引き受ける協定の一部

として決定された。というのは,北部の諸州のほうが大きな負債を抱えてい

たので,首都は南に置かれたのである。

　政府負債をめぐる議論は近年特に白熱している。2008年から2009年にかけ

ての金融危機の影響でアメリカ政府は巨額の財政赤字を被った。この赤字の

一部は自動安定化装置によるものである。すなわち,経済が不況になると,

税収が減り,他方で失業保険のような政府の計画支出は増大する。さらに、

経済を刺激するためのさまざまな裁量的財政政策の変更は赤字を増やすこと

になる。2009年の赤字は GDP の9.8%で,第2次世界大戦以降で最大の予

算不足であった。.経済が回復するに伴い,赤字は2014年の GDP の3.7%ま

で減少した。しかし多くのアナリストはこれから先何年かのうちに赤字は再


256

第3部 マクロ経済政策のトピックス

び増大するのではないかと危恨している。なぜならべビーブーム世代の多く

がまもなく退職して,政府のさまざまな社会保障や医療保険制度の受給資格

者になるからである。

　本章では政府負債の経済効果に関する論争のさまざまな側面を考察する。

まず数値をみることから始めよう.7-1節では,アメリカの政府負債の大き

さを,他国の政府負債やアメリカが過去に経験した負債と比較しながら検討

する。また将来の行方についても簡単にみる。7-2節は,政府負債の測定が

なぜ見た目ほど単純ではないのかを考察する。

　次に,政府負債が経済にどのような影響を与えるかを考える。7-3節は,

政府負債に関する伝統的な見解を述べる.この見解では,政府の借入は国民

貯蓄を減らし,資本蓄積にクラウディング·アウトを生じる.この見解はほ

とんどの経済学者が受け入れている考えであり,本書を通して,財政政策を

論じるときには,暗黙にこの考え方を採用してきた。7-4節では, リカード

の等価命題(Ricardian equivalence)と呼ばれるもう1つの見解を紹介する。

これは,少数であるが影響力のある経済学者によって主張されている.リカ

ード派の見解によると,政府負債は国民貯蓄にも資本蓄積にも影響を与えな

い、後にみるように,政府負債に関する伝統的な見解とリカード派の論争は,

政府の借入政策に消費者がどのように反応するかについての意見の不一致か

ら生じている。

　7-5節では,政府負債をめぐる別の側面を考える。まず政府はつねに財政

を均衡させなければならないのかどうか,もしそうでないとすれば,どのよ

うなとき財政赤字が望ましく,どのようなとき財政黒字が望ましいのかを議

論する。また,政府負債が金融政策,政治的プロセス,さらに世界経済にお

けるその国の役割に及ぼす影響について考察する。

本章は政府負債や財政赤字の影響を理解するための基礎を提供するが,話

は次の章になるまで完結しない.そこでわれわれは,金融危機の原因を含め,

金融制度をより広く検討する.これからもわかるように,過剰な政府負債が

このような危機の中心にあると言えるのであり,それは近年,いくつかのヨ

ーロッパ諸国が痛みを持って学んできたことである。

…

258

第3部 マクロ経済政策のトピックス

図7-1 ● 1791年以降の負債- GDP 比率:アメリカ

負債の対GDP比(%)

120

第2次世界大戦

100

金融危機

80

イラク戦争

60

独立戦争

大恐慌

40

南北戦争

第1次世界大戦

20

1791 1811 1831 1851 1871 1891 1911 1931 1951 1971 1991 2011

年

　民間保有のアメリカ連邦政府の負債残高は,アメリカ経済の規模に比べると,戦

時には急激に上昇する. 政府は戦時の支出を借り入れでまかなうためだ、負債残高

はまた,経済が大きく落ち込むときに上昇する。たとえば,1930年代の大恐慌や,

2008~09年の金融危機の後の景気後退などだ、負債 - GDP 比率は平時には通常,

ゆっくりと低下している。

(出所) アメリカ財務省,アメリカ商務省,T.S. Berry. "Production and Population Since 1789,"

Bostwick Paper, No. 6, Richmond, 1988.


…全体の真ん中

からそれほど離れているわけではない.世界の標準からみると,アメリカ政

府はとくに放漫的でもなければ検約的でもない。

　アメリカの歴史をみると,連邦政府の負債は大きく変化してきた。図7-1

は1791年以降の連邦政府の負債残高を GDP 比率で示している。経済規模と

比較すると,政府負債は1830年代のほぼゼロに近い状態から,最高で1946年

の106%まで変化してきた。

　歴史的に,政府負債が増大する最大の理由は戦争である。負債 - GDP 比

率は大きな戦争中に急激に上昇し,平和時にゆっくりと低下している。多く

の経済学者は,この歴史パターンが財政政策を実施する適切な形だと考えて

いる。この章の後半で詳しく議論するように,戦争の赤字資金調達は税の平

準化や世代間の公平性の観点から最適と思われる。

　平和時に政府負債が激増する実際の例が1980年代初めに生じた。1980年に


第7章 政府負債と財政赤字

259

図7-1● 1885年以降の負債- GDP 比率:日本

負債の対

GDP IŁ (%)

250

200

第2次世界大戦

150

100

日露戦争

50

1885 1895 1905 1915 1925 1935 1945 1955 1965 1975 1985 1995 2005 2014

年度

　日本でも戦時(日露戦争と第2次世界大戦)には負債 - GDP 比率が上昇

している。第2次世界大戦後はハイパーインフレーションが発生したので,

負債 - GDP 比率は急激に低下した。第1次オイルショック以降の不況対策

による上昇と「バブル」 期の低下,さらに1990年代からの長期停滞対策によ

る上昇も顕著である。

(出所) GDP については, 大川一司ほか編「長期経済統計1一推計と分析 国民所得」,内閣

府「国民経済計算」、政府債務については, 「日本長期統計総監」,財務省「国債統計年

報」,財務省「国債及び借入金並びに政府保証債務現在高」。


　ロナルド·レーガンが大統領に選ばれたとき, 彼は減税と軍事支出の増大に

踏み切った。これらの政策は金融引締めによる深刻な不況と相まって長期に

わたる莫大な財政赤字をもたらすことになった。負債 - GDP 比率は1980年

の25%から1995年の47%へと約2倍に上昇した。平和と繁栄の時期にアメリ

カがこれほど大きな政府負債の増大を経験したことはなかった。この政府負

債の増大は将来世代に不当な負担をかけることになると,多くの経済学者は

批判した。

…

Short and Sweet: My 7 minute presentation on #MMT to the #OECD | Prof Steve Keen on Patreon
https://www.patreon.com/posts/short-and-sweet-48017298

FEB 26, 2021 AT 8:59 AM

This video starts with my presentation using my Minsky software to illustrate the primary points of MMT. It is 48 minutes and 16 seconds into the full presentation by Stephanie Kelton, based on her book The Deficit Myth. Patreon's video system starts a few seconds ahead of the start of my talk, but I'll leave it as is in case trying to second-guess the starting point causes problems for other viewers.

My talk is about 8 minutes in length, and uses my Minsky software to confirm the basic points of MMT:

  • The deficit itself creates money, independent of whether or not private banks buy Treasury Bonds, or whether the Central Bank buys Treasury Bonds from private banks;
  • The deficit enriches the private sector in monetary terms, by increasing private sector savings, thus making more money available for consumption and investment by the private sector. This is the exact opposite of the claims of mainstream Neoclassical economics, as shown by the opening cites from Greg Mankiw's Macroeconomicstextbook.





https://oecdtv.webtv-solution.com/7458/or/naec_virtual_seminar_with_stephanie_kelton_.html 

can you hear me i can hear you excellent welcome my name is anx armstrong so i'm going to be chairing today's event hi angus hi um very nice to see you again have someone else join here now will we be able to share our screens because currently we cannot and i just have a few slides okay we'll take care of that but we're going to start now so um angus do you want to go ahead yep thank you and welcome everybody to this nike oecd seminar on modern monetary theory or mmt my name is angus armstrong i'm director of the esrc's rebuilding macroeconomics which is hosted at this rather lovely building behind me the national institute for economic and social research in london and just for full transparency i'm also the chief economic advisor to the lloyds banking group here in london let me introduce our speakers for today our keynote speaker is professor stephanie kelton who is professor of economics and public policy at stony brook university and a senior fellow at the schwartz center for economic policy analysis now professor kelton as i'm sure many of you know has recently published an enormously successful and influential book which is the title of today's presentation the deficit myth modern monetary theory and the birth of the people's money welcome professor calton nice to be with you our three discussants in order of which they will be speaking are ambassador william robson who is the representative for australia to the oecd and prior to joining the oecd dr robson was an academic economist chief economic advisor to the prime minister and also worked in a private sector at senior levels our second speaker is professor steve kean professor of economics and a well-known critic of orthodox economics professor keane is probably most well known for clear warnings ahead of the global financial crisis of what might follow and our third speaker is professor university ontario canada has published on many aspects of economics mostly from a heterodox perspective and also editor of the review of political economy so welcome to all of you now the schedule for the seminar it will be as follows first of all professor calton will be asked to speak for up to 35 minutes and then each discussion will be given seven minutes to respond i'll then return back to professor kelton to make any comments on any of the remarks that have been made before opening up to a general discussion now for the discussion if you'd be kind enough to type in any questions to the chat either if you come online or those who are not online if you can type into the chat then i'll collect any questions from there and put them to any of the speakers or to the panel please do respect the time limits because we only have an hour and a half for the full seminar and finally if i can ask all of you when you're not speaking to go on to mute to minimize the background then that will be very helpful finally before we start i'd just like to make two points the first one is that whatever side of the debate of many issues that we find ourselves taking it's vital that we find a space to hear other points of view of course many issues become politicized but i think it's only through listening to both sides of debates can we really serve our communities and constituents well so uh thank you very much indeed for taking part in this event second the work and seminars of the nike directorate of the oecd has in my view i know many others in the uk really made the oecd the most credible multilateral for discussing new ideas until we find the secret to the universe i think it's extremely important this role continues and i want to congratulate the oecd on its success professor carlton can i pass over to you to speak and you have 35 minutes.

 

 　4:32 (6:44)

Kelton:

thank you thank you um angus and thank you for the invitation opportunity to spend a bit of time with all of you this morning i do appreciate that i know we're going to keep on schedule so i am going to jump right into this i wasn't entirely sure uh what the audience was going to be like i know this is open to the public and so uh i am going to present um do i have to do i think i'm good i'm going to present this uh in a way that i hope is both reflective of the some of the you know central tenets of mmt the substance of of the framework but also accessible to anyone who might be joining that does not have uh much or any background in economics so here we go um i think i'm going to start off you know i love mark twain so i start off as i do in the book with a quote from mark twain uh of course the great american uh humorous satirist it ain't what you don't know that gets you into trouble it's what you know for sure that just ain't so so you know i and i think steve and and louis felipe will probably agree um because you know in many ways the three of us have been doing the kind of thing that steve wrote about in his book debunking economics which is trying to fix what we perceive to be some very broken thinking around some of the bigger ideas in economics including you know the nature and role of money and taxes debt and deficits and so forth so what i'd like to do is just lay out what we're all familiar with first at least you know those of us that work in this space uh the conventional views and really juxtapose them with what i think is more accurate descriptively of the mechanics of government finance the nature of the monetary system.

 

 so the conventional views are familiar to all of us they are the the narratives that are most commonly reinforced in uh by politicians by you know the media press and so forth this idea that margaret thatcher and others gave us very uh long ago the idea that the government has no source of its own money there is no public money she told us there is only the money that people earn themselves there really is only taxpayer money and if you study economics of course you know you're introduced at some point to this concept of money usually uh the story is that markets uh invent money right that money arises spontaneously usually to overcome the inefficiencies that are associated with barter the state if it comes in at all comes in at the end mainly just to sanction what the private sector has already decided to identify choose use to serve as mostly a medium of exchange to facilitate exchange to make it more efficient and so forth so the state plays very little role by the time you get to public finance you're really in a thatcher world the idea is that the taxpayer is at the center of the monetary universe again with thatcher she says i have to keep moving the images of all our boxes the state if it wishes to spend more can do so only in one of two ways it can borrow your savings or it can tax you more it's no good thinking she says that someone else will pay that someone is you there is no such thing as public money there is only taxpayer money so this is what we're accustomed to hearing right that the government is financially constrained much like a household face is a budget constraint and because this is the way we usually think about things we always hear our politicians and pundits and others ask this question the nagging question is how will you pay for it right where is the money going to come from how will you pay for it.

 

and you know when i was doing graduate work like so many others who study economics at that level we used olivier blanchard's textbook and it's not just of course blindshard but the mainstream texts in general present public finance as if the government has three choices three different ways to pay the bills and it can choose to raise taxes come up with the revenue it can choose to borrow that might be an option or it always has this third option which is called printing money but that option is quickly removed as the sort of last refuge of a banana republic and so what we're ultimately left with is what margaret thatcher told us that there you can borrow our savings or you can tax us more so in the book i offer the reader this little mnemonic just to help sort of frame the conventional way of thinking which is what i call the tabs model so tabs is taxing and borrowing governments can tax and borrow that's how they come up with the money and only once the financing has been secured are they in a position to spend the spending is secondary you must first find the money okay so we get into things like this where everyone is in a never-ending uh you know search for the money where is the money so we have you know here i i'm just sharing with you a tweet from uh the staff director of the u.s senate budget committee i worked alongside both of these men warren gunnels and of course here senator bernie sanders and this is a fairly recent tweet put out by the staff director of the u.s senate budget committee saying listen we have a plan to make public colleges and universities tuition free cancel some student loan debt all we need is a small tax on wall street speculation financial transactions tax we can come up with all the revenue we need and we can afford to do these things.

 

 

 so this is very much ingrained in the thinking in the way we approach the federal budgeting process the idea that you know your programs are supposed to be paid for and so we have you know budgetary rules in place like pago that have lawmakers looking to secure the financing show where the money will come from so that you can demonstrate to the congressional budget office uh that you can accomplish things in a revenue neutral well deficit neutral uh sort of way so finding the money is important living within your financial means paying attention to the fact that ultimately you are revenue constrained this is again all the conventional thinking so we get to deficits there is just sort of something inherent in our thinking about public finances and where the budget ought to land at the end of the fiscal year balanced budgets are good and and should be sought after deficits are evidence that something's gone wrong right deficits are evidence of overspending and they're considered fiscally irresponsible yes there are moments in time when a deficit becomes uh necessary gee we'd rather not have to do this but we have coveted crisis or you know other emergencies so we're going to temporarily run deficits but we understand that this poses a number of risks so ultimately what we want is a plan to restore the budget to its proper place balance and we may need fiscal rules or other mechanisms to force the budget back into balance over time the idea being that there is some sustainable path for the fiscal trajectory and that budgets must be kept on that sustainable path okay so we talk about government's borrowing if you have a deficit then by definition the government is spending more than it is collecting in tax revenue so we imagine that as a shortfall that must be covered somehow and the way the government is supposed to cover the shortfall of course is through borrowing just as thatcher told us so this is a an image taken straight out of greg mancu's uh textbook which of course the the best-selling uh economics textbook on the market and uh and mancu just presents it this way that when governments run deficits they have to find the money to cover the shortfall where do they go to find the money they go to this place called the loanable funds market there is somewhere out there uh some available supply of savings again as thatcher told us the savings are there and they are available to be loaned out the problem is that the government is not the only borrower in town but government has to compete with other borrowers and the bigger the government's deficit the bigger a piece of that available savings the government is going to take away leaving behind of course fewer savings to be loaned out to everyone else so the story is that governments are in competition with other borrowers for a limited supply of scarce savings that the more intense that competition gets the higher the price goes so deficits drive interest rates up as interest rates go up private borrowers are crowded out of the market so private investment spending falls and we're told that ultimately this is bad for the economy because private investment is thought to be generally if not always more efficient right so you're elbowing out the more efficient use of those funds in order to finance government deficits and what you're left with is a you know less dynamic slower growing economy over time so on interest rates i just said deficits worth told drive up interest rates the short-term interest rate we understand uh to be under the control discretionary uh control of the central bank central banks are supposed to move the short-term interest rate around to try to stabilize the macro economy manage the business cycle this is okay because we have very wise technocrats searching for an r star or some neutral rate of interest over time longer term interest rates though are supposed to reflect market sentiment so investors are really in charge at the end of the day and governments that have to borrow on capital markets must go ha in hand to uh to private markets borrow funding and markets will ultimately decide the price of that funding and if markets decide they're worried about solvency debt sustainability and so forth they will demand higher and higher premiums next thing you know you could end up like greece china might wake up one day turn off the spigot no more dollars come out and you're you're facing some sort of sudden stop right a debt crisis this is all conventional stuff so how we talk about the debt we talk about the debt as if it represents a real burden on our future right at the end of the day deficits might be necessary covid might have to increase the debt but there will be some kind of reckoning on the other side and so you know you can you can look and uh and i would suggest you do so frankly there uh i think it's really interesting to juxtapose the mainstream thinking so this next bullet point that says a debt crisis is coming there were five economists i think from the heritage uh hoover hoover foundation hoover institute i believe uh five economists penned an op-ed in the washington post a debt crisis is coming and then they went through all of the reasons that they believe that the us is facing a long-term debt crisis and what we need to do about it actually in their view it's a short-term crisis in response to that piece from the conservative hoover institution economists five uh mainstream democrats wrote a response including janet yellen jason furman and other past chairs of the council of economic advisors five previous cea chairs wrote in response and the title of their piece was a debt crisis is coming but don't blame entitlements so the difference between the hoover economists and the former fed chairs that were democrats is not a debate about whether the u.s faces a debt crisis they all concede that we do it's about what's driving it what's behind it the conservatives say it's entitlements the democrats say well entitlements are part of the problem but not the whole problem there are other drivers and so we need a plan to deal with the fiscal crisis and again this is includes janet yellen so that's part of where we are today now switching gears how's my time okay so now i'm switching gears okay we went through all of the conventional stuff that's familiar to all of us and now we move into the mmt framework so you know mmt is an effort to explain how a sovereign currency works at the end of the day that's what it is we are attempting to lay out a more accurate description of the nature of the monetary system and the mechanics of government finance that's what the project has been about now some quarter of a century that we have um collectively a number of economists been working uh toward getting a better understanding a better handle on some of these things so we start with the idea that governments define the monetary system right you choose a currency you decide whether you're going to float that currency or pledge to convert the currency into something you could run out of we've had gold standards silver bi-metallic fixed exchange rate systems and so forth so you place yourself somewhere along this spectrum and what mmt was trying to do from the very beginning was say currency regimes matter right the nature of the monetary system matters and why does it matter it matters for policy space for what you can do with macro policy both monetary and fiscal depending upon the nature of the monetary system that you're operating under higher degrees of freedom for countries that float their currencies right um issue the currency don't borrow in foreign denominated don't take on foreign denominated debt less policy space for countries that adopt different monetary arrangements right a currency board dollarize uh enter a currency union and so forth all right so on money uh we don't let the state come in at the end we bring the state in at the very beginning this is something that i think probably a lot of you know the name charles goodheart this is what charles goodhart describes as juxtaposing chartless views of money with the medalist view the medalist view was the one i went through earlier here the state comes in at the very beginning defines chooses the unit of account just as keynes told us in the treatise on money imposes taxes and other obligations that are payable only in the state's own unit of account provides the population with a way to settle their obligations spends a currency into existence that the rest of the population can then use to either pay taxes or buy government bonds so the distinction that we make and that i make in the book this image is taken from the book is recognizing the difference between being the issuer of the currency and being merely a user of currency so you know individual states cities in the u.s currency users businesses big and small currency users households currency users which are precisely why congress the federal government has been coming through with income support and relief for small businesses for large businesses for households for state and local governments because the federal government can do what the rest of us can't do it can spend money it does not have it can commit to spending money without having that money on hand right so the policy space is well as i said enlarged when you operate with that kind of monetary system governments do not face a budget constraint as conventionally defined not a sovereign currency issuing government they can't run out of their own money this was a big mistake i think in the early years of the obama administration i mean you know he's elected in november of 2008 and just a few months later early in the crisis in 2009 he's being pressed on the deficit and the amount of money that's being committed through the american recovery and reinvestment he said he was asked at what point do we run out of money president obama said we're out of money now we're out of money now and that's such a problem right because i think most economists and including most former obama economic advisors will now tell you that they did far too little to support the economy and that as a result we ended up with what was a very lackluster anemic economic recovery much more fiscal support was needed but we had these ideas then that we were at risk of turning into greece that we were running out of money that the deficits themselves were the problem rather than part of the solution to the problem that we were in so mmt is telling us that you know the conventional story is wrong governments only have one way to pay the bills there isn't this menu of options you can choose to use tax revenue you can choose to use the proceeds from selling bonds there's only one way to pay all government spending today already is carried out via congress sending a set of instructions to its bank its fiscal agent the fed to mark up the appropriate bank accounts to credit the appropriate reserve accounts that's how it works so we're sending 600 1200 1400 checks out to people those checks result they show up on people's balance sheets as banks and the central bank change the numbers in people's bank accounts the taxi and borrowing is separate and secondary to the prior act of spending governments can pay any debt they have even the big ones there is no interest burden so-called that governments can't afford to pay sovereign currency issuing governments can always meet any obligation they have in their own currency uh even the very big ones so the punishment for spending too much is not insolvency it's not that you end up like greece it's not bankruptcy it's inflation right and so in mmt we view the tax itself checking the time uh as a the the currency itself is a tax credit right one dollar bill will always reduce your tax obligation to the state by one dollar it did it in 1850 1950 2050 it's always good for a one dollar reduction in your tax obligation or other fee or fine payable to the state the currency is redeemed by the state when we return it to the issuer so while we're used to we're accustomed to thinking of taxes as the way the government pays the bills right it gets the money and the more it collects from us the more capacity it has to spend because it has more money mmt says no taxes reduce the spending capacity of the currency user but they don't augment or increase the currency the spending capacity of the currency issuer when you write a check to the irs you are sending those dollars to the graveyard they're being deleted away they go off to die taxes are one way not the only way maybe not always the best way but they are one way to relieve inflationary pressures in the economy so government spends dollars in taxes drain some of them back out of the economy okay they're drained away and they disappear those dollars uh you know fulfill their life cycle uh on deficits i just think that you know it's astonishing to me the the reactions that people have just to the word deficit right because i don't know you watch a sporting event and you hear the announcer say that if your team is going to come back and win this thing they're going to have to overcome a 12-point deficit you know in the second half of the game or something you say oh deficit that's so bad but the deficit in terms of government deficits just the difference between two numbers it's all it is one of the numbers is how many dollars they're spending into the economy each year the other number is how many they're subtracting back out mostly through taxation so that's all we're talking about here and then once you recognize and get in that mindset and understand that if they spend 100 in but only tax 90 out somebody gets 10 right that this thing that we refer to as a government deficit is always to the penny mirrored by a financial surplus in some other part of the economy so i always try to impress if i'm you know doing tv interviews or other speaking or talking with lawmakers every deficit is good for someone period every deficit is good for someone don't think that the republicans don't understand this because the republicans pass these huge tax cuts in december of 2017 and cbo estimates the cost of those tax cuts to be 1.9 trillion dollars now that number should sound familiar if you're at all paying attention to the debates we're having in the us right now because we are debating biden's proposed 1.9 trillion dollar covid relief package so it's exactly the same cost 1.9 trillion deficits every deficit is good for someone the republicans used 1.9 trillion to do corporate income tax cuts and tax cuts for individuals mostly that went to the benefit of people who at least need the help in the economy eighty-three percent of the benefits went to people at top one percent of the income distribution but make no mistake that's a financial windfall on the other side of the ledger democrats are trying to push through a coveted relief package 1.9 trillion that's going to benefit schools state and local governments unemployed people and so forth so it's never about whether the deficit is going to be beneficial or not it's about for whom and for what right surpluses very quickly work the opposite way a deficit works like a blower it blows financial assets onto the balance sheets of people outside the government sector a government surplus means the government is subtracting out more than it is spending back in so a fiscal surplus works like a vacuum it hoovers up financial assets from our balance sheets so it is a problem for me that you know there is this sense out there that surplus equals good deficit equals bad and what we ought to be striving for is to put the budget back into surplus or you know to balance it for me and for you know the mmt goals are very different it's not about the number that falls out of the budget box at the end of every year we don't care about that what matters is getting achieving a balanced economy right and if you need a three percent deficit to achieve a broadly balanced economy with high employment and low inflation three percent is your number if it takes seven percent to deliver that seven percent is your number if you can get there with a surplus of one and a half or two percent that's your number right the focus is the economy not the budget outcome okay i'm going to speed up a little bit on borrowing i think this is a problem i think that referring to the outstanding stock of government bonds as the national debt is a problem i think referring to the mechanics of bond sales as borrowing is a problem we're using words that are applicable to currency users but inapplicable to currency issuers so what really happens when the government sells treasuries i'm using this in the u.s context obviously but this works in uh in japan and in the uk and elsewhere uh canada australia and so forth government spends 100 into the economy taxes 90 out down the drain leaves behind a deposit of 10 the government has a habit a custom right of matching up its deficit spending with bond sales so if the deficit is expected to be 10 billion whatever unit we want to put here the government will sell 10 billion in u.s treasuries so what happens is you spend 100 in take 90 out you've got 10 there but immediately you recycle those 10 dollars into u.s government bonds it's not borrowing like when i borrow when i borrow and i walk into a bank i sit down with a loan officer i say hello i'm here to borrow money i am there because i don't have money that's why i'm there the federal government is different the issue or the currency never has to borrow its own currency from anyone why would it it's a sure so something else is happening and when the government sells bonds what it's doing is first putting the money on the table and then taking the the currency off the table and replacing it with bonds so the government is first making the funds available and then swapping out its non-interest-bearing currency for an interest-bearing form of a monetary instrument government bonds right so the funds to buy the bonds come from the prior act of making those funds available from spending or lending them into existence all right speeding up interest rates mmt understands the natural rate of interest to be zero well i wrote one of the very first papers that i published starting my academic career was called do taxes in bonds finance government spending it is in that paper i think published in 2000 uh where i go through the mechanics of the monetary operations the bottom line gist of it here is that if the government is running deficits which it generally is um then government is usually spending more into the economy than it is subtracting out that leaves the banking system flush with reserves in the old day we didn't pay interest on reserve balances we the fed managed interest rates hit its short-term interest rate target through open market operations so the bonds were there to absorb soak up excess reserves that were created by the government's deficit in order to achieve a positive overnight interest rate to get the fed funds rate above zero if you don't intervene if you don't do something to take action to artificially create a different interest rate the interest rate you're going to end up with is zero so this is a paper written by uh warren mosler and matt forstatter they did something a long time ago laying out the argument for why we should really think of the natural rate of interest as zero anything above that is an artificially elevated interest rate mmt does not hand ring over the cost of debt service we understand that long-term interest rates are mostly a reflection of the expected future path of the policy rate the short-term interest rate even very high interest rates cannot bankrupt government so the debate is changing in the u.s now lots of people including janet yellen are starting to make the case that it's really interest expense as a share of gdp that matters not debt to gdp we think that's wrong we recognize that even very high interest expense relative to gdp and rising does not create problems in terms of debt service you just look back at reagan and paul volcker as fed chair volcker pushed into when when reagan took office the 10-year on u.s government bonds was almost 16 it never fell below 7 reagan's entire eight years in office so reagan did not enjoy a low interest rate environment rates were somewhere between seven and sixteen percent for the entire eight year period this did not prevent ronald reagan from doing two massive tax cuts huge buildup of the military tripling the national debt and it was all perfectly sustainable in the sense that there's no financing constraint on government okay so there's no magic threshold what matters is how desirable is it to pay a risk-free reward high interest rates to holders of government bonds i mean it's a choice selling bonds is a choice and the issuer can always set the price right the interest rate that it is willing to pay on any bonds it chooses to issue so there's a equity question or a distribution question here and then there are questions about inflation you pay higher and higher rates of interest that's interest income to bondholders so you may want to think about the inflationary risks um on debt the deficit is just another way to say net spending that's all it is right how much you spend in versus how much you subtract away through taxes so just replace the word deficit with net spending in every document you ever read and it will read just as true so the debt then is just the historical record it's the historical look back at all of the prior net spending the government has ever undertaken they are the dollars that were spent by government but not taxed back that are currently sitting in the form of very safe us government bonds or guilts or jgbs right that's all this number is telling us and there are even people now uh at places like the st louis fed who are writing papers saying you know it probably would make a lot more sense to just look at the what we call the public debt as part of the broader u.s money supply because that's really what it is you got the interest bearing stuff and you've got the non-interest bearing stuff or what the fed chooses to pay on on reserves but but that's it think of it as part of the broader money supply and then you realize that paying it back simply involves changing the composition of the money supply fewer bonds more reserves right that that's all it means to quote pay it back on inflation mmt at its core if i had to sum it up in one sentence i would probably say mmt is about replacing an artificial fake phony imaginary budget constraint with a real resource constraint with an inflation constraint that is at the core so we recognize supply constraints matter um part of the way that you might want to think about mitigating inflationary pressures is building and maintaining capacity and this is exactly what we're starting to do right by holding industries together and maintaining loans to keep small businesses grants really to keep small businesses in operation that was all about maintaining productive capacity right keeping a part of the supply capacity intact there is no inherent trade-off between inflation and unemployment we very much include in the mmt framework the idea of hyman minsky who i think was one of the great economists of the last century uh minsky thought that it was sort of crazy that we created a uh an institution in the central bank to serve as a lender of last resort to maintain liquidity of the financial system at all times.

 

 but we ignored the fiscal side of this we did not create an analogous institution to maintain the liquidity of the labor market at all points in time he proposed an employer of last resort we've called it the job guarantee uh it i could do a whole two hours on that but i'm not going to i'll just leave you with that this is a way to strengthen the automatic stabilizers and to impart greater price stabilizing um features to the current system i'm getting right to the end here so uh here's where we are right we have done we're about to pass 1.9 trillion or so here in the us i think globally you all probably know better than i do some 13 trillion or so has been committed around the world to dealing with coronavirus um large fiscal packages not offset so you know these are adding to deficits and joe biden president biden is saying i want this 1.9 trillion for covid relief but on the other side of this i want more trillions more to do infrastructure and climate and other things so the debate is changing a lot in the u.s it's moving away from i think the idea that we have to worry about solvency constraints like last time turning into greece and now you're hearing people like larry summers say well we have to worry about overheating and that to me puts us squarely in the mmt kind of frame where it's inflation risk that is the relevant risk and so i think we're headed for a more interesting and fruitful debate and i thank you for the opportunity to run through that.

 

 

 

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 professor Kelton thank you very much indeed that was admirably clear and uh punctual i was watching you to the minute it's absolutely perfect well done thank you very much indeed ambassador robson um are you ready for your comments please how do i do i need to stop sharing uh stop sharing your screen yes how do i do that um it's not usually it pops up with uh down at the bottom is it where it says oh there we are here we go perfect ambassador robson the floor is yours thank you thank you very much and um welcome to all colleagues on the line um and thank you for uh to professor kelton for uh um for that presentation um there are a few pictures of bathtubs and buckets in there i thought i was back in 1949 with bill phillips and the old hydraulic machines at lse and i think there's one in a museum in australia if people aren't familiar with these um you can you can go and see them online but i did feel a bit like marty mcfly in back to the future um with all the water flowing everywhere um but i'll get to some substantive comments i mean my take on on this on mmt is um i'll set it right out at the beginning i mean i think the ideas are wrong um uh and i'm not alone in that i mean if you look at you know right across the spectrum people like paul krugman from paul krugman to john cochran from uh jerome powell to phil lowe our own reserve bank governor um all have their concerns about it um but i'll start with some of the central propositions that i think i heard in the in the presentation um uh one was that um government can spend money it doesn't have there's no conventional budget constraint and it can never run out of um money this is for a government with a so-called sovereign currency um so i guess my initial question if i take that to its logical conclusion is why do we need taxes at all why don't we just finance all government spending um by just printing money um so you know we've been engaged and people on the line will know this there's a big project at the oecd that's been going on for many years on digital taxation and it's a very important project and it comes out of the uh beps whole agenda on corporate tax and then on on personal income taxes as well but mainly corporate tax and you know part of the concern with that project is that you know there's there's a concern um uh and you know i think it's uh legitimate that certain companies are not paying quite unquote their fair share in taxes but if we take this argument to its logical conclusion it seems to me well there is no fair share of taxes we don't need taxes at all we can just print money so i guess that's the question that comes originally to mine and then there's a bit of a contradiction there i thought because we're told before that that the government issues money because people need to pay taxes so we get a bit of circular argument um as the way the way i heard it was that we don't really need taxes but um and the government can just issue currency to pay all its bills but then people will only accept that currency if they because the government is telling them they need to pay taxes in that currency so a bit of circularity there um some other comments i mean why don't individuals just issue their own private currencies and do exactly the same as governments why is it that sub-national governments don't do the same way the government's just put up with you know being at one end of the spectrum or individuals being at one end of the spectrum of this of the sovereign sovereign currency uh continuum why don't we all just issue our own currencies and and say well i never have to pay anything back i just issue more money and the answer to that is that well people um you know won't accept my currency if they know that i'm never going to pay it back uh and that comes to the number of the problem that you know there are certain governments which you know have tied their hands um gone into currency unions australia is a currency union we don't have uh you know our individual states don't issue their own currency um uh and you know part of the reason for that is that uh you know that uh they need to to be part of that in order to convince people that uh they will um pay their debts back so you know taken to its logical extreme the question is why wouldn't individuals just do that because well there's a constraint on the on being able to do this and that constraint is the same constraint that various governments face um some other natural questions why do we have debt crises at all why don't governments just uh and debt crisis for so-called sovereign currency governments why don't uh why do we have those at all um why do we need cost benefit analysis at all if this is free money floating around um you know there's no opportunity cost uh you know why do we need any of that rigor on on government spending and project analysis we don't have to raise the funds by taxes we can just print money so why do we need all of those tools um so those are the questions but the big one i think that was glossed over really and it was mentioned um towards the end was inflation so you know inflation is just uh another tax it's another form of tax and it's an insidious form of taxation it's hidden it's unpredictable and that's why you know central banks um struggled for years to get inflation down and that takes me back to you know the philips era and the philips curve and we had an era of high inflation in the 1970s and uh you know it was um that debate back then was resolved in favor of what central banks subsequently did uh and that was inflation targeting and there was a good reason for that because inflation had these not only efficiency costs but distributional costs that um you know that weren't very attractive and it could quickly get out of control so that's the you know we come back to the central question if inflation is the punishment um then you know that's something we we need to worry about uh and so i'm left with that question in addition to all the other ones but look i thought it was a very stimulating um uh presentation um but i just put those few questions on the table to stimulate debate a bit further so thanks very much thank you ambassador robson um professor keane can i pass over to you for your seven minute snap please you're on me steve .

 

 

 

 

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Keen: (48:09)

okay unmuted and i'll just get my presentation rolling here so if you i'm taking a similar starting point to stephanie if you look at textbooks this is the framing that mainstream economists get that the government spends more than it collects in taxes it has a deficit which it has to finance by borrowing from the private sector uh the government borrowing reduces national saving crowns of capital accumulation and this gives an unjustifiable burden on future generations and stephanie took charts from mancue to make that point these are quotes now what is claimed in the deficit method deficits actually create money directly and actually increase private savings the borrowing from the project is unnecessary and that the banking sector's capacity to buy treasury bonds is created by the deficit itself.

 i have to add here i'm generally i've been in favor of mmt argument throughout some points i disagreed with but generally accepted it but i did not accept the argument that the deficit creates money directly so to check that i put it into my own minsky software which is a system a monetary system dynamic software program that lets me assess this and i found stephanie was correct so i want to show why that's the case now minsky the unique feature that minsky adds to system dynamics programs that already has about 30 of them in the market dominate engineering management to some extent uh minsky adds what are called godly tables that let us show financial transactions obeying the fundamental law of accounting that your assets minus your liability is equal to your equity and it classifies all accounts uh with financial accounts in this instance as either an asset or a liability or the gap between the two which is equity.

 

 

 so that's the standard starting point of a godly table in minsky now money when you look at it this in an integrated sense is the sum of the bank liabilities to the public plus bank equity i'm leaving cash out just for simplicity here so i look at the the fundamental situation for a monetary system and this is independent of whether it has a government running a deficit or not uh is simply that the assets are the uh the the money rather is the sum of deposits of the public at banks and bank equity and that is identical to the assets of the banking sector and both of these when you look at this in that sense to increase the amount of money which is to push up the sum of liabilities plus bank equity you also have to increase bank assets the same in reverse to eliminate money you have to reduce deposits and bank equity and you also have to simultaneously reduce bank assets so if you look at the basic operations of a bank spending money.

 and i'll just actually i don't know if this is actually overriding your screens but i'm seeing less of the audience here so i'll minimize it this way that that is the basic situation for government it's spending which increases reserves and increases deposit accounts it taxes which reduces reserves and reduces deposit accounts so spending creates bank assets and liabilities and taxation destroys bank assets and liabilities now since we know the deficit is the gap between spending and taxation then a deficit creates money for the public and also creates assets for the banks simultaneously uh and that is what in mancu mnt is saying that's contrary man q and simply accounting here is showing mnt is correct and man q is incorrect now that's just a very basic section i haven't seen how is this what are the financial implications of this uh government spending uh net government spending well the treasury will sell bonds to the banking sector through primary dealers and what i'm looking at here is this usual situation that the bond issue is equal to the deficit now when you look at what's going on there all the action is on the asset side of the banking ledger nothing is happening on liability and equity so what is going on here is a def is an asset swap the deficit itself has created excess reserves the bond sale lets the banking sector swap non-income earning assets of richard reserves for income earning assets which are bonds.

 so that's an asset swap and of course the banks will take advantage of that because they're going from reserves which normally earn them no income to bonds which normally in them and income there's nothing happening on the banking on the saliva and equities side so money no money has been created no change in the money supply occurs because of the bond sales now what about bonds being sold by private banks to either non-bank financial institutions or directly to the public well that actually involves uh into the first case of selling bonds to the central bank and that's open market operations there's no change in the money supply it's being done by for a trading profit by the banks but there's no change in the money supply on the other hand when the bank sell bonds to the non-bank private sector that actually reduces the bank assets and reduces the liabilities at the same time the private sector gets an income earning asset in exchange for the money which they got from the deficit in the first place.

 

 so central bank bond purchases have no effect on the money supply bond purchases by the public reduce the money supply but they're actually financed by the deficit created money in the first instance so what the public is doing they're swapping non-income earning money for interest bearing bonds what about interest payments on bonds so i'm looking at interest payments being made to banks for the bonds they hold and to the public the non-bank public for the bonds that they hold well that is income that is making a change in both the asset side and the liability and equity side of private banks it's generating income for the non-government sector and increasing the money supply so how are they financed how does the government pay the interest bill now you look at the central bank and the what the government is doing is borrowing from the central bank and that borrowing from the central bank is creating money for the private sector which of course is a flow of income for them as well so you have an intra government debt which pays interest on bonds and creates further money now.

 when you want to look at the entire picture and say what are the economic impacts of doing all this you need a much more integrated view than this and the mainstream does not have an integrated view of the financial sector by beginning with the rationalization that there is no money in the system they've left out what negative for the government is a positive for the non-government through all these financial transactions so a major point that mmt makes government deficit is a private sector surplus is correct government debt is a record of net figured money creation over time and have errors in the mainstream way of thinking which are due to having a partial non-integrated model of the government.

 and what you can see by looking at this properly is government deficits aren't burdening future generations they're enriching current ones we need a balance of fiat and credit money creation we've put the switch far too far in favor of credit far too low and cavalry feared and periods of high government debt creation are periods of high fiat money creation which is when we need to do things the private sector cannot do such as for example fight wars and fight pandemics and those things are necessary for a functioning society thank you.

 

 

 (56:25)

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 professor keane thank you very much indeed um our third discussant uh professor roshan can i pass over to you to speak please you're on mute cue there you go thank you very much uh happy to be here uh the first thing i want to say i don't know why this is not working now okay well i i just won't share and i will just speak uh okay it's working first i want to acknowledge that i'm speaking from toronto the traditional territory of many nations including the mississaugas of the credit the anishi nabek the chippewa the how do you know sony and the wendat peoples and is now home to many diverse first nations inward and meaty people um i thought uh stephanie's presentation was excellent uh full admission i used to be very critical of of mnt uh and over the years i think i've come to appreciate a lot of it and one of the things that i i've appreciated is that the mainstream used to uh hit us over the head with this argument of tina that there was no alternative um to to to the mainstream and what uh mmt has done very successfully in fact is to show that the war there is an alternative and the result is that people are now dealing and having to deal and having to respond to what mmt is putting out there and this is a huge step forward for uh the ideas that are being uh put forth uh now because of time constraints um i'll be going a bit quick but i want to touch on a few things first of all uh stephanie did deal with this a little bit um we are being always told that uh governments cannot afford social programs uh social housing national daycare full employment uh building back greener there's no money for that yet what this crisis has done is that it has shown that that is absolutely uh a ridiculous statement uh the money is always there if the governments want to in canada the deficit went from 25 billion to 450 billion dollars and this has been repeated in many countries around the world so i think that when people are demanding more money to be spent on social housing and other social programs the correct or the more honest uh reply from government uh should be no we simply choose not to uh spend on those things and those things being judged you know not being essential or etc so uh that's a more truthful approach to public uh finance it's not that the government cannot spend it they just choose not to spend it and in essence like she said there is no budget constraint uh anymore and this is being recognized more and more um so moving forward i think that um from this current crisis the burden of proof is now on those who claim there's no money because we know there is the money so they have to prove you know why they choose not to uh to spend um and like she said of course deficits are transferred from the public sector to the private sector someone is uh gaining from this public spending and when if you say that you are against deficits what you're really saying is you're sort of against private sector uh surpluses um and most people will tell you that of course they're in favor of private sector surpluses but that has you know a count apart and that's not ideology that's simply national accounting um and then i'm speaking a little bit fast but um then finally um other consequences yeah we could discuss the consequences to very high deficits is it inflationary uh et cetera et cetera but i think that inflation increasingly is something that we don't understand um the bank for international settlements has repeatedly put out these uh these reports that says uh you know what causes inflation there's no phillips curve anymore um no trade-offs so you know what is the cause of these inflation and i think mmt goes uh a bit into this personally that's one part that i don't quite uh agree with i'm more of a conflict inflation person but certainly something that we can discuss finally something that was not talked about but we should talk about the crowding in effects of government spending uh fiscal multipliers um it's being recognized now that fiscal multipliers are regime dependent the value changes through the cycle my own research shows that fiscal multipliers are actually policy dependent in other words the more government spends the bigger the fiscal multiplier so the idea of of incremental spending uh in my view is a wrong way you you go big or you don't go at all because if you don't go big you're not going to have that big bang for your buck um finally the burden of our children that was discussed about a bit i think that the real burden is to leave our our children and our grandchildren dilapidated healthcare infrastructure education education is grossly underfunded especially in canada my own university having now declared bankruptcy for as an example and more to follow as well and finally a lot of my research is based on the income distributive effects of monetary policy the social class bias the carbon bias of monetary policy the gender bias and these are issues that i think mnt should should look into because i think it would complement the story very well thank you very much thank you very much indeed and thank you to all of the speakers for being so punctual and professor calton you've heard a lot from a very wide range there so would you like to pick up a few of those remarks we've got plenty of questions in the chat and i want to give the discussions another chance but perhaps you could open up a discussion got half an hour overall so um i'll pass over to you to give some thoughts back to the comments you've heard so far please sure.


1:01:00

kelton ：

okay well thank you so um i'm gonna pick i guess as you suggested i will choose uh to deal quickly with a few of the bigger questions on this question about why have taxes at all there must be a hundred uh articles out there written by mmt economists if governments um can pay for their spending without raising taxes why do we have taxes at all so there's enormous literature out there the answers are these first of all as i explained the tax is a way for governments to start up a currency from scratch we have written.

  i have no idea how many volumes of scholarship is out there but this is the first point right that the government wants to provision itself it wants to move real resources from the private domain to the public domain how does it do that in the first instance it imposes obligations on others and that's important right these are legal obligations the state as keynes told us has the legal right to make and enforce its tax laws so enforceability is important the state imposes an obligation the rest of the population then well or at least the segment that's subject to that obligation to the tax has to find a way to earn the state's currency in order to settle the obligation with the state so if you were trying to start up a currency from scratch oh i don't know the euro you know it's a pretty good example but we have historical examples as well uh uh you impose the obligations and this the population is then compelled to work in exchange for that currency so the tax gives value to what would otherwise be worthless pieces of paper let's say once you have a monetary system in place up and running taxes are important for a variety of reasons you know i would recommend taking a look at an article by beardsley rummel his last name is spelled r-u-m-l rommel was the chairman of the new york federal reserve bank.

 i'll say again chairman of the new york fed rummel in 1946 published an article the title of which was taxes for revenue are obsolete head of the new york fed the government does not raise taxes for the purpose of of getting revenue it's not what taxes are about he went on to explain all of the different reasons that you have taxes in spite of the fact that government doesn't need to tax in order to spend first he said taxes help mitigate inflationary pressure you can imagine if all we did was commit to spending more and more and more into the economy and never tax back out any dollars you would quickly undermine the value of the currency we are preparing to move the sixth piece of legislation through congress this 1.9 trillion that will be bill number six all six spending bills that congress has passed since march to deal with covid are deficit spending it is sending one pure set of instructions to the fed we are going to be spending get ready you're going to change the numbers in the appropriate bank accounts so we can pick uh a 600 direct cash payment we can send 1200 we can send 1400 we could send 14 000 we could send 140 000 this is the issue right at some point it's going to be too much .

so the relevant constraint is inflation at some point you have to offset your spending you will run out of fiscal space as the economy approaches full employment but right now in a depressed economy you can spend without increasing taxes so i heard the question uh well how we can't just spend without increasing taxes well sure we can we're doing it that's what we've been doing and congress can continue with this kind of legislation until it decides that it wants to start offsetting some of that spending with higher taxes the point about the inflation tax is important again mmt centers inflation risk that is at the core i worked as the chief economist for the democrats on the u.s senate budget committee i never once in all my time serving in that position heard a member of the u.s senate or a staffer talk about inflation risk they're writing trillion dollar infrastructure bills proposals to make public colleges and universities tuition free nowhere in any of the discussion does inflation come in why because that's the fed we don't have to worry about inflation in an mmt world if we were approaching the federal budgeting process the way that i would we would be vetting proposed new spending not on a cost-benefit analysis not sending it to cbo and asking for a score about what it does to the budget outcome does it add to the deficit we would be doing rigorous analysis of proposed new spending to determine whether it carries heightened inflation risk and if it does what are the appropriate ways to mitigate that risk before we vote on to authorize the spending so in other words mmt is building inflation in in evaluation of inflation risk into the federal budgeting process the best way to fight inflation is offensively not defensively you don't want to try to chase it after you've caused the problem you want to evaluate your spending vet the proposals and mitigate as best you can inflation risk ahead of time um so there was a question about uh why do why don't we all just issue our own money well minsky said uh anyone can create money the trick he said is to get it accepted so there's there's nothing to prevent any one of us from entering into a contract where money is created okay but there is something called the u.s constitution which includes article 1 section 8 which gives the united states government the sole legal authority to issue the currency right so the california governor can't do it which the the mayor of detroit cannot issue dollars this is what separates the issuer from the users of currency so you could say why don't we all i could set up shop in my uh basement and try to manufacture the us dollar but i assure you that if i get caught i'm going to end up in an orange jumpsuit and i'm going to be behind bars because i don't have the legal authority to do that i can enter into different contracts and create different money things but the state's currency is the ultimate means of payment right that is the unit in which we settle obligations and that is why jim tobin uh professor tobin said the state's money is different it sits at the high at the top of the hierarchy um debt crisis last thing i'll say why do we have debt crises at all because countries borrowing currencies that they don't issue so you know we could go through this and i've done this you look at fitch's analysis or something and they'll say oh there are all these examples of sovereign governments defaulting on debt no there aren't uh there are examples of countries with fixed exchange rate regimes which i put in a different category countries borrowing in foreign currency uh defaulting on public obligations but that's a very different thing i challenge you to find me an example of a country that defaulted was forced into default on debt denominated in a currency that it issues that wasn't tied that wasn't convertible i don't think you will find one there was one example of japan that was a voluntary default not an involuntary default you have to be very careful about you know these ideas that you have all these examples of countries that have defaulted on sovereign debt i i i've looked at this for a lot of years i would be very surprised if you can produce an example of a country that defaulted that wasn't on that was floating uh its currency and didn't have any foreign currency denominated debt.


1:09:15

：kelton



1:01:00 ケルトン なぜ税金があるのかという大きな疑問について、あなたが提案してくれたように、いくつかの大きな疑問をすぐに取り上げることにしましょう。 何巻もの奨学金が出ているかは分かりませんが、これが最初のポイントです。政府は自分自身を提供したいと思っています。現実の資源を私有地から公有地に移したいと思っています。国との間で債務を決済するために、国の通貨を使っています。ゼロから通貨を作ろうとした場合、ユーロはわかりませんが、歴史的な例もあります。その通貨と交換することで、税金は価値のない紙切れに価値を与えてくれるのです。 貨幣システムを構築して運営していく上で、税金は様々な理由で重要です。 U-M-L・ロンメルは ニューヨーク連邦準備銀行の 頭取でした もう一度言いますが、ニューヨーク連邦準備銀行の議長のルンメルは、1946年に記事を発表しました。そのタイトルは、「歳入のための税金は時代遅れ」というものでした。ニューヨーク連邦準備銀行の頭である政府は、歳入を得るために税金を上げるのではなく 政府は支出するために課税する必要はありません。彼はまず、税金はインフレ圧力を和らげるのに役立つと言いました。もし、私たちがしたことすべてが、もっともっともっと経済に支出することにコミットしていたならば、想像することができます。 9兆円が法案第6号となります 3月以降、議会で可決された6つの支出法案は、すべて赤字支出です 連邦政府に1つの純粋な指示を送っています 我々は支出するつもりです 準備をしてください 適切な銀行口座の番号を変更して、600ドルの直接現金払いを選ぶことができます 1200ドルを送ることができます 1400ドルを送ることができます 14000ドルを送ることができます 14万ドルを送ることができます これが問題なのです 

（ある時点で過剰になりそうなので、関連する制約はインフレです ある時点で支出を相殺しなければなりません。景気が完全雇用に近づくにつれて財政的な余裕がなくなりますが、今の不況下では増税せずに支出をすることができるので、どうやって増税せずに支出をするのかという質問を聞きました。 上院予算委員会で民主党のチーフエコノミストとして働いていましたが、その職に就いていた時に、上院議員やスタッフの話を聞いたことは一度もありませんでした。 上院議員や職員がインフレリスクについて話したことは一度もありませんでした。彼らは何兆ドルものインフラ法案を書いていますが、公立大学の授業料を無料にするという提案は、どの議論のどこにもインフレの話は出てきません。 利益分析 CBOに送るのではなく、それが予算の結果にどのような影響を与えるのか、それが赤字を拡大させるのか、という点について点数を求めています 提案されている新しい支出について厳密な分析を行い、インフレリスクが高まっているかどうかを判断し、もし高まっているのであれば、そのリスクを軽減するための適切な方法は何なのか、ということを決定するために、承認の採決前に インフレと戦う最善の方法は攻撃的ではなく、防御的ではなく、問題を引き起こした後にそれを追いかけようとするのではなく、支出を評価し、提案を吟味し、できる限りインフレを緩和したいと考えています。）


関連する制約条件はインフレです ある時点で支出を相殺しなければなりません 景気が完全雇用に近づくと財政的な余裕がなくなります しかし今の不況下では増税せずに支出することができます 疑問に思ったのですが 増税せずに支出することはできないのでしょうか？私は民主党の上院予算委員会でチーフエコノミストとして働いていましたが、一度たりとも米国の議員の話を聞いたことはありませんでした。 上院予算委員会で民主党のチーフエコノミストとして働いていましたが、その職に就いていた時に、上院議員やスタッフの話を聞いたことは一度もありませんでした。 上院議員や職員がインフレリスクについて話したことは一度もありませんでした。彼らは何兆ドルものインフラ法案を書いていますが、公立大学の授業料を無料にするという提案は、どの議論のどこにもインフレの話は出てきません。 利益分析ではなく、利益分析をＣＢＯに送って、それが予算の結果にどのような影響を与えるかについて点数を求めるのではなく、それが赤字を拡大させるかどうかを判断するために、提案されている新しい支出について厳密な分析を行うことになるでしょう。攻撃的ではなく、防御的ではなく、問題を引き起こした後に、それを追いかけるのではなく、問題を引き起こした後に、支出を評価し、提案を吟味し、 インフレリスクを可能な限り緩和したいと思っています、そのため、質問がありました...なぜ、私たちは皆、自分たちのお金を発行しないのか？ 憲法と呼ばれるものがあります 第１条第８節には、アメリカ合衆国政府に通貨を発行する 唯一の法的権限を与えています カリフォルニア州知事はできません デトロイト市長はドルを発行することができません これが通貨の発行者と使用者を 分けるものです 私にはそのような法的権限はありませんが、異なる契約を結んだり、異なる貨幣を作ることはできます。しかし、国家の通貨は究極の支払手段であり、それは我々が債務を決済するための単位です。フィッチの分析を見ると、主権を持つ政府が債務不履行をしている例があると言うでしょうが、そんなことはありません。為替レートが固定化されている国の例はありますが、外貨建てで借りている国の例はあります。日本の例では、不随意の債務不履行ではなく、任意の債務不履行であったという例がありますが、このような考え方には非常に注意が必要です。 1:09:15 ：ケルトン www.DeepL.com/Translator（無料版）で翻訳しました。


／／



thank you um let's go to my man going to put a couple of questions try and summer summarize a couple of questions from the chat and then i'm going to ask uh the ambassadors from uh australia and chile to come in to ask if they want to ask questions because i think that that's probably appropriate um two questions which come out from the chat the first one was developing the point you just made what about emerging market countries uh some south american countries now you don't have to have uh use another country's currency you all sorts of kinds of regimes in fact your first slide very much went into this so many countries in fact uh i suggest at least half the countries in the world have some form of managed exchange rate and default isn't the only penalty here you know you can have a dreadful mess with the exchange rate crisis and so on and so forth and banking problems uh so where how does the mmt uh approach help those countries which at least peg their currency to another country's currency how does that work uh there was a question particularly about the euro as well so that's one set of questions the second set of questions was about the distributional consequences of mnt is this actually a vehicle by which one could redress some of the inequalities that have risen perhaps through um kovind 19 or over the last 30 years it wants to take a view that inequality become an issue does this become a redistributional tool as well so i think that summarizes those two questions perhaps i can ask you to respond to those two and then we'll turn to the ambassadors okay so thank you uh in the book i have a whole chapter that deals i think in pretty good detail with the first of your questions about emerging or developing countries sensitivity those that are highly sensitive to you know sharp uh fluctuations in exchange rates and so forth we recognize that it is true and so you know you we are talking about policy space in a way that recognizes that if you have you know if you meet certain criteria in terms of floating your currency and not borrowing in foreign debt and so forth and i would add and i do include this in the book that it's also important that um you know this thing we might define as monetary sovereignty also means that you can sustain a sharp depreciation in your currency without ending up with a lot of problems right i mean japan can do that you can have a 30 percent uh drop in the value of the yen and things don't blow up australia as well so we have examples of countries that can handle you know a fairly sizable um depreciation but they're not so dependent on the rest of the world for critical imports of medicine and technology energy food that it becomes you know widespread uh widely problematic disruptions in the economy so yes and and part of how mmt can help and we're working with um public officials in many developing countries is in helping them to you know get a development strategy in place and for some countries it might be a 50-year program you're not going to get there overnight but the goal should be to try to get as much policy space to operate in as you can you want as much domestic policy space as possible and not every country has a lot and we recognize that so distributional consequences i mentioned beardsley rumble the 1946 paper um taxes for revenue are obsolete rummel said taxes are important for these reasons he talks about inflation he talks about distribution he said you know the government might put up a new tax it might increase or decrease an existing tax you make changes to the tax code he said not because you need the revenue it's not about the revenue but because you care about the distribution of wealth and income and it might you might reach the point where the distribution becomes so extreme this is what keynes told us in the first sentence of the last chapter of the general theory right the two great failures of our the economic system in which we live are its failure to provide for full employment and it's arbitrary and uh unjust distribution of income so sure you can use the insights of mmt to help you think about the tax code and using taxes and put revenues out of your head completely but understand that it can be an important way to affect the distribution and of course it's not just through taxes you can also do that through spending pavlina chernova and her new book on full employment uh job guarantee program it's about bottom-up instead of this top-down trickle-down supply-side stuff investments in the economy from the bottom up that also help to close or narrow um these gaps uh so quick thoughts very good very clear thank you very much indeed um uh the ambassador for chile uh would you like to come in and speak 


um uh with any questions to professor carlton thank you very much um angus and thank you very much professor kelton for your presentation just a couple of points one is um what about political economy arguments in the sense that it's you know when you have uh what you call the orthodox approach uh you have in place a number of institutions that are there for uh trying to somewhat prevent uh this inflationary tax from going up too much uh and that works i mean this uh independence of uh the central bank and is the distinction between monetary and fiscal policy everything of that sort is is not only uh an accounting process but but also a political economy game that is there for the purpose and that purpose is to keep inflation uh at bay uh otherwise um you will have to do something else for example uh in terms of what you are presenting here what what is this balanced economy concept being built uh is is it uh because in the end it is a key concept because if you don't uh get it right and you apply it right with the uh appropriate chromatic and modeling tools then you could adapt with inflation very soon so uh institution uh aspects i guess are important and uh how would you deal what do you do you deal with that especially in in in less developed economies in the less developed countries and then the other is how you build this balanced economy concept from the beginning thank you.

1:26:10

Kelton：　

thank you uh for that question so you know i think that we have we are arriving at a point where we're beginning to see central bankers themselves display a great deal more humility and they've been getting there over the course of the last 10 years whether it's legard or jay powell bernanke janet yellen central bankers are telling us now in a way that they didn't 10 years ago that our toolkit is limited and you know in the old days it was very much oh we've got this sort of uh an attitude there's almost no uh economic downturn that we can't address successfully with our tools and uh you know they're openly now saying we don't have this and we we will not get where we need to be without an active fiscal partner along the way everybody you know i think the world's top major central bankers are saying this so look inflation is very tricky daniel tarulo was a member of the fed board of governors he rolled off his term expired he rolled off a couple of years ago and he went out and he gave a speech and in that speech he said the central bank the federal reserve has no model of inflation.

 we do not know we do not know so this idea that we walk around with that central banks actually know and understand inflationary dynamics where inflation comes from how it starts and that they have the tools to manage it i think ish the evidence is not strong for uh for that and i think that if central banks could in fact deliver on their own uh mandates they would surely have done it by now you look at japan and you know you've got a central bank that's tried for three decades to hit its own two percent inflation target they can't get there they've had large fiscal deficits for 30 years the largest debt to gdp ratio in the world uh i was in tokyo in the summer of 2019 and all of the concern was about a yen that was too strong and inflation that was too low the 10-year on jgbs is pinned at zero they can't get inflation durably up to one percent over time so we don't have uh good models and good understanding of inflationary dynamics and i think that's where a lot of the research is headed i know louis philippe mentioned um you know i i don't think that this is missing from mmt lethally but i do think that it's de-emphasized often when we talk about inflation and supply constraints because it is about a struggle over income shares and i wouldn't say that central banks are just aiming to manage inflationary pressure they're aiming to manage wage pressures okay which they think feed through into higher prices so uh mmt's answer and i'll close with this is this strength this idea that you strengthen the automatic stabilizers in her last speech at jackson hole when she was leaving as fed chair janet yellen gave this speech in which she said um we are asking central banks to do too much they don't have the tools to deliver uh on everything that we have asked them to do to manage the economy lay a solid foundation for a recovery what we really need she said are stronger automatic stabilizers and that is where the mmt proposal for building on minsky with employer of last resort or a job guarantee takes the guesswork out of managing the budget response the fiscal response to changing economic conditions so if you have a federal job guarantee program in place the budget is automatically expanding when the economy turns down workers move into public service employment they're paid a fixed wage that anchors the price level workers skills are maintained and this is what janet yellen talks a lot about in powell now about scarring effects and long-term unemployment the longer you remain unemployed the harder it is for you to ever find a job you become unemployable so this program is a way to keep people employed maintain and upgrade skills and release workers back to the private sector when the private sector is ready to hire them back and it gives them the ability to reach into a liquid pool of employed workers and bid them away at a small premium versus trying to hire around the long-term unemployed higher from their competitors at much higher wages bidding those .

so that's why we say it's a better automatic stabilizer and a better price anchor we think that this is actually a very good way to lock in some anti-inflationary protection right some inflation insurance through the introduction of a program like this.

／／／

great thank you very much indeed professor carlton um professor uh you have a question to ask uh can i just say to everybody if you would like to ask a question we've got about eight minutes left please just type into the chat and i'll do my best to catch it.



keen:

that's more more a statement than a question i'm showing here a graph of the government deficit over time and want to point out that the one period of sustained government surpluses was during the 1920s and what if what i mean the long argument to get that we don't have time to go through that.

 but that actually caused the private sector to borrow roughly five dollars for every one dollar the government uh paid it to debt down leading to a private debt over uh explosion that was followed by the great depression so in this sense i see a symbiosis between the government running deficits in the private sector that's very different to the vision that is conventional economics uh the manicure stuff that stephanie were talking about we need to understand that because i think uh people who think they're doing the private sector a favor by reducing government deficits and even running surfaces are actually quite potentially pushing the private sector into more and more private debt with the likelihood of a deflationary crisis afterwards.

:keen

deepl:


ケルトン　


質問ありがとうございます。私が思うに、私たちは、中央銀行員自身がより謙虚な姿勢を示すようになってきています。ジェイ・パウエル・バーナンキ・ジャネット・イエレン 中央銀行家は今、10年前にはなかったような言い方をしています 我々のツールキットは限られています。世界の主要な中央銀行のトップが、このように言っています。インフレは非常に厄介な問題です。ダニエル・タルーロは、連邦準備制度理事会のメンバーでしたが、任期満了で退任し、数年前に退任しました。


 中央銀行はインフレのダイナミクスを実際に知っていて、理解しているという考え方は、インフレがどのようにして始まるのか、それを管理するためのツールを持っているということを、私たちが歩き回っていますが、その証拠はあまり強くはありません。日本を見てみましょう 中央銀行は30年間、2％のインフレ目標を 達成するために努力してきましたが 達成できませんでした 30年間、大規模な財政赤字を抱えていました 世界最大の債務対GDP比率です 私は2019年の夏に東京にいました すべての懸念は円高とインフレ率が低すぎることでした 年単位のインフレ率はゼロに固定されていて、長期的に１％まで持続的にインフレ率を上げることはできないので、良いモデルやインフレダイナミクスの理解ができていないのです。 インフレと供給制約の話をするときによく強調されるのは、所得シェアをめぐる争いのことで、中央銀行はインフレ圧力を管理することを目的としているとは言いません。これがこの強さです 自動安定化装置を強化するという考えです ジャネット･イエレン議長が退任する際に ジャクソンホールで行われた 最後の演説で 彼女は次のように述べました。景気が回復するための強固な基盤を築くには、本当に必要なのは、より強力な自動安定化策だと彼女は言っています。それは、ミンスキーの上に最後の砦の雇用主、または雇用保証を構築するというMMTの提案が、予算の対応を管理する上での当て推量を奪います。 失業期間が長くなればなるほど、失業者のままでいることは難しくなりますので、このプログラムは、民間部門が再び雇用する準備ができているときに、雇用された人々を維持し、スキルをアップグレードし、民間部門に戻って労働者を解放する方法であり、それは彼らに雇用された労働者の流動的なプールに到達する能力を与え、それらを入札するはるかに高い賃金で彼らの競争相手からより高い長期失業者の周りを雇おうとするのではなく、小さなプレミアムでそれらを離れて入札します。

だからこそ、より良い自動安定装置であり、より良い価格固定装置であると言うことができる。

／／／

ありがとうございます 本当にありがとうございます カールトン教授......教授........質問があるようでしたら.......皆さんに言わせて下さい........あと８分しかありませんので........チャットに入力して下さい........

"キーン

これは質問というよりは声明です 政府の赤字の推移をグラフにしたもので、政府が持続的に黒字を維持していたのは１９２０年代です。

 政府が支払った１ドルに対して、民間部門は、約５ドルの借金をしました。民間の借金が爆発的に増え、その後、大恐慌が起こりました。このような意味で、政府が民間部門で赤字を出していることと、

ステファニーが話していたマニキュアの話を理解する必要があります。政府の赤字を減らすことで民間部門のためになると思っている人たちは 滑走路でさえも、実際には民間部門をますます民間の負債に追い込む可能性があり、その後のデフレ危機の可能性があるのです。

キーン

:deepl

//

 uh thank you very much indeed professor um i have to see if there's further questions uh alan kerman would you like to ask a question you're on mute 

that's it unmute myself there you go thank you um stephanie i have really just a very quick sort of questions and remarks people are so terrified by the idea that stuff cannot be paid back that in my childhood i remember consoles which are being issued by governments with no obligation to pay them back unless they chose to do so so the idea that you have debt and churchill actually issued the debt of that sort so i just like your a quick comment on uh why did consoles disappear actually and why were they if you were worried about being paid that why were they such a bad thing second thing is it might just have been worth in this conversation about why can't everybody print their money just to say a couple of words about bitcoin and things of that sort which are now uh of course people go to jail for creating things like that but it's still interesting bitcoin itself hasn't gone through that but some of the monies that were issued have gone through it and my last question was you know everybody talks about sanctity of separating monetary and fiscal policy but it seems from everything you said and what's going on that in fact these things are highly inseparable and uh i just like your reaction to that thanks.


Kelton:

thank you uh well they are highly inseparable i mean this the the myth of the independent central bank is very strong and in my view you know and mmt economists have written quite a lot about this um central bank independence really means something very narrow right i mean the central bank is a creature a creature a creature a creature is a creature of government right the federal reserve act of 1913 created the fed and powell has been testifying uh before congress over the last two days since made it very clear that if the fed were to consider things like fed accounts and other things that they would need the permission of congress in order to do these things so independence means that congress gives the fed a mandate doesn't tell them exactly how to try to achieve the mandate gives them discretion over setting the interest rate but you know there is great interdependence in just about every other way in the sense that you know as steve was showing if congress commits the funding the fed is the government's bank it is the it is the entity that will carry out the payments so the fed cannot say to congress actually i don't think we'll be clearing those checks today we've decided that that's uh irresponsible spending that you've proposed there no the the payments will clear the fed will clear them the fed can fight congress and has over uh over the years periodically by raising interest rates when congress is trying to do something expansionary.

but the independence at the um at a core level is is very real right uh they are intertwined on a day-to-day basis coordinating with one another the console question you know i don't know maybe steve knows the history.

 i don't know except that it you know i i think i would probably guess or speculate that the idea was that these were you know in our case war bonds that the goal was to get cash out of people's hands because the government did not want to be spending a lot of money on the war effort paying people and have their income then chase after goods and services as the government was trying to transform the economy into a war economy and away from a consumption driven economy so it was about mitigating inflationary pressure and having the option to come in and remove those bonds and replace them with cash at a later date when they felt it was safe to do so sounds a lot like what we did with patriot bonds and war bonds the goal was to get the cash out of the people's hands and replace it with something that couldn't be readily spent uh into the economy um your other was one question sandwiched in between my favorite topic bitcoin is for me it's not money it's not a currency it is purely a speculative um instrument it's like a digital collectible right it's like a featureless one of my friends calls it like a featureless glass b limited edition uh collectible it uh it is one regulation away from bitcoin equals zero.

uh in my view i mean you can hear powell talk about central bank digital currencies you can hear yellen make a few comments and bitcoins down five thousand dollars it's it yeah i mean.

keen:

 i might i might just add some stuff there stephanie i think the failure of the bitcoin is is not money like money has three aspects unit of account means a transaction store of value bitcoin is brilliant at the last one because it's increasing in value but that means it's not only used at all for transactions.

 and the number of transactions it can support right now the actual bitcoin network is roughly three per second uh i think there's more than three per second contact transactions taking place in paris um so it's not yet set up for transactions.

 there are other forms which could work uh i think in that sense there's a consensual end element to money you don't have to have money being based on taxation for compulsion.

 it can be used in settlement uh but they haven't achieved that yet none of none of the cryptocurrencies i've seen have got there.

Kelton：1:28:10?

no no government is going to allow cryptocurrencies to usurp their.

keen：

 uh yeah.

Kelton:

currency issuing capacity and policy space .

keen:

and the power that bitcoin is using also at some point it will be shut down for power consumption levels apparently that's equivalent to argentina.

Ａ：

but it's just a sophisticated bubble right?

keen:

yeah 

deepl:

ケルトン

私の見解では、独立した中央銀行の神話は非常に強力であり、MMTの経済学者はこのことについてかなり多くのことを書いていますが、中央銀行の独立性は非常に狭い意味を持っています。1913年の連邦準備法で連邦準備制度が創設されました。 パウエルはこの２日間、議会で証言しています。 連邦準備制度が創設された後、連邦準備制度の口座などを検討するには 義務をどのように達成しようとするかを 正確には教えていません 金利設定の裁量権を与えています しかし、他のあらゆる方法で 大きな相互依存性があることを知っています スティーブが示していたように 議会が資金提供を約束した場合には 連邦政府は議会には言えません 今日は小切手の決済はしないと思います あなたが提案した無責任な支出だと 判断したのです


しかし、中核的なレベルでの独立性は非常に現実的なものであり、彼らは日常的に絡み合っており、互いに調整しています。


 私は知らないのですが、私たちの場合は戦争債というのが目的だったのではないかと推測しています。政府は戦争に多くのお金を使いたくなかったので、人々にお金を払って、その収入を財やサービスに追わせたくなかったからです。それが安全だと思ったときに 後日、彼らはそうしてもいいと思った パトリオット債や戦争国債でやったことと似ています 目的は、人々の手から現金を奪い、それを簡単には使われないものに置き換えることでした 経済のために... あなたのもう一つの質問は、私の好きな質問の間に挟まれていました。私にとってビットコインはお金ではありません 通貨でもありません 純粋に投機的な道具です デジタル・コレクターのようなものです 私の友人の一人は、特徴のないガラスのB限定版のようなものだと 呼んでいます


私の見解では... パウエルが中央銀行のデジタル通貨について 話しているのを聞くことができます イェレンのコメントを聞くことができます そしてビットコインは ５千ドル下落しました


キーン


 ステファニー ビットコインの失敗は お金ではないと思います お金には３つの側面があります 口座単位とは取引のための価値の貯蔵庫を意味します ビットコインは最後の１つに優れています 価値が上がってきていますが 取引にしか使われていないわけではありません


 ビットコインがサポートできる取引の数は今のところ、実際のビットコインネットワークは大体毎秒３件だと思いますが......パリでは毎秒３件以上の取引が行われています。


 他の形態でも通用すると思いますが......そういう意味では、お金には合意の上での最終的な要素があると思います。


 決済に使うこともできるが、私が見てきた暗号通貨の中では、まだそれを達成していない。


ケルトン：1:28:10?


いや、政府は暗号通貨が政府を簒奪することを許さないだろう。


keen： 鋭いですね。


 ええと、ええ


ケルトン


通貨発行能力と政策空間 .


キーン


ビットコインが使用している電力もある時点で停止されます 消費電力のレベルではアルゼンチンと同じですね


Ａ：


でも、ただの洗練されたバブルですよね？


キーン


"えぇ 

:deepl

Ａ：

and on that note um professor kelton can i uh first of all thank you very much indeed for first of all being um such a good sport and taking so many questions uh but also for the clarity of your position that you put forward uh it's very much appreciated i'm sure by everybody on the call and i was reminded when alan said about consoles um the reinhardt and rogoff book which of course says that i hate to be parochial but we brits somehow defaulted after the war actually was a console which got restructured it's not a default uh so um you know just plot the flag there um in terms of uh where we go from here i think it is extraordinary we think back only two decades ago though we were wondering whether we paying back all of the government debt and we're actually running a surplus which seems that the world has changed so much in two decades it's such an uncertain world where you know what was received wisdom not so long ago is being turned on its head i think that this is a very valuable contribution to the debate and i thank everybody for their contributions and for taking part and um i uh thank the oecd in particular for uh hosting such events and for hearing both sides of the debate so thank you very much indeed and i wish you a very good day thank you thank you thanks stephen recording stopped you

 

00:02
can you hear me
00:04
i can hear you excellent welcome my name
00:07
is anx armstrong so i'm going to be
00:09
chairing today's event
00:11
hi angus hi um very nice to see you
00:14
again
00:16
have someone else join here
00:20
now will we be able to share our screens
00:23
because currently we cannot and i just
00:25
have a few slides
00:27
okay we'll take care of that but we're
00:28
going to start now so um
00:30
angus do you want to go ahead yep thank
00:33
you and
00:33
welcome everybody to this nike oecd
00:37
seminar on modern monetary theory or mmt
00:41
my name is angus armstrong i'm director
00:44
of the esrc's
00:45
rebuilding macroeconomics which is
00:48
hosted at this rather lovely building
00:50
behind me
00:51
the national institute for economic and
00:52
social research in london
00:54
and just for full transparency i'm also
00:56
the chief economic advisor
00:58
to the lloyds banking group here in
01:00
london
01:02
let me introduce our speakers for today
01:04
our keynote speaker is professor
01:06
stephanie kelton
01:08
who is professor of economics and public
01:10
policy at stony brook
01:12
university and a senior fellow at the
01:14
schwartz center
01:15
for economic policy analysis now
01:18
professor kelton as i'm sure
01:20
many of you know has recently published
01:22
an enormously successful
01:23
and influential book which is the title
01:26
of today's presentation
01:28
the deficit myth modern monetary theory
01:30
and the birth of the people's
01:32
money welcome professor calton
01:35
nice to be with you our three
01:38
discussants in order of which they will
01:40
be speaking
01:40
are ambassador william robson
01:44
who is the representative for australia
01:46
to the oecd
01:48
and prior to joining the oecd dr robson
01:50
was an academic economist
01:52
chief economic advisor to the prime
01:55
minister
01:56
and also worked in a private sector at
01:58
senior levels
02:01
our second speaker is professor steve
02:04
kean
02:04
professor of economics and a well-known
02:06
critic of orthodox economics
02:09
professor keane is probably most well
02:11
known for clear
02:13
warnings ahead of the global financial
02:15
crisis of what might follow
02:18
and our third speaker is professor
02:24
university ontario canada has published
02:27
on many aspects of economics mostly from
02:30
a heterodox perspective
02:31
and also editor of the review of
02:34
political economy
02:35
so welcome to all of you now the
02:38
schedule for the seminar it will be as
02:40
follows first of all professor calton
02:41
will be asked to speak for up to 35
02:43
minutes
02:45
and then each discussion will be given
02:47
seven minutes to respond
02:50
i'll then return back to professor
02:51
kelton to make any comments on any of
02:53
the remarks that have been made
02:56
before opening up to a general
02:57
discussion now for the discussion
02:59
if you'd be kind enough to type in any
03:01
questions to the chat
03:03
either if you come online or those who
03:05
are not online
03:06
if you can type into the chat then i'll
03:09
collect any questions from there and put
03:11
them to
03:11
any of the speakers or to the panel
03:15
please do respect the time limits
03:16
because we only have an hour and a half
03:18
for the full seminar
03:21
and finally if i can ask all of you when
03:23
you're not speaking to go on to mute to
03:25
minimize the background then that will
03:27
be very helpful
03:30
finally before we start i'd just like to
03:31
make two points the first
03:33
one is that whatever side of the debate
03:36
of many issues that we find ourselves
03:39
taking it's vital that we find a space
03:41
to hear other points of view
03:43
of course many issues become politicized
03:45
but i think it's only through listening
03:48
to both sides of debates can we really
03:50
serve our communities and constituents
03:53
well so uh thank you very much indeed
03:55
for taking part in this
03:57
event second the work
04:00
and seminars of the nike directorate of
04:03
the oecd
04:04
has in my view i know many others in the
04:06
uk
04:08
really made the oecd the most credible
04:10
multilateral for discussing new ideas
04:13
until we find
04:14
the secret to the universe i think it's
04:17
extremely important this role continues
04:19
and i want to congratulate the oecd on
04:22
its success
04:24
professor carlton can i pass over to you
04:27
to speak
04:28
and you have 35 minutes thank you 
 
／／／／／／／／
04:32 
thank you um angus and thank you for the
04:35
invitation
04:36
opportunity to spend a bit of time with
04:39
all of you this morning i do appreciate
04:41
that
04:42
i know we're going to keep on schedule
04:45
so i
04:45
am going to jump right into this i
04:47
wasn't entirely sure
04:50
uh what the audience was going to be
04:52
like i know this is open to the public
04:54
and
04:55
so uh i am going to present
04:58
um do i have to do
05:02
i think i'm good i'm going to present
05:04
this uh
05:05
in a way that i hope is both reflective
05:08
of the
05:08
some of the you know central tenets of
05:11
mmt the substance
05:13
of of the framework but also accessible
05:16
to
05:17
anyone who might be joining that does
05:18
not have uh
05:20
much or any background in economics so
05:22
here we go um
05:24
i think i'm going to start off you know
05:26
i love mark twain so i start off
05:28
as i do in the book with a quote from
05:30
mark twain uh of course the great
05:32
american
05:33
uh humorous satirist it ain't what you
05:36
don't know that gets you into trouble
05:37
it's what you know for sure that just
05:39
ain't so so
05:41
you know i and i think steve and and
05:44
louis felipe will
05:45
probably agree um because you know in
05:48
many ways the three of us
05:50
have been doing the kind of thing that
05:52
steve wrote about in his book
05:53
debunking economics which is trying to
05:55
fix what we perceive to be
05:57
some very broken thinking around some of
06:01
the bigger ideas in economics including
06:04
you know the nature and role of money
06:06
and taxes
06:08
debt and deficits and so forth so what
06:10
i'd like to do is just
06:12
lay out what we're all familiar with
06:14
first at least
06:15
you know those of us that work in this
06:17
space
06:18
uh the conventional views and really
06:21
juxtapose
06:22
them with what i think is
06:25
more accurate descriptively of the
06:28
mechanics of government finance the
06:30
nature of the monetary system
06:32
so the conventional views are familiar
06:34
to all of us
06:35
they are the the narratives that are
06:38
most commonly reinforced
06:40
in uh by politicians by you know the
06:43
media press and so forth
06:45
this idea that margaret thatcher and
06:48
others gave us
06:49
very uh long ago the idea that the
06:51
government
06:52
has no source of its own money there is
06:55
no public money she told us
06:56
there is only the money that people earn
06:59
themselves there really is only taxpayer
07:01
money and
07:02
if you study economics of course you
07:04
know you're introduced at some point
07:06
to this concept of money usually
07:09
uh the story is that markets uh invent
07:13
money
07:13
right that money arises spontaneously
07:16
usually to overcome the inefficiencies
07:19
that are associated with barter
07:21
the state if it comes in at all comes in
07:24
at the end mainly just to sanction what
07:27
the private sector has already decided
07:30
to identify choose use to serve as
07:34
mostly a medium of exchange to
07:35
facilitate
07:38
exchange to make it more efficient and
07:40
so forth so the state
07:41
plays very little role by the time you
07:43
get to public finance
07:45
you're really in a thatcher world the
07:48
idea is that the taxpayer
07:49
is at the center of the monetary
07:52
universe
07:53
again with thatcher she says i have to
07:56
keep moving the
07:58
images of all our boxes the state if it
08:00
wishes to spend more
08:02
can do so only in one of two ways it can
08:05
borrow your savings
08:06
or it can tax you more it's no good
08:08
thinking she says that someone else will
08:10
pay
08:11
that someone is you there is no such
08:14
thing as public money there is only
08:17
taxpayer money so this is what we're
08:19
accustomed to hearing right that the
08:21
government is
08:22
financially constrained much like a
08:24
household
08:25
face is a budget constraint and because
08:28
this is the way we usually think about
08:30
things we always hear our politicians
08:33
and pundits and others ask this question
08:36
the nagging question
08:37
is how will you pay for it right where
08:40
is the money going to come from
08:41
how will you pay for it and you know
08:44
when i was
08:44
doing graduate work like so many others
08:48
who study economics at that level we
08:50
used olivier blanchard's textbook
08:52
and it's not just of course blindshard
08:54
but the mainstream texts in general
08:57
present public finance as if the
08:59
government has
09:00
three choices three different ways to
09:02
pay the bills and it can choose
09:04
to raise taxes come up with the revenue
09:07
it can
09:08
choose to borrow that might be an option
09:11
or it always has this third option which
09:13
is called printing money
09:15
but that option is quickly removed as
09:18
the sort of
09:19
last refuge of a banana republic and so
09:22
what we're
09:22
ultimately left with is what margaret
09:25
thatcher told us
09:26
that there you can borrow our savings or
09:28
you can tax us
09:29
more so in the book i offer the reader
09:33
this little mnemonic
09:34
just to help sort of frame the
09:36
conventional way of thinking
09:38
which is what i call the tabs model so
09:40
tabs is taxing and borrowing
09:43
governments can tax and borrow that's
09:45
how they come up with the money
09:47
and only once the financing has been
09:50
secured
09:51
are they in a position to spend the
09:53
spending is
09:54
secondary you must first find the money
09:57
okay so we get into things like this
10:00
where everyone is in a never-ending uh
10:04
you know search for the money where is
10:06
the money so we have
10:08
you know here i i'm just sharing with
10:10
you a tweet
10:12
from uh the staff director of the u.s
10:15
senate budget committee i worked
10:17
alongside
10:18
both of these men warren gunnels and of
10:20
course here senator bernie sanders
10:22
and this is a fairly recent tweet put
10:24
out by the staff director
10:26
of the u.s senate budget committee
10:27
saying listen we have a plan to make
10:29
public colleges and universities tuition
10:31
free
10:32
cancel some student loan debt all we
10:34
need
10:35
is a small tax on wall street
10:37
speculation
10:38
financial transactions tax we can come
10:40
up with all the revenue we need
10:42
and we can afford to do these things so
10:44
this is very much
10:46
ingrained in the thinking in the way we
10:49
approach the federal budgeting process
10:51
the idea that you know your programs are
10:54
supposed to be paid for
10:55
and so we have you know budgetary rules
10:58
in place like
10:59
pago that have lawmakers looking to
11:02
secure the financing
11:04
show where the money will come from so
11:06
that you can demonstrate to the
11:08
congressional budget office
11:10
uh that you can accomplish things in a
11:12
revenue neutral well deficit neutral
11:15
uh sort of way so finding the money is
11:17
important
11:18
living within your financial means
11:21
paying attention to the fact that
11:22
ultimately
11:23
you are revenue constrained this is
11:25
again all the conventional thinking
11:27
so we get to deficits there is just
11:30
sort of something inherent in our
11:33
thinking about
11:34
public finances and where the budget
11:36
ought to land
11:37
at the end of the fiscal year balanced
11:39
budgets are
11:40
good and and should be sought after
11:45
deficits are evidence that something's
11:47
gone wrong right deficits are evidence
11:49
of overspending
11:51
and they're considered fiscally
11:52
irresponsible yes there
11:54
are moments in time when a deficit
11:58
becomes
11:58
uh necessary gee we'd rather not have to
12:01
do this
12:02
but we have coveted crisis or you know
12:05
other emergencies so we're going to
12:07
temporarily run deficits
12:09
but we understand that this poses a
12:12
number of risks so
12:14
ultimately what we want is a plan to
12:16
restore the budget
12:17
to its proper place balance and we may
12:20
need fiscal rules or
12:22
other mechanisms to force the budget
12:26
back into balance
12:27
over time the idea being that there is
12:29
some
12:31
sustainable path for the fiscal
12:33
trajectory and that budgets must be
12:35
kept on that sustainable path okay so we
12:38
talk about government's borrowing if you
12:40
have a deficit
12:41
then by definition the government is
12:44
spending more than it is collecting
12:46
in tax revenue so we imagine that as a
12:49
shortfall
12:50
that must be covered somehow and the way
12:52
the government is supposed to cover the
12:54
shortfall of course is through borrowing
12:56
just as thatcher told us so this is
12:59
a an image taken straight out of greg
13:01
mancu's uh
13:02
textbook which of course the the
13:03
best-selling uh economics textbook on
13:06
the market
13:07
and uh and mancu just presents it this
13:10
way
13:10
that when governments run deficits they
13:13
have to find the money to cover the
13:15
shortfall where do they go to find the
13:16
money
13:17
they go to this place called the
13:18
loanable funds market there
13:20
is somewhere out there uh some available
13:24
supply of savings again as thatcher told
13:26
us
13:26
the savings are there and they are
13:28
available to be loaned out the problem
13:31
is that the government
13:32
is not the only borrower in town
13:36
but government has to compete with other
13:38
borrowers and the bigger the
13:39
government's deficit
13:41
the bigger a piece of that available
13:44
savings the government is going to take
13:45
away
13:46
leaving behind of course fewer savings
13:49
to be loaned out to everyone else so the
13:51
story is
13:52
that governments are in competition with
13:55
other borrowers
13:56
for a limited supply of scarce savings
14:00
that the more intense that competition
14:02
gets the higher the price goes so
14:04
deficits drive interest rates
14:06
up as interest rates go up private
14:08
borrowers are crowded out of the market
14:10
so private investment spending falls and
14:12
we're told that ultimately this
14:14
is bad for the economy because private
14:17
investment is thought to be
14:20
generally if not always more efficient
14:22
right so you're elbowing out the more
14:24
efficient use of those funds
14:26
in order to finance government deficits
14:28
and what you're left with is a
14:30
you know less dynamic slower growing
14:32
economy
14:33
over time so on interest rates i just
14:36
said deficits worth told drive
14:38
up interest rates the short-term
14:41
interest rate we understand uh
14:44
to be under the control discretionary uh
14:46
control of the central bank central
14:48
banks are supposed to move the
14:49
short-term interest rate around
14:51
to try to stabilize the macro economy
14:53
manage the business cycle
14:55
this is okay because we have very wise
14:58
technocrats searching for an r
14:59
star or some neutral rate of interest
15:02
over time
15:03
longer term interest rates though are
15:06
supposed to reflect
15:07
market sentiment so investors are really
15:10
in charge
15:12
at the end of the day and governments
15:14
that have to borrow
15:15
on capital markets must go ha in hand
15:19
to uh to private markets
15:22
borrow funding and markets will
15:25
ultimately
15:26
decide the price of that funding and if
15:28
markets decide they're worried about
15:30
solvency debt sustainability and so
15:33
forth they will demand higher and higher
15:35
premiums next thing you know you could
15:37
end up like greece
15:38
china might wake up one day turn off the
15:40
spigot no more dollars come out
15:42
and you're you're facing some sort of
15:44
sudden stop
15:45
right a debt crisis this is all
15:47
conventional stuff
15:50
so how we talk about the debt we talk
15:52
about the debt as if it
15:54
represents a real burden on our future
15:57
right at the end of the day
15:59
deficits might be necessary covid might
16:02
have to increase the debt
16:04
but there will be some kind of reckoning
16:06
on the other side
16:07
and so you know you can you can look
16:10
and uh and i would suggest you do so
16:13
frankly there
16:14
uh i think it's really interesting to
16:16
juxtapose the mainstream thinking so
16:19
this
16:19
next bullet point that says a debt
16:21
crisis is coming
16:23
there were five economists i think from
16:26
the heritage
16:27
uh hoover hoover foundation hoover
16:29
institute
16:30
i believe uh five economists penned an
16:33
op-ed
16:34
in the washington post a debt crisis is
16:37
coming
16:38
and then they went through all of the
16:39
reasons that they believe
16:41
that the us is facing a long-term debt
16:44
crisis and what we need to do about it
16:45
actually in their view it's a short-term
16:47
crisis in response to that piece
16:50
from the conservative hoover institution
16:53
economists five uh
16:57
mainstream democrats wrote a response
17:00
including
17:00
janet yellen jason furman and other past
17:04
chairs of the council of economic
17:06
advisors five previous
17:08
cea chairs wrote in response and the
17:11
title of their piece was
17:13
a debt crisis is coming but don't blame
17:16
entitlements so the difference between
17:19
the hoover economists and the former fed
17:23
chairs that were democrats
17:26
is not a debate about whether the u.s
17:28
faces a debt crisis they all concede
17:30
that we do
17:31
it's about what's driving it what's
17:33
behind it the conservatives say it's
17:34
entitlements
17:35
the democrats say well entitlements are
17:37
part of the problem but not the whole
17:39
problem there are other drivers
17:41
and so we need a plan to deal with the
17:44
fiscal crisis and again this is
17:45
includes janet yellen so that's part of
17:49
where we are today now
17:50
switching gears how's my time okay
17:53
so now i'm switching gears okay we went
17:56
through all of the conventional stuff
17:57
that's familiar to all of us and now we
17:59
move into the mmt
18:01
framework so you know mmt
18:04
is an effort to explain how a sovereign
18:07
currency works
18:08
at the end of the day that's what it is
18:10
we are attempting to lay out
18:12
a more accurate description of the
18:15
nature of the monetary system
18:17
and the mechanics of government finance
18:19
that's what
18:20
the project has been about now some
18:22
quarter of a century that we have
18:24
um collectively a number of economists
18:27
been working
18:28
uh toward getting a better understanding
18:31
a better handle
18:32
on some of these things so we start with
18:34
the idea
18:35
that governments define the monetary
18:38
system
18:38
right you choose a currency you decide
18:42
whether you're going to float that
18:43
currency or pledge to convert the
18:45
currency into something you could run
18:47
out of
18:47
we've had gold standards silver
18:49
bi-metallic
18:51
fixed exchange rate systems and so forth
18:53
so you place yourself
18:55
somewhere along this spectrum and what
18:57
mmt was trying to do from the very
18:58
beginning was say
19:00
currency regimes matter right the nature
19:03
of the monetary system matters
19:05
and why does it matter it matters for
19:07
policy space
19:08
for what you can do with macro policy
19:11
both monetary and fiscal depending upon
19:15
the nature of the monetary system that
19:17
you're operating under
19:19
higher degrees of freedom for countries
19:21
that float their currencies
19:23
right um issue the currency
19:26
don't borrow in foreign denominated
19:29
don't take on foreign denominated debt
19:30
less policy space for countries that
19:34
adopt different monetary arrangements
19:35
right a currency board dollarize uh
19:38
enter a currency union and so forth all
19:40
right
19:41
so on money uh we don't
19:45
let the state come in at the end we
19:46
bring the state in at the very beginning
19:48
this is something that i think probably
19:50
a lot of you know the name charles
19:52
goodheart this is what charles goodhart
19:54
describes as
19:55
juxtaposing chartless views of money
19:58
with the medalist view
19:59
the medalist view was the one i went
20:01
through earlier here the state comes in
20:03
at the very beginning defines chooses
20:05
the unit of account
20:07
just as keynes told us in the treatise
20:09
on money
20:10
imposes taxes and other obligations that
20:14
are payable only in the state's
20:15
own unit of account provides the
20:19
population
20:20
with a way to settle their obligations
20:22
spends a currency
20:23
into existence that the rest of the
20:25
population can then
20:26
use to either pay taxes or buy
20:29
government bonds
20:31
so the distinction that we make and that
20:33
i make in the book this image is taken
20:35
from the book
20:36
is recognizing the difference between
20:38
being the issuer of the currency
20:40
and being merely a user of currency so
20:43
you know individual states cities in the
20:46
u.s currency users
20:47
businesses big and small currency users
20:50
households currency users which are
20:52
precisely why
20:54
congress the federal government has been
20:56
coming through
20:57
with income support and relief for small
21:00
businesses for large businesses for
21:02
households for state and local
21:03
governments because
21:04
the federal government can do what the
21:06
rest of us can't do
21:08
it can spend money it does not have it
21:10
can commit to spending money
21:12
without having that money on hand right
21:15
so
21:16
the policy space is well as i said
21:19
enlarged when you
21:20
operate with that kind of monetary
21:22
system
21:24
governments do not face a budget
21:26
constraint as conventionally defined
21:29
not a sovereign currency issuing
21:31
government they can't run out of their
21:32
own money
21:33
this was a big mistake i think in the
21:36
early years of the obama administration
21:39
i mean
21:40
you know he's elected in november of
21:42
2008
21:43
and just a few months later early in the
21:46
crisis in 2009
21:48
he's being pressed on the deficit and
21:51
the amount of money that's being
21:52
committed through the american recovery
21:54
and reinvestment he said
21:56
he was asked at what point do we run out
21:57
of money president obama said
22:00
we're out of money now we're out of
22:03
money now
22:04
and that's such a problem right because
22:08
i think most economists
22:09
and including most former obama economic
22:12
advisors
22:13
will now tell you that they did far too
22:16
little
22:16
to support the economy and that as a
22:18
result we ended up with what was a very
22:21
lackluster anemic economic recovery much
22:24
more fiscal support was needed
22:26
but we had these ideas then that we were
22:28
at risk of turning into greece that we
22:30
were running out of money that the
22:32
deficits themselves
22:33
were the problem rather than part of the
22:36
solution to the problem that we were in
22:38
so mmt is telling us that
22:41
you know the conventional story is wrong
22:44
governments only have one way to pay the
22:46
bills there isn't this menu of options
22:48
you can choose to use tax revenue
22:50
you can choose to use the proceeds from
22:52
selling bonds
22:53
there's only one way to pay all
22:55
government spending
22:57
today already is carried out
23:00
via congress sending a set of
23:02
instructions to
23:03
its bank its fiscal agent the fed to
23:07
mark up the appropriate bank accounts to
23:09
credit the appropriate reserve accounts
23:11
that's how it works so we're sending
23:13
600 1200 1400 checks out to people
23:17
those checks result they show up on
23:20
people's balance sheets as
23:22
banks and the central bank change the
23:25
numbers in people's bank accounts the
23:26
taxi and borrowing is separate and
23:28
secondary to the prior act of spending
23:32
governments can pay any debt they have
23:34
even the big ones
23:36
there is no interest burden so-called
23:40
that governments can't afford to pay
23:42
sovereign currency issuing governments
23:43
can
23:44
always meet any obligation they have
23:47
in their own currency uh even the very
23:49
big ones so
23:50
the punishment for spending too much is
23:54
not insolvency it's not that you end up
23:56
like greece
23:56
it's not bankruptcy it's inflation
24:00
right and so in mmt we view the tax
24:03
itself checking the time uh as a
24:06
the the currency itself is a tax credit
24:09
right one dollar bill
24:11
will always reduce your tax obligation
24:14
to the state by one dollar
24:15
it did it in 1850 1950 2050 it's always
24:19
good
24:20
for a one dollar reduction in your
24:23
tax obligation or other fee or fine
24:26
payable to the state
24:28
the currency is redeemed by the state
24:30
when we return it
24:32
to the issuer so while we're used to
24:35
we're accustomed to thinking of taxes as
24:37
the way the government pays the bills
24:39
right it gets the money and the more it
24:41
collects from us
24:42
the more capacity it has to spend
24:44
because it has more money
24:46
mmt says no taxes reduce the spending
24:49
capacity
24:50
of the currency user but they don't
24:53
augment or
24:54
increase the currency the spending
24:56
capacity
24:57
of the currency issuer when you write a
25:00
check to the irs you are
25:02
sending those dollars to the graveyard
25:04
they're being deleted away
25:06
they go off to die taxes are
25:09
one way not the only way maybe not
25:11
always the best way but they are
25:13
one way to relieve inflationary
25:16
pressures in the economy
25:17
so government spends dollars in
25:20
taxes drain some of them back out of the
25:23
economy okay they're drained away and
25:25
they disappear
25:26
those dollars uh you know fulfill their
25:29
life cycle
25:30
uh on deficits i just think that
25:33
you know it's astonishing to me the the
25:35
reactions that people have
25:37
just to the word deficit right because i
25:40
don't know you watch a
25:41
sporting event and you hear the
25:43
announcer say that if your team is going
25:45
to come back and win this thing they're
25:46
going to have to overcome a 12-point
25:48
deficit you know in the second half of
25:49
the game or something you say oh deficit
25:51
that's so bad
25:52
but the deficit in terms of government
25:55
deficits just the difference between two
25:57
numbers it's all it is
25:58
one of the numbers is how many dollars
26:00
they're spending into the economy each
26:02
year
26:02
the other number is how many they're
26:03
subtracting back out mostly through
26:05
taxation
26:06
so that's all we're talking about here
26:08
and then once you recognize
26:10
and get in that mindset and understand
26:13
that if they spend 100 in but only tax
26:15
90 out
26:16
somebody gets 10 right that this thing
26:19
that we refer to
26:20
as a government deficit is always
26:23
to the penny mirrored by a financial
26:27
surplus
26:27
in some other part of the economy so i
26:30
always try to impress
26:32
if i'm you know doing tv interviews or
26:35
other speaking or
26:36
talking with lawmakers every deficit is
26:38
good for someone
26:40
period every deficit is good for someone
26:42
don't think that the republicans don't
26:44
understand this because
26:46
the republicans pass these huge tax cuts
26:48
in december of 2017
26:51
and cbo estimates the cost of those tax
26:54
cuts
26:54
to be 1.9 trillion dollars now that
26:57
number should sound familiar
26:58
if you're at all paying attention to the
27:00
debates we're having in the us right now
27:02
because we are debating biden's proposed
27:05
1.9 trillion
27:06
dollar covid relief package so it's
27:08
exactly
27:09
the same cost 1.9 trillion
27:13
deficits every deficit is good for
27:14
someone the republicans used 1.9
27:17
trillion
27:18
to do corporate income tax cuts and tax
27:21
cuts for
27:21
individuals mostly that went to the
27:24
benefit of people who at least need the
27:26
help in the economy eighty-three percent
27:27
of the benefits went to people at top
27:29
one percent of the income distribution
27:31
but make no mistake that's a financial
27:33
windfall
27:34
on the other side of the ledger
27:35
democrats are trying to push through
27:37
a coveted relief package 1.9 trillion
27:40
that's going to benefit
27:41
schools state and local governments
27:44
unemployed people and so forth so
27:46
it's never about whether the deficit is
27:49
going to be beneficial or not it's about
27:51
for whom
27:52
and for what right surpluses very
27:54
quickly work the opposite way
27:56
a deficit works like a blower it blows
27:59
financial assets onto the balance sheets
28:02
of people
28:02
outside the government sector a
28:04
government surplus means the government
28:06
is subtracting
28:07
out more than it is spending back in so
28:10
a fiscal
28:10
surplus works like a vacuum it hoovers
28:14
up
28:14
financial assets from our balance sheets
28:17
so it is a problem for me that
28:20
you know there is this sense out there
28:23
that surplus equals good deficit equals
28:26
bad and what we ought to be striving for
28:28
is to put the budget back into surplus
28:30
or you know to balance it for me
28:33
and for you know the mmt goals are very
28:36
different
28:37
it's not about the number that falls out
28:38
of the budget box at the end of every
28:40
year
28:41
we don't care about that what matters is
28:43
getting
28:44
achieving a balanced economy right and
28:46
if you need a three percent deficit
28:48
to achieve a broadly balanced economy
28:50
with high employment and low inflation
28:52
three percent is your number
28:54
if it takes seven percent to deliver
28:56
that seven percent is your number if you
28:57
can get there with a surplus
28:59
of one and a half or two percent that's
29:02
your number
29:03
right the focus is the economy not the
29:06
budget outcome
29:08
okay i'm going to speed up a little bit
29:09
on borrowing i think this is a problem
29:12
i think that referring to the
29:14
outstanding stock
29:16
of government bonds as the national debt
29:18
is a problem
29:19
i think referring to the mechanics of
29:22
bond sales
29:23
as borrowing is a problem we're using
29:25
words
29:26
that are applicable to currency users
29:28
but inapplicable to currency issuers
29:31
so what really happens when the
29:33
government sells treasuries i'm
29:35
using this in the u.s context obviously
29:38
but this works in
29:39
uh in japan and in the uk and elsewhere
29:41
uh canada australia and so forth
29:44
government spends 100 into the economy
29:46
taxes 90 out down the drain
29:49
leaves behind a deposit of 10
29:52
the government has a habit a custom
29:55
right
29:55
of matching up its deficit spending with
29:59
bond sales so if the deficit is expected
30:01
to be
30:02
10 billion whatever unit we want to put
30:05
here
30:05
the government will sell 10 billion in
30:07
u.s treasuries
30:09
so what happens is you spend 100 in take
30:12
90 out you've got
30:13
10 there but immediately you recycle
30:15
those 10 dollars
30:17
into u.s government bonds it's not
30:19
borrowing
30:20
like when i borrow when i borrow and i
30:22
walk into a bank i sit down with a loan
30:24
officer i say hello i'm here to borrow
30:26
money
30:27
i am there because i don't have money
30:30
that's why i'm there
30:31
the federal government is different the
30:33
issue or the currency never has to
30:35
borrow
30:35
its own currency from anyone why would
30:38
it
30:38
it's a sure so something else is
30:41
happening and when the government sells
30:43
bonds
30:44
what it's doing is first putting the
30:45
money on the table
30:47
and then taking the the currency off the
30:50
table and replacing it with bonds
30:51
so the government is first making the
30:53
funds available
30:55
and then swapping out its
30:58
non-interest-bearing currency
30:59
for an interest-bearing form of a
31:02
monetary instrument government bonds
31:04
right
31:04
so the funds to buy the bonds come from
31:06
the prior
31:07
act of making those funds available from
31:10
spending or lending them
31:11
into existence all right speeding up
31:14
interest rates mmt understands the
31:17
natural
31:18
rate of interest to be zero well i wrote
31:21
one of the very first papers that i
31:23
published
31:24
starting my academic career was called
31:27
do taxes in bonds finance government
31:29
spending it is in that paper i think
31:31
published in
31:32
2000 uh where i go through the mechanics
31:35
of the monetary operations
31:37
the bottom line gist of it here is
31:40
that if the government is running
31:41
deficits which it generally is
31:44
um then government is usually spending
31:46
more into the economy than it is
31:48
subtracting out that leaves the banking
31:50
system flush with reserves
31:52
in the old day we didn't pay interest on
31:54
reserve balances
31:56
we the fed managed interest rates hit
31:59
its short-term interest rate target
32:01
through open market operations
32:03
so the bonds were there to absorb soak
32:06
up
32:06
excess reserves that were created by the
32:09
government's deficit
32:10
in order to achieve a positive overnight
32:13
interest rate to get the fed funds rate
32:15
above zero
32:16
if you don't intervene if you don't do
32:18
something
32:20
to take action to artificially create a
32:23
different
32:23
interest rate the interest rate you're
32:25
going to end up with
32:26
is zero so this is a paper written by uh
32:29
warren mosler and matt forstatter they
32:32
did something a long time ago
32:33
laying out the argument for why we
32:35
should really think of the natural rate
32:37
of interest as zero anything above that
32:39
is an artificially elevated interest
32:42
rate
32:43
mmt does not
32:46
hand ring over the cost of debt service
32:49
we understand that
32:50
long-term interest rates are mostly a
32:52
reflection of the expected
32:54
future path of the policy rate the
32:56
short-term interest rate
32:58
even very high interest rates cannot
33:01
bankrupt government so
33:02
the debate is changing in the u.s now
33:04
lots of people including janet yellen
33:06
are starting to make the case that it's
33:08
really
33:09
interest expense as a share of gdp that
33:12
matters not debt to gdp
33:14
we think that's wrong we recognize that
33:16
even very
33:17
high interest expense relative to gdp
33:20
and rising
33:21
does not create problems in terms of
33:23
debt service you just look back at
33:25
reagan
33:25
and paul volcker as fed chair volcker
33:28
pushed into
33:29
when when reagan took office the 10-year
33:31
on u.s government bonds was almost 16
33:35
it never fell below 7 reagan's entire
33:38
eight years in office
33:39
so reagan did not enjoy a low interest
33:42
rate environment
33:43
rates were somewhere between seven and
33:44
sixteen percent for the entire eight
33:46
year period
33:47
this did not prevent ronald reagan from
33:49
doing two massive tax cuts
33:51
huge buildup of the military tripling
33:54
the national debt
33:55
and it was all perfectly sustainable in
33:57
the sense that
33:58
there's no financing constraint on
34:00
government okay so there's no magic
34:02
threshold
34:03
what matters is how desirable is it
34:06
to pay a risk-free reward high interest
34:10
rates
34:10
to holders of government bonds i mean
34:12
it's a choice selling bonds is a choice
34:15
and the issuer can always set the price
34:17
right the interest rate that it is
34:19
willing to pay on any bonds it chooses
34:21
to issue
34:22
so there's a equity question or a
34:25
distribution question here
34:27
and then there are questions about
34:29
inflation you pay higher and higher
34:30
rates of interest that's interest income
34:32
to bondholders
34:33
so you may want to think about the
34:35
inflationary
34:36
risks um on debt
34:40
the deficit is just another way to say
34:43
net spending that's all it is right
34:45
how much you spend in versus how much
34:47
you subtract away through taxes so
34:49
just replace the word deficit with net
34:51
spending
34:52
in every document you ever read and it
34:54
will read
34:55
just as true so the debt then
34:59
is just the historical record it's the
35:01
historical look back
35:02
at all of the prior net spending
35:06
the government has ever undertaken they
35:08
are the dollars that were spent by
35:10
government
35:10
but not taxed back that are currently
35:13
sitting in the form
35:14
of very safe us government bonds or
35:17
guilts
35:18
or jgbs right that's all this number is
35:21
telling us
35:22
and there are even people now uh at
35:25
places like the st
35:26
louis fed who are writing papers saying
35:28
you know it probably would make a lot
35:30
more sense
35:31
to just look at the what we call the
35:33
public debt
35:34
as part of the broader u.s money supply
35:36
because that's really what it is
35:38
you got the interest bearing stuff and
35:40
you've got the non-interest bearing
35:41
stuff
35:42
or what the fed chooses to pay on on
35:45
reserves but but that's it think of it
35:47
as part of the broader money supply and
35:49
then you realize that paying it back
35:51
simply involves changing the composition
35:54
of the money supply
35:55
fewer bonds more reserves right that
35:57
that's all it means to
35:59
quote pay it back on inflation
36:02
mmt at its core if i had to sum it up in
36:06
one sentence i would probably say
36:08
mmt is about replacing an artificial
36:11
fake
36:12
phony imaginary budget constraint
36:15
with a real resource constraint with an
36:17
inflation constraint that is at the core
36:20
so we recognize supply constraints
36:22
matter
36:23
um part of the way that you might want
36:26
to think about
36:28
mitigating inflationary pressures is
36:30
building and maintaining capacity and
36:32
this is exactly what we're starting to
36:34
do
36:35
right by holding industries together
36:38
and maintaining loans to keep small
36:40
businesses grants really to keep small
36:42
businesses in operation
36:44
that was all about maintaining
36:46
productive capacity
36:47
right keeping a part of the
36:50
supply capacity intact there is no
36:54
inherent trade-off between inflation and
36:56
unemployment
36:58
we very much include in the mmt
37:01
framework
37:02
the idea of hyman minsky who i think
37:06
was one of the great economists of the
37:08
last century
37:09
uh minsky thought that it was sort of
37:11
crazy that we
37:13
created a uh an institution in the
37:15
central bank to serve as a lender of
37:17
last resort
37:18
to maintain liquidity of the financial
37:21
system at all times but we
37:23
ignored the fiscal side of this we did
37:26
not create an analogous
37:28
institution to maintain the liquidity of
37:30
the labor market
37:31
at all points in time he proposed an
37:33
employer of last resort
37:35
we've called it the job guarantee uh it
37:38
i
37:38
could do a whole two hours on that but
37:40
i'm not going to i'll just
37:42
leave you with that this is a way to
37:45
strengthen the automatic stabilizers and
37:48
to
37:49
impart greater price stabilizing
37:52
um features to the current system i'm
37:55
getting right to the end here
37:56
so uh here's where we are right we have
37:59
done
38:00
we're about to pass 1.9 trillion or so
38:03
here in the us
38:04
i think globally you all probably know
38:06
better than i do some 13
38:08
trillion or so has been committed around
38:10
the world to dealing with coronavirus
38:13
um large fiscal packages not offset
38:16
so you know these are adding to deficits
38:19
and
38:20
joe biden president biden is saying i
38:22
want this 1.9 trillion
38:24
for covid relief but on the other side
38:26
of this i want more
38:28
trillions more to do infrastructure and
38:30
climate and other things so the debate
38:32
is changing a lot in the u.s it's moving
38:35
away from
38:36
i think the idea that we have to worry
38:38
about solvency
38:40
constraints like last time turning into
38:43
greece and now you're hearing people
38:44
like larry summers
38:45
say well we have to worry about
38:47
overheating and that to me
38:49
puts us squarely in the mmt kind of
38:52
frame
38:53
where it's inflation risk that is the
38:55
relevant
38:56
risk and so i think we're headed for a
38:59
more interesting and fruitful debate and
39:01
i thank you
39:02
for the opportunity to run through that.
 
 
／／／／／／／／
 
39:06
professor Kelton thank you very much
39:08
indeed that was admirably
39:10
clear and uh punctual i was watching you
39:12
to the minute it's absolutely perfect
39:14
well done thank you very much indeed
39:16
ambassador robson um are you
39:19
ready for your comments please how do i
39:23
do i need to stop sharing uh stop
39:25
sharing your screen yes
39:27
how do i do that um
39:30
it's not usually it pops up with uh down
39:34
at the bottom is it where it says
39:37
oh there we are here we go perfect
39:41
ambassador robson the floor is yours
39:43
thank you thank you very much
39:45
and um welcome to all colleagues on the
39:46
line um
39:48
and thank you for uh to professor kelton
39:50
for uh um for that presentation
39:53
um there are a few pictures of bathtubs
39:55
and buckets in there i thought i was
39:56
back in 1949
39:59
with bill phillips and the old hydraulic
40:01
machines at lse and i think there's one
40:03
in a
40:04
museum in australia if people aren't
40:06
familiar with these um you can you can
40:07
go and see them
40:08
online but i did feel a bit like marty
40:11
mcfly in back to the future
40:13
um with all the water flowing everywhere
40:16
um
40:16
but i'll get to some substantive
40:19
comments i mean
40:20
my take on on this on mmt is
40:24
um i'll set it right out at the
40:25
beginning i mean i think the ideas are
40:27
wrong
40:27
um uh and i'm not alone in that i mean
40:31
if you look at you know right across the
40:32
spectrum
40:33
people like paul krugman from paul
40:35
krugman to john cochran
40:37
from uh jerome powell to phil lowe our
40:40
own reserve bank governor
40:41
um all have their concerns about it um
40:44
but i'll start with some of the
40:46
central propositions that i think i
40:48
heard in the
40:49
in the presentation um uh
40:53
one was that um government can spend
40:56
money
40:56
it doesn't have there's no conventional
40:59
budget constraint
41:00
and it can never run out of um money
41:03
this is for a government with a
41:05
so-called sovereign currency um
41:08
so i guess my initial question if i take
41:10
that to its logical conclusion is
41:13
why do we need taxes at all why don't we
41:15
just finance all government spending
41:18
um by just printing money um
41:21
so you know we've been engaged and
41:24
people on the line will
41:25
know this there's a big project at the
41:27
oecd that's been going on for many years
41:29
on digital taxation and it's a very
41:32
important project
41:34
and it comes out of the uh beps
41:38
whole agenda on corporate tax and then
41:41
on
41:41
on personal income taxes as well but
41:44
mainly corporate tax and you know part
41:47
of the concern with that project
41:49
is that you know there's there's a
41:50
concern um
41:52
uh and you know i think it's uh
41:54
legitimate that certain companies are
41:56
not paying quite unquote their fair
41:57
share in taxes
41:59
but if we take this argument to its
42:01
logical conclusion it seems to me well
42:03
there is no fair share of taxes we don't
42:05
need taxes at all we can just print
42:07
money
42:07
so i guess that's the question that
42:10
comes originally to mine and then
42:12
there's a bit of a contradiction there i
42:13
thought because we're told
42:15
before that that the government issues
42:17
money because people need to pay taxes
42:19
so
42:20
we get a bit of circular argument um as
42:23
the way
42:23
the way i heard it was that we don't
42:25
really need taxes but
42:28
um and the government can just issue
42:30
currency to pay all its bills but then
42:32
people will only accept that currency if
42:34
they because the government is telling
42:37
them they need to pay taxes in that
42:38
currency so a bit of
42:40
circularity there um some other comments
42:43
i mean why don't
42:44
individuals just issue their own private
42:48
currencies and do exactly the same
42:49
as governments why is it that
42:51
sub-national governments
42:53
don't do the same way the government's
42:55
just put up with you know being at one
42:56
end of the spectrum or individuals being
42:58
at one end of the spectrum of this
43:00
of the sovereign sovereign currency uh
43:03
continuum
43:04
why don't we all just issue our own
43:05
currencies and
43:07
and say well i never have to pay
43:08
anything back i just issue more money
43:10
and the answer to that is that well
43:13
people
43:14
um you know won't accept my currency if
43:16
they know that i'm
43:17
never going to pay it back uh and that
43:19
comes to the number of the problem that
43:22
you know there are certain governments
43:24
which you know have tied their hands
43:26
um gone into currency unions australia
43:28
is a currency union we don't have
43:30
uh you know our individual states don't
43:32
issue their own currency
43:34
um uh and you know part of the reason
43:36
for that
43:37
is that uh you know that uh
43:40
they need to to be part of that in order
43:43
to
43:44
convince people that uh they will um pay
43:46
their debts back
43:48
so you know taken to its logical extreme
43:50
the question is why wouldn't individuals
43:52
just do that because well there's a
43:54
constraint
43:54
on the on being able to do this and that
43:57
constraint is the same constraint that
43:59
various governments face um some other
44:02
natural questions why do we have debt
44:04
crises at all
44:05
why don't governments just uh and debt
44:07
crisis for
44:08
so-called sovereign currency governments
44:10
why don't uh why do we have those
44:12
at all um why do we need cost benefit
44:15
analysis
44:16
at all if this is free money floating
44:19
around
44:20
um you know there's no opportunity cost
44:23
uh you know why do we need any of that
44:25
rigor on
44:26
on government spending and project
44:28
analysis we don't have to raise the
44:30
funds by taxes we can just print money
44:32
so why do we need
44:33
all of those tools um so those are the
44:35
questions but the big one i think that
44:36
was glossed over really and it was
44:38
mentioned
44:39
um towards the end was inflation so you
44:42
know inflation is just
44:43
uh another tax it's another form of tax
44:45
and it's an insidious form of taxation
44:47
it's hidden
44:48
it's unpredictable and that's why you
44:51
know central banks
44:52
um struggled for years to get inflation
44:55
down and that takes me back to you know
44:57
the philips
44:58
era and the philips curve and we had an
45:01
era of
45:02
high inflation in the 1970s and
45:05
uh you know it was um that debate back
45:08
then
45:09
was resolved in favor of what central
45:11
banks
45:12
subsequently did uh and that was
45:15
inflation targeting and there was a good
45:16
reason for that because inflation had
45:18
these
45:18
not only efficiency costs but
45:20
distributional costs that um
45:22
you know that weren't very attractive
45:24
and it could quickly get out of control
45:27
so that's the you know we come back to
45:29
the central question if inflation is the
45:31
punishment
45:32
um then you know that's something we
45:35
we need to worry about uh and so i'm
45:38
left with that question in addition to
45:40
all the other ones but
45:41
look i thought it was a very stimulating
45:43
um
45:44
uh presentation um but i just put those
45:47
few questions
45:48
on the table to stimulate debate a bit
45:50
further so thanks very much
45:54
thank you ambassador robson um professor
45:56
keane can i
45:57
pass over to you for your seven minute
45:59
snap please
46:04
you're on me steve 
 
 
／／／／／／／／
46:11　(48:09)
okay unmuted and i'll just get my
46:13
presentation
46:14
rolling here so if you
46:18
i'm taking a similar starting point to
46:20
stephanie if you look at textbooks this
46:22
is the
46:23
framing that mainstream economists get
46:26
that the government spends more than it
46:27
collects in taxes
46:29
it has a deficit which it has to finance
46:31
by borrowing from the private sector
46:33
uh the government borrowing reduces
46:35
national saving crowns of capital
46:37
accumulation
46:38
and this gives an unjustifiable burden
46:40
on future generations and
46:42
stephanie took charts from mancue to
46:45
make that point these are quotes
46:47
now what is claimed in the deficit
46:48
method deficits actually create money
46:51
directly and actually increase private
46:53
savings
46:55
the borrowing from the project is
46:56
unnecessary and that the banking
46:58
sector's capacity to buy treasury bonds
47:01
is created by the deficit itself i have
47:03
to add here
47:05
i'm generally i've been in favor of mmt
47:07
argument throughout
47:08
some points i disagreed with but
47:10
generally accepted it
47:12
but i did not accept the argument that
47:13
the deficit creates money directly
47:15
so to check that i put it into my own
47:17
minsky software
47:19
which is a system a monetary system
47:22
dynamic software program
47:23
that lets me assess this and i found
47:25
stephanie was correct
47:26
so i want to show why that's the case
47:28
now minsky
47:30
the unique feature that minsky adds to
47:33
system dynamics programs that already
47:35
has about 30 of them in the market
47:37
dominate engineering
47:39
management to some extent uh minsky adds
47:41
what are called godly tables that let us
47:43
show
47:44
financial transactions obeying the
47:46
fundamental law of accounting
47:48
that your assets minus your liability is
47:50
equal to your equity
47:52
and it classifies all accounts uh
47:55
with financial accounts in this instance
47:57
as either an asset
47:58
or a liability or the gap between the
48:01
two which is equity
48:02
so that's the standard starting point of
48:04
a godly table
48:06
in minsky now money when you look at it
48:09
this
48:10
in an integrated sense is the sum of the
48:12
bank liabilities to the public
48:14
plus bank equity i'm leaving cash out
48:16
just for simplicity here
48:18
so i look at the the fundamental
48:20
situation for a monetary system
48:22
and this is independent of whether it
48:23
has a government running a deficit or
48:25
not
48:26
uh is simply that the assets are the
48:29
uh the the money rather is the sum of
48:31
deposits of the public at banks and
48:34
bank equity and that is identical to the
48:37
assets of the banking sector
48:39
and both of these when you look at this
48:41
in that sense to increase the amount of
48:43
money
48:44
which is to push up the sum of
48:46
liabilities plus bank equity you also
48:48
have to increase bank assets
48:50
the same in reverse to eliminate money
48:52
you have to reduce
48:54
deposits and bank equity and you also
48:56
have to simultaneously
48:57
reduce bank assets so if you look at the
49:00
basic operations
49:01
of a bank spending money and i'll just
49:03
actually i don't know if this is
49:04
actually overriding your screens but i'm
49:06
seeing
49:07
less of the audience here so i'll
49:09
minimize it this way
49:12
that that is the basic situation for
49:14
government it's spending
49:15
which increases reserves and increases
49:18
deposit accounts
49:19
it taxes which reduces reserves and
49:22
reduces
49:24
deposit accounts so spending creates
49:26
bank assets
49:27
and liabilities and taxation destroys
49:31
bank assets and liabilities now since we
49:33
know the deficit
49:34
is the gap between spending and taxation
49:37
then a deficit creates money for the
49:39
public
49:39
and also creates assets for the banks
49:42
simultaneously
49:44
uh and that is what in mancu mnt is
49:46
saying that's contrary man q
49:48
and simply accounting here is showing
49:51
mnt is correct
49:52
and man q is incorrect now that's just a
49:55
very basic section i haven't seen how is
49:57
this
49:58
what are the financial implications of
50:00
this uh
50:01
government spending uh net government
50:03
spending well
50:04
the treasury will sell bonds to the
50:07
banking sector through primary dealers
50:09
and what i'm looking at here is this
50:11
usual situation
50:13
that the bond issue is equal to the
50:15
deficit
50:17
now when you look at what's going on
50:18
there all the action is on the asset
50:20
side
50:20
of the banking ledger nothing is
50:22
happening on liability and equity
50:24
so what is going on here is a def is an
50:27
asset swap
50:28
the deficit itself has created excess
50:30
reserves
50:32
the bond sale lets the banking sector
50:36
swap non-income earning assets of
50:39
richard reserves
50:40
for income earning assets which are
50:42
bonds
50:43
so that's an asset swap and of course
50:45
the banks will take advantage of that
50:47
because
50:48
they're going from reserves which
50:50
normally earn them no
50:52
income to bonds which normally in them
50:53
and income there's nothing happening on
50:55
the banking
50:56
on the saliva and equities side so money
50:59
no money has been created
51:01
no change in the money supply occurs
51:03
because of the bond sales
51:05
now what about bonds being sold by
51:07
private banks
51:08
to either non-bank financial
51:10
institutions or directly to the public
51:12
well that actually involves uh
51:15
into the first case of selling bonds to
51:18
the central bank and that's
51:19
open market operations there's no change
51:22
in the money supply it's being done by
51:24
for a trading profit by the banks
51:25
but there's no change in the money
51:27
supply on the other hand
51:29
when the bank sell bonds to the
51:32
non-bank private sector that actually
51:34
reduces the bank assets
51:36
and reduces the liabilities at the same
51:38
time
51:39
the private sector gets an income
51:40
earning asset in exchange for the money
51:43
which they got from the deficit in the
51:45
first place so central bank bond
51:47
purchases have no effect
51:49
on the money supply bond purchases by
51:51
the public reduce the money supply
51:53
but they're actually financed by the
51:55
deficit created money
51:56
in the first instance so what the public
51:59
is doing they're swapping
52:00
non-income earning money for interest
52:02
bearing bonds
52:04
what about interest payments on bonds so
52:07
i'm looking at interest payments being
52:08
made to banks for the bonds they hold
52:10
and to the public the non-bank public
52:12
for the bonds that they hold
52:14
well that is income that is making a
52:16
change in both the asset
52:18
side and the liability and equity side
52:20
of private banks
52:21
it's generating income for the
52:23
non-government sector and increasing the
52:25
money supply
52:26
so how are they financed how does the
52:27
government pay the interest bill
52:30
now you look at the central bank and
52:33
the what the government is doing is
52:35
borrowing from the central bank
52:37
and that borrowing from the central bank
52:39
is creating money
52:40
for the private sector which of course
52:42
is a flow of income for them
52:44
as well so you have an intra government
52:46
debt which pays interest on bonds and
52:48
creates further money
52:52
now when you want to look at the entire
52:54
picture and say what are the
52:56
economic impacts of doing all this you
52:57
need a much more integrated
52:59
view than this and the mainstream does
53:02
not have an integrated view of the
53:03
financial sector
53:04
by beginning with the rationalization
53:08
that there is no
53:11
money in the system they've left out
53:13
what negative for the government
53:15
is a positive for the non-government
53:17
through all these financial transactions
53:19
so a major point that mmt makes
53:21
government deficit is a private sector
53:23
surplus
53:24
is correct government debt is a record
53:26
of net figured money creation over time
53:28
and have errors in the mainstream way of
53:30
thinking which are due to having a
53:32
partial
53:32
non-integrated model of the government
53:34
and what you can see
53:36
by looking at this properly is
53:38
government deficits aren't burdening
53:39
future generations
53:40
they're enriching current ones we need a
53:42
balance of fiat and credit money
53:44
creation
53:45
we've put the switch far too far in
53:47
favor of credit
53:49
far too low and cavalry feared and
53:50
periods of high government debt creation
53:53
are periods of high fiat money creation
53:55
which
53:56
is when we need to do things the private
53:58
sector cannot do such as for example
54:00
fight wars and fight pandemics
54:05
and those things are necessary for a
54:08
functioning society
54:10
thank you professor keane thank you very
54:12
much indeed
54:13
um our third discussant uh professor
54:15
roshan can i
54:17
pass over to you to speak please
54:29
you're on mute cue
54:34
there you go thank you very much uh
54:36
happy to be here uh the first thing i
54:38
want to say
54:41
i don't know why this is not working now
54:47
okay well i i just won't share and i
54:49
will just speak uh
54:54
okay it's working first i want to
54:56
acknowledge that i'm speaking from
54:57
toronto
54:58
the traditional territory of many
54:59
nations including the mississaugas of
55:01
the credit
55:02
the anishi nabek the chippewa the how do
55:04
you know sony and the wendat peoples
55:06
and is now home to many diverse first
55:08
nations inward and meaty people
55:11
um i thought uh stephanie's presentation
55:14
was
55:14
excellent uh full admission i
55:18
used to be very critical of of mnt
55:21
uh and over the years i think i've come
55:23
to appreciate
55:25
a lot of it and one of the things that i
55:27
i've appreciated
55:28
is that the mainstream used to uh hit us
55:31
over the head with this argument
55:33
of tina that there was no alternative
55:36
um to to to the mainstream and what
55:40
uh mmt has done very successfully in
55:43
fact
55:43
is to show that the war there is an
55:46
alternative
55:47
and the result is that people are now
55:49
dealing
55:50
and having to deal and having to respond
55:52
to what mmt
55:54
is putting out there and this is a huge
55:56
step forward
55:57
for uh the ideas that are being uh put
56:00
forth
56:01
uh now because of time constraints um
56:03
i'll be going a bit
56:05
quick but i want to touch on a few
56:07
things first of all uh stephanie did
56:10
deal with this a little bit um we are
56:12
being always told that
56:14
uh governments cannot afford social
56:16
programs
56:18
uh social housing national daycare full
56:20
employment
56:21
uh building back greener there's no
56:22
money for that yet what this crisis
56:25
has done is that it has shown that that
56:28
is absolutely uh a ridiculous statement
56:32
uh the money is always there if the
56:35
governments want to
56:36
in canada the deficit went from 25
56:39
billion to 450 billion dollars
56:42
and this has been repeated in many
56:45
countries
56:46
around the world so i think that when
56:49
people are demanding more money to be
56:51
spent on social housing and other social
56:53
programs
56:54
the correct or the more honest uh
56:57
reply from government uh should be
57:00
no we simply choose not to uh spend
57:03
on those things and those things being
57:05
judged
57:06
you know not being essential or etc
57:09
so uh that's a more truthful approach to
57:12
public uh finance
57:14
it's not that the government cannot
57:16
spend it they just choose not to spend
57:17
it
57:18
and in essence like she said there is no
57:20
budget constraint
57:22
uh anymore and this is being recognized
57:24
more and more
57:26
um so moving forward i think that um
57:29
from this current crisis the burden of
57:32
proof is now
57:33
on those who claim there's no money
57:35
because we know there
57:36
is the money so they have to prove you
57:39
know why they choose not to
57:41
uh to spend um
57:44
and like she said of course deficits are
57:47
transferred from the public sector
57:48
to the private sector someone is uh
57:52
gaining from this public spending and
57:54
when if you say that you are
57:56
against deficits what you're really
57:58
saying is you're sort of against
58:00
private sector uh surpluses um and most
58:03
people will tell you
58:05
that of course they're in favor of
58:06
private sector surpluses but that has
58:09
you know a count apart and that's not
58:11
ideology
58:12
that's simply national accounting um
58:17
and then i'm speaking a little bit fast
58:19
but um
58:20
then finally um other consequences yeah
58:24
we could discuss the consequences to
58:25
very high deficits
58:27
is it inflationary uh et cetera et
58:29
cetera but i think that inflation
58:31
increasingly is something that we don't
58:32
understand um
58:34
the bank for international settlements
58:37
has repeatedly put out these uh
58:39
these reports that says uh you know
58:42
what causes inflation there's no
58:44
phillips curve anymore
58:46
um no trade-offs so you know
58:49
what is the cause of these inflation and
58:52
i think mmt goes
58:54
uh a bit into this personally that's one
58:57
part that i don't quite
58:58
uh agree with i'm more of a conflict
59:00
inflation person
59:02
but certainly something that we can
59:03
discuss finally
59:06
something that was not talked about but
59:08
we should talk about the crowding in
59:10
effects of government spending
59:11
uh fiscal multipliers um it's being
59:14
recognized now that fiscal
59:16
multipliers are regime dependent the
59:18
value changes through
59:19
the cycle my own research shows that
59:22
fiscal multipliers are actually policy
59:24
dependent in other words
59:26
the more government spends the bigger
59:29
the fiscal multiplier so
59:32
the idea of of incremental spending
59:37
uh in my view is a wrong way you you go
59:40
big or you don't go at all because if
59:43
you don't go big you're not going to
59:44
have
59:45
that big bang for your buck um finally
59:48
the burden of our children that was
59:50
discussed about a bit i think that the
59:53
real burden
59:54
is to leave our our children and our
59:56
grandchildren
59:57
dilapidated healthcare infrastructure
59:59
education
60:01
education is grossly underfunded
60:03
especially in canada
60:04
my own university having now declared
60:06
bankruptcy for
60:07
as an example and more to follow as well
60:13
and finally a lot of my research is
60:15
based on
60:16
the income distributive effects of
60:18
monetary policy
60:20
the social class bias the carbon bias of
60:22
monetary policy
60:24
the gender bias and these are issues
60:26
that i think
60:27
mnt should should look into because i
60:30
think it would complement the story very
60:31
well
60:32
thank you very much thank you very much
60:35
indeed and thank you to all of the
60:36
speakers for being so punctual
60:39
and professor calton you've heard a lot
60:41
from a very wide range there
60:43
so would you like to pick up a few of
60:45
those remarks we've got plenty of
60:47
questions in the chat and i want to give
60:48
the discussions another chance
60:50
but perhaps you could open up a
60:51
discussion got half an hour overall
60:53
so um i'll pass over to you to give some
60:57
thoughts back to the comments you've
60:58
heard so far please
60:59
sure okay well thank you so um
61:03
i'm gonna pick i guess as you suggested
61:06
i will choose uh
61:07
to deal quickly with a few of the bigger
61:09
questions on this
61:10
question about why have taxes at all
61:12
there must be
61:13
a hundred uh articles out there written
61:16
by mmt economists
61:18
if governments um can pay for their
61:20
spending without raising taxes why do we
61:22
have taxes at all so there's enormous
61:24
literature out there the answers are
61:26
these first of all
61:28
as i explained the tax is a way for
61:30
governments to start up a currency from
61:32
scratch
61:33
we have written i have no idea how many
61:36
volumes of scholarship is out there
61:39
but this is the first point right that
61:42
the government wants to provision itself
61:44
it wants to move real resources from the
61:46
private domain
61:47
to the public domain how does it do that
61:49
in the first instance it imposes
61:51
obligations on others
61:53
and that's important right these are
61:54
legal obligations the state as
61:57
keynes told us has the legal right to
62:00
make and enforce its tax laws so
62:02
enforceability is important the state
62:05
imposes an obligation the rest of the
62:07
population then
62:08
well or at least the segment that's
62:10
subject to that obligation to the tax
62:12
has to find a way to earn the state's
62:14
currency in order to settle the
62:16
obligation with the state
62:18
so if you were trying to start up a
62:19
currency from scratch oh i don't know
62:21
the euro
62:22
you know it's a pretty good example but
62:24
we have historical examples
62:26
as well uh uh you impose the obligations
62:29
and this
62:30
the population is then compelled to work
62:33
in exchange for that currency so the tax
62:36
gives value to what would otherwise be
62:38
worthless pieces of paper let's say once
62:41
you have a monetary system in place
62:43
up and running taxes are important for a
62:45
variety of reasons
62:47
you know i would recommend taking a look
62:50
at an
62:51
article by beardsley rummel his last
62:54
name is spelled
62:55
r-u-m-l rommel was
62:58
the chairman of the new york federal
63:00
reserve
63:01
bank i'll say again chairman of the new
63:03
york fed
63:04
rummel in 1946 published an article the
63:08
title of which was
63:10
taxes for revenue are obsolete
63:13
head of the new york fed the government
63:16
does not raise taxes for the purpose of
63:18
of getting revenue it's not what taxes
63:21
are about
63:22
he went on to explain all of the
63:24
different reasons that you have taxes
63:26
in spite of the fact that government
63:27
doesn't need to tax in order to spend
63:30
first he said taxes help mitigate
63:33
inflationary pressure you can imagine
63:35
if all we did was commit to spending
63:38
more and more and more
63:39
into the economy and never tax back out
63:42
any dollars
63:43
you would quickly undermine the value of
63:44
the currency we are preparing to move
63:47
the sixth
63:47
piece of legislation through congress
63:49
this 1.9 trillion that will be bill
63:52
number six
63:53
all six spending bills that congress has
63:56
passed
63:56
since march to deal with covid are
63:59
deficit spending it is sending one
64:01
pure set of instructions to the fed we
64:04
are going to be spending get ready
64:05
you're going to change the numbers in
64:07
the appropriate bank accounts
64:08
so we can pick uh a 600 direct cash
64:12
payment we can send 1200 we can send
64:14
1400
64:15
we could send 14 000 we could send 140
64:19
000 this is the issue right at some
64:22
point
64:23
it's going to be too much so the
64:26
relevant constraint is inflation at some
64:28
point you have to offset
64:30
your spending you will run out of fiscal
64:33
space as the economy approaches full
64:35
employment
64:36
but right now in a depressed economy you
64:38
can spend
64:39
without increasing taxes so i heard the
64:42
question
64:42
uh well how we can't just spend without
64:45
increasing taxes well sure we can we're
64:46
doing it that's what we've been doing
64:48
and congress can continue with this kind
64:50
of legislation
64:52
until it decides that it wants to start
64:54
offsetting some of that spending with
64:56
higher taxes
64:57
the point about the inflation tax is
64:59
important again
65:00
mmt centers inflation risk that is at
65:03
the core
65:04
i worked as the chief economist for the
65:06
democrats on the u.s senate budget
65:08
committee i never once
65:10
in all my time serving in that position
65:13
heard a member of the u.s
65:14
senate or a staffer talk about inflation
65:17
risk
65:18
they're writing trillion dollar
65:19
infrastructure bills proposals to
65:22
make public colleges and universities
65:23
tuition free nowhere
65:25
in any of the discussion does inflation
65:28
come in
65:28
why because that's the fed we don't have
65:30
to worry about inflation
65:32
in an mmt world if we were approaching
65:35
the federal budgeting process the way
65:37
that i would
65:38
we would be vetting proposed new
65:41
spending not
65:42
on a cost-benefit analysis not sending
65:45
it to cbo and asking for a score about
65:47
what it does to the budget outcome does
65:49
it add to the deficit
65:51
we would be doing rigorous analysis of
65:54
proposed new spending
65:56
to determine whether it carries
65:58
heightened inflation risk and if it does
66:00
what are the appropriate ways to
66:02
mitigate that risk
66:04
before we vote on to authorize the
66:07
spending
66:08
so in other words mmt is building
66:11
inflation
66:12
in in evaluation of inflation risk into
66:15
the federal budgeting process
66:16
the best way to fight inflation is
66:20
offensively not defensively you don't
66:22
want to try to chase it after you've
66:24
caused the problem you want to evaluate
66:26
your spending
66:27
vet the proposals and mitigate as best
66:30
you can
66:31
inflation risk ahead of time um
66:34
so there was a question about uh why do
66:36
why don't we all just issue our own
66:37
money
66:39
well minsky said uh anyone can create
66:42
money the trick he said is to get it
66:44
accepted
66:45
so there's there's nothing to prevent
66:48
any one of us
66:49
from entering into a contract
66:52
where money is created okay but
66:56
there is something called the u.s
66:57
constitution which includes
67:00
article 1 section 8 which gives the
67:02
united states government
67:04
the sole legal authority
67:07
to issue the currency right so
67:11
the california governor can't do it
67:13
which the the mayor of detroit
67:15
cannot issue dollars this is what
67:18
separates the issuer
67:19
from the users of currency so you could
67:22
say why don't we all i could
67:23
set up shop in my uh basement and try to
67:26
manufacture the us dollar but i assure
67:28
you that if i get caught
67:30
i'm going to end up in an orange
67:31
jumpsuit and i'm going to be behind bars
67:33
because i don't have the legal authority
67:35
to do that
67:36
i can enter into different contracts and
67:38
create different money things
67:40
but the state's currency is the ultimate
67:42
means of payment
67:43
right that is the unit in which we
67:46
settle
67:46
obligations and that is why jim tobin uh
67:49
professor tobin said
67:51
the state's money is different it sits
67:52
at the high at the top of the hierarchy
67:55
um debt crisis last thing i'll say why
67:59
do we have debt crises at all
68:01
because countries borrowing currencies
68:03
that they don't issue
68:04
so you know we could go through this and
68:06
i've done this you look at
68:08
fitch's analysis or something and
68:09
they'll say oh there are all these
68:10
examples of
68:11
sovereign governments defaulting on debt
68:13
no there aren't
68:14
uh there are examples of countries with
68:17
fixed exchange rate
68:18
regimes which i put in a different
68:20
category countries borrowing in foreign
68:22
currency uh
68:25
defaulting on public obligations but
68:28
that's a very different thing
68:30
i challenge you to find me an example of
68:32
a country
68:33
that defaulted was forced into default
68:37
on debt denominated in a
68:40
currency that it issues that wasn't tied
68:43
that wasn't convertible
68:44
i don't think you will find one there
68:47
was one example of japan that was a
68:48
voluntary default
68:50
not an involuntary default you have to
68:52
be very careful about
68:54
you know these ideas that you have all
68:56
these examples of countries that have
68:58
defaulted on sovereign debt
68:59
i i i've looked at this for a lot of
69:02
years i would be very surprised if you
69:04
can produce an example of a country
69:06
that defaulted that wasn't on that was
69:08
floating uh its currency and didn't have
69:11
any foreign currency denominated debt
69:14
thank you um let's go to my man going to
69:17
put a couple of questions try and summer
69:19
summarize a couple of questions from the
69:20
chat
69:20
and then i'm going to ask uh the
69:23
ambassadors
69:24
from uh australia and chile
69:27
to come in to ask if they want to ask
69:29
questions because i think that that's
69:30
probably
69:30
appropriate um two questions which come
69:33
out from the chat
69:35
the first one was developing the point
69:38
you just made what about
69:40
emerging market countries uh some south
69:43
american countries now you don't
69:45
have to have uh use another country's
69:48
currency you
69:48
all sorts of kinds of regimes in fact
69:50
your first slide very much went into
69:52
this
69:52
so many countries in fact uh i
69:56
suggest at least half the countries in
69:57
the world have some form of managed
69:59
exchange rate
70:00
and default isn't the only penalty here
70:03
you know you can have a dreadful mess
70:05
with the exchange rate crisis and so on
70:06
and so forth and banking problems
70:08
uh so where how does the mmt
70:12
uh approach help those countries which
70:16
at least
70:16
peg their currency to another country's
70:19
currency how does that work
70:20
uh there was a question particularly
70:22
about the euro as well
70:24
so that's one set of questions the
70:26
second set of questions was about the
70:27
distributional consequences of mnt
70:30
is this actually a vehicle by which
70:33
one could redress some of the
70:36
inequalities that have risen perhaps
70:37
through um kovind 19
70:41
or over the last 30 years it wants to
70:43
take a view that inequality
70:45
become an issue does this become a
70:47
redistributional
70:48
tool as well so i think that summarizes
70:50
those two questions perhaps i can ask
70:52
you to respond to those two and then
70:53
we'll
70:54
turn to the ambassadors okay
70:57
so thank you uh in the book i have
71:00
a whole chapter that deals i think in
71:03
pretty good detail with the first of
71:06
your questions
71:06
about emerging or developing countries
71:09
sensitivity those that are
71:10
highly sensitive to you know sharp uh
71:14
fluctuations in exchange rates and so
71:16
forth
71:17
we recognize that it is true and so you
71:20
know
71:21
you we are talking about policy space in
71:24
a way that recognizes that
71:26
if you have you know if you meet certain
71:29
criteria in terms of floating your
71:31
currency and not borrowing in foreign
71:32
debt and so forth and i would add and i
71:34
do
71:35
include this in the book that it's also
71:37
important
71:38
that um you know this thing we might
71:40
define as monetary sovereignty
71:42
also means that you can sustain a sharp
71:45
depreciation in your currency without
71:48
ending up with a lot of problems
71:49
right i mean japan can do that you can
71:51
have a 30 percent
71:53
uh drop in the value of the yen and
71:55
things don't blow up australia
71:56
as well so we have examples of countries
71:59
that can
72:00
handle you know a fairly sizable
72:03
um depreciation but they're not so
72:05
dependent on the rest of the world
72:07
for critical imports of medicine and
72:09
technology energy food
72:11
that it becomes you know widespread uh
72:15
widely problematic disruptions in the
72:17
economy so
72:18
yes and and part of how mmt can help and
72:21
we're working
72:22
with um public officials in many
72:25
developing countries
72:27
is in helping them to you know
72:30
get a development strategy in place and
72:32
for some countries it might be a 50-year
72:35
program you're not going to get there
72:36
overnight
72:37
but the goal should be to try to get as
72:39
much policy space
72:40
to operate in as you can you want as
72:43
much domestic policy space as possible
72:45
and not every country has a lot
72:48
and we recognize that so distributional
72:51
consequences i mentioned
72:53
beardsley rumble the 1946 paper um
72:56
taxes for revenue are obsolete rummel
72:59
said
72:59
taxes are important for these reasons he
73:01
talks about inflation
73:03
he talks about distribution he said you
73:05
know the government might
73:07
put up a new tax it might increase or
73:10
decrease an existing tax you make
73:12
changes to the tax code
73:14
he said not because you need the revenue
73:17
it's not about the revenue
73:18
but because you care about the
73:19
distribution of wealth and income and it
73:22
might
73:22
you might reach the point where the
73:24
distribution becomes so extreme
73:26
this is what keynes told us in the first
73:28
sentence of the last chapter of the
73:30
general theory right the two great
73:32
failures of our the economic system in
73:34
which we live are its failure to provide
73:36
for full employment and it's
73:37
arbitrary and uh unjust distribution of
73:41
income
73:42
so sure you can use the insights of mmt
73:46
to help you think about the tax code
73:50
and using taxes and put revenues out of
73:53
your head completely but understand that
73:55
it can be an
73:55
important way to affect the distribution
73:58
and of course it's not just through
74:00
taxes you can also do that through
74:01
spending pavlina chernova and her
74:04
new book on full employment uh job
74:06
guarantee program it's about bottom-up
74:09
instead of this top-down trickle-down
74:10
supply-side stuff
74:12
investments in the economy from the
74:14
bottom up
74:15
that also help to close or narrow um
74:18
these gaps uh so
74:22
quick thoughts very good very clear
74:25
thank you very much indeed um
74:27
uh the ambassador for chile
74:30
uh would you like to come in and speak
74:32
um
74:33
uh with any questions to professor
74:35
carlton thank you very much
74:37
um angus and thank you very much
74:39
professor kelton for your presentation
74:41
just
74:42
a couple of points one is
74:46
um what about political economy
74:48
arguments in the sense that
74:50
it's you know when you have uh what you
74:52
call the orthodox
74:54
approach uh you have in place a number
74:56
of institutions
74:57
that are there for uh trying to
75:01
somewhat prevent uh this inflationary
75:05
tax
75:05
from going up too much uh and that works
75:08
i mean this uh
75:10
independence of uh the central bank and
75:12
is the
75:13
distinction between monetary and fiscal
75:15
policy everything of that sort is
75:17
is not only uh an accounting process but
75:20
but also a political economy game
75:23
that is there for the purpose and that
75:25
purpose is
75:26
to keep inflation uh at bay
75:30
uh otherwise um you will have to do
75:33
something else
75:34
for example uh in terms of what you are
75:37
presenting here
75:38
what what is this balanced economy
75:40
concept being built uh
75:42
is is it uh because in the end it is a
75:45
key concept
75:46
because if you don't uh get it right
75:49
and you apply it right with the uh
75:51
appropriate chromatic
75:52
and modeling tools then you could adapt
75:55
with inflation very soon
75:57
so uh institution uh aspects i guess
76:00
are important and uh how would you deal
76:02
what do you do you
76:03
deal with that especially in in in less
76:06
developed economies in the
76:08
less developed countries and then the
76:09
other is how you build this balanced
76:11
economy concept
76:12
from the beginning thank you 


／／／／／
kelton:
thank you
76:16
uh for that question so you know i think
76:19
that
76:19
we have we are arriving at a point
76:23
where we're beginning to see central
76:26
bankers themselves
76:28
display a great deal more humility and
76:31
they've been getting there over the
76:33
course of the last 10 years whether it's
76:35
legard or jay powell bernanke
76:39
janet yellen central bankers are telling
76:42
us
76:43
now in a way that they didn't 10 years
76:45
ago
76:46
that our toolkit is limited and you know
76:50
in the old days it was very much
76:52
oh we've got this sort of uh an attitude
76:55
there's almost no uh economic downturn
76:59
that we can't address
77:00
successfully with our tools and uh
77:03
you know they're openly now saying we
77:06
don't have this
77:07
and we we will not get where we need to
77:09
be without an
77:10
active fiscal partner along the way
77:13
everybody you know i think the world's
77:15
top major central bankers are saying
77:16
this so
77:18
look inflation is very tricky daniel
77:20
tarulo was a member of the fed board of
77:22
governors
77:22
he rolled off his term expired he rolled
77:25
off a couple of years ago
77:26
and he went out and he gave a speech and
77:28
in that speech he said
77:30
the central bank the federal reserve has
77:33
no
77:33
model of inflation we do not know we do
77:37
not know
77:37
so this idea that we walk around with
77:39
that central banks
77:40
actually know and understand
77:43
inflationary dynamics
77:45
where inflation comes from how it starts
77:47
and that they have the tools to manage
77:49
it
77:50
i think ish the evidence is not strong
77:53
for uh for that and i think that if
77:56
central banks
77:57
could in fact deliver on their own uh
78:00
mandates they would surely have done it
78:02
by now you look at japan
78:04
and you know you've got a central bank
78:05
that's tried for three decades to hit
78:07
its own two percent inflation target
78:09
they can't get there
78:10
they've had large fiscal deficits for 30
78:12
years the largest debt to gdp ratio in
78:15
the world
78:16
uh i was in tokyo in the summer of 2019
78:19
and all of the concern was about a yen
78:21
that was too strong and
78:22
inflation that was too low the 10-year
78:24
on jgbs is pinned at zero
78:27
they can't get inflation durably up to
78:29
one percent
78:30
over time so we don't have uh
78:34
good models and good understanding of
78:36
inflationary dynamics and i think that's
78:38
where a lot of the research is headed i
78:40
know louis philippe mentioned
78:41
um you know i i don't think that this is
78:44
missing from
78:44
mmt lethally but i do think that it's
78:47
de-emphasized
78:49
often when we talk about inflation and
78:51
supply constraints
78:52
because it is about a struggle over
78:53
income shares and i wouldn't say that
78:56
central banks are just
78:57
aiming to manage inflationary pressure
79:00
they're aiming to manage wage pressures
79:02
okay which they think feed through into
79:04
higher prices
79:06
so uh mmt's answer and i'll close with
79:09
this
79:10
is this strength this idea that you
79:11
strengthen the automatic stabilizers in
79:14
her last
79:14
speech at jackson hole when she was
79:17
leaving as fed chair janet yellen gave
79:19
this speech
79:20
in which she said um we are asking
79:23
central banks to do too much
79:25
they don't have the tools to deliver
79:28
uh on everything that we have asked them
79:30
to do to manage the economy
79:32
lay a solid foundation for a recovery
79:34
what we really need she said
79:36
are stronger automatic stabilizers and
79:39
that is where the mmt
79:41
proposal for building on minsky with
79:44
employer of last resort or a job
79:45
guarantee
79:46
takes the guesswork out of managing
79:50
the budget response the fiscal response
79:53
to changing economic conditions so if
79:55
you have
79:56
a federal job guarantee program in place
79:58
the budget is automatically expanding
80:00
when the economy turns down workers move
80:03
into public service employment they're
80:05
paid
80:06
a fixed wage that anchors the price
80:09
level
80:10
workers skills are maintained and this
80:12
is what janet yellen talks a lot about
80:14
in powell now about scarring effects and
80:16
long-term unemployment
80:18
the longer you remain unemployed the
80:19
harder it is for you to ever find a job
80:21
you become unemployable
80:23
so this program is a way to keep people
80:25
employed
80:26
maintain and upgrade skills and release
80:30
workers back to the private sector when
80:31
the private sector is ready to hire them
80:33
back and it gives them the ability to
80:35
reach into
80:36
a liquid pool of employed workers
80:39
and bid them away at a small premium
80:42
versus
80:43
trying to hire around the long-term
80:45
unemployed higher from their competitors
80:47
at much higher wages bidding those so
80:50
that's why we say
80:51
it's a better automatic stabilizer and a
80:53
better price anchor we think that this
80:55
is
80:56
actually a very good way to lock in
81:00
some anti-inflationary protection
81:04
right some inflation insurance through
81:06
the
81:07
introduction of a program like this
／／／／

81:12
great thank you very much indeed
81:14
professor carlton um professor
81:16
uh you have a question to ask uh can i
81:19
just say to everybody if you would like
81:20
to
81:21
ask a question we've got about eight
81:22
minutes left please just type into the
81:24
chat and i'll do my best to catch it



／／／
keen:
81:27
that's more more a statement than a
81:29
question i'm showing here a graph
81:31
of the government deficit over time and
81:34
want to point out that the one period of
81:36
sustained government surpluses was
81:38
during the 1920s
81:40
and what if what i mean the long
81:42
argument to get that we don't have time
81:43
to go through that
81:44
but that actually caused the private
81:45
sector to borrow roughly five dollars
81:48
for every one dollar
81:49
the government uh paid it to debt down
81:51
leading to a private debt over
81:53
uh explosion that was followed by the
81:55
great depression
81:56
so in this sense i see a symbiosis
81:59
between the government
82:00
running deficits in the private sector
82:02
that's very different to the vision
82:04
that is conventional economics uh the
82:06
manicure stuff that stephanie were
82:07
talking about
82:08
we need to understand that because i
82:10
think uh people who think they're doing
82:12
the private sector a favor
82:14
by reducing government deficits and even
82:16
running surfaces
82:18
are actually quite potentially pushing
82:20
the private sector into more and more
82:21
private debt
82:22
with the likelihood of a deflationary
82:24
crisis afterwards

／／／／
82:31
uh thank you very much indeed professor
82:35
um i have to see if there's further
82:37
questions
82:38
uh alan kerman would you like to ask a
82:42
question
82:44
you're on mute that's it unmute myself
82:48
there you go thank you um
82:49
stephanie i have really just a very
82:52
quick sort of questions and remarks
82:54
people are so terrified by the idea that
82:56
stuff cannot be paid back
82:58
that in my childhood i remember consoles
83:01
which are being issued by governments
83:04
with no
83:05
obligation to pay them back unless they
83:07
chose to do so
83:08
so the idea that you have debt and
83:10
churchill actually
83:12
issued the debt of that sort so i just
83:14
like your
83:15
a quick comment on uh why
83:18
did consoles disappear actually and why
83:22
were they if you were worried about
83:24
being paid that why were they such a bad
83:25
thing
83:26
second thing is it might just have been
83:28
worth
83:29
in this conversation about why can't
83:31
everybody print their money
83:32
just to say a couple of words about
83:34
bitcoin and things of that sort
83:36
which are now uh of course people go to
83:39
jail for creating things like that
83:41
but it's still interesting bitcoin
83:44
itself hasn't gone through that
83:45
but some of the monies that were issued
83:47
have gone through it
83:49
and my last question was you know
83:51
everybody talks about
83:52
sanctity of separating monetary and
83:55
fiscal policy
83:56
but it seems from everything you said
83:58
and what's going on that in fact these
84:00
things are highly inseparable
84:02
and uh i just like your reaction to that
84:05
thanks

／／／／／
kelton:

84:06
thank you uh well they are highly
84:08
inseparable i mean this
84:10
the the myth of the independent central
84:12
bank is very strong
84:14
and in my view you know and mmt
84:17
economists have written quite a lot
84:18
about this
84:19
um central bank independence really
84:21
means something very narrow
84:23
right i mean the central bank is a
84:25
creature a creature
84:27
a creature a creature is a creature of
84:31
government right the federal reserve act
84:33
of 1913 created the fed
84:35
and powell has been testifying uh before
84:37
congress over the last two days since
84:39
made it very clear that
84:40
if the fed were to consider things like
84:42
fed accounts and other things that they
84:44
would need the permission of congress
84:46
in order to do these things so
84:48
independence means
84:49
that congress gives the fed a mandate
84:52
doesn't tell them exactly how to try to
84:54
achieve the mandate gives them
84:56
discretion over
84:57
setting the interest rate but you know
84:59
there is great
85:01
interdependence in just about every
85:03
other way
85:04
in the sense that you know as steve was
85:06
showing if congress commits the funding
85:08
the fed is the government's bank it is
85:11
the it is the entity that will carry out
85:13
the payments so
85:14
the fed cannot say to congress actually
85:17
i don't think we'll be clearing those
85:18
checks today
85:19
we've decided that that's uh
85:21
irresponsible spending that you've
85:23
proposed there no
85:24
the the payments will clear the fed will
85:26
clear them the fed can fight congress
85:28
and has
85:29
over uh over the years periodically by
85:32
raising interest rates when congress is
85:34
trying to do something expansionary but
85:37
the independence at the um
85:40
at a core level is is very real right uh
85:43
they are intertwined on a day-to-day
85:45
basis coordinating with one another
85:47
the console question you know i don't
85:49
know maybe steve knows the history i
85:51
don't know
85:52
except that it you know i i think
85:55
i would probably guess or speculate that
85:58
the idea was
85:59
that these were you know in our case war
86:01
bonds that the goal was to get
86:04
cash out of people's hands because the
86:06
government did not want
86:07
to be spending a lot of money on the war
86:10
effort paying people
86:11
and have their income then chase after
86:13
goods and services as the
86:15
government was trying to transform the
86:16
economy into a war economy and away from
86:19
a consumption
86:20
driven economy so it was about
86:22
mitigating inflationary pressure and
86:24
having
86:24
the option to come in and remove those
86:27
bonds and replace them with cash
86:28
at a later date when they felt it was
86:30
safe to do so
86:32
sounds a lot like what we did with
86:33
patriot bonds and war bonds the goal
86:36
was to get the cash out of the people's
86:38
hands and replace it with something that
86:39
couldn't be readily spent
86:41
uh into the economy um
86:45
your other was one question sandwiched
86:47
in between
86:52
my favorite topic bitcoin is for me it's
86:55
not money
86:56
it's not a currency it is purely a
86:59
speculative
87:00
um instrument it's like a digital
87:03
collectible right it's like a
87:05
featureless
87:07
one of my friends calls it like a
87:08
featureless glass b
87:10
limited edition uh collectible it
87:13
uh it is one regulation away from
87:16
bitcoin equals zero uh in my view i mean
87:20
you can hear powell talk about central
87:23
bank digital currencies you can hear
87:24
yellen make a few comments and bitcoins
87:26
down five thousand dollars it's
87:28
it yeah i mean 

Keen:
 i might i might just add
87:32
some stuff there stephanie
87:33
i think the failure of the bitcoin is is
87:35
not money like money has three aspects
87:37
unit of account means a transaction
87:39
store of value
87:41
bitcoin is brilliant at the last one
87:42
because it's increasing in value but
87:44
that means it's not only used at all for
87:45
transactions
87:46
and the number of transactions it can
87:48
support right now the actual bitcoin
87:49
network
87:50
is roughly three per second uh i think
87:52
there's more than three
87:53
per second contact transactions taking
87:56
place in paris
87:57
um so it's not yet set up for
87:59
transactions there are other forms which
88:01
could work
88:02
uh i think in that sense there's a
88:04
consensual end element to money
88:06
you don't have to have money being based
88:07
on taxation for compulsion
88:09
it can be used in settlement uh but they
88:11
haven't achieved that yet
88:12
none of none of the cryptocurrencies
88:14
i've seen have got there
88:16
no no government is going to allow
88:19
cryptocurrencies to usurp
88:21
their uh yeah currency issuing capacity
88:24
and policy
88:25
space and the power that bitcoin is
88:27
using also at some point it will be shut
88:29
down for power consumption levels
88:30
apparently that's equivalent to
88:32
argentina
88:34
but it's just a sophisticated bubble
88:36
right
88:38
yeah and on that note um
88:42
professor kelton can i uh first of all
88:44
thank you very much indeed for
88:46
first of all being um such a good sport
88:49
and taking
88:49
so many questions uh but also for the
88:52
clarity of your position that you put
88:53
forward uh it's very much appreciated
88:56
i'm sure by everybody on the call
88:59
and i was reminded when alan said about
89:01
consoles
89:02
um the reinhardt and rogoff book which
89:04
of course says that
89:06
i hate to be parochial but we brits
89:08
somehow defaulted after the war
89:10
actually was a console which got
89:11
restructured it's not a default
89:13
uh so um you know just plot the flag
89:16
there
89:17
um in terms of uh where we go from here
89:20
i think it is extraordinary we think
89:21
back only two decades ago
89:24
though we were wondering whether we
89:25
paying back all of the government debt
89:27
and we're actually running a surplus
89:29
which seems that the world has changed
89:31
so much in two decades it's such an
89:33
uncertain world
89:34
where you know what was
89:37
received wisdom not so long ago is being
89:40
turned on its head
89:41
i think that this is a very valuable
89:43
contribution to the debate
89:45
and i thank everybody for their
89:46
contributions and for taking part
89:49
and um i uh thank the oecd
89:52
in particular for uh hosting
89:55
such events and for hearing both sides
89:57
of the debate so thank you very much
89:59
indeed and i wish you a very good day
90:00
thank you thank you thanks stephen
90:07
recording stopped
90:20
you
投稿者 時刻:

12 件のコメント:

  1. yoji2021年2月26日 18:46

    s say currency regimes matter right the nature of the monetary system matters and why does it matter it matters for policy space for what you can do with macro policy both monetary and fiscal depending upon the nature of the monetary system that you're operating under higher degrees of freedom for countries that float their currencies right um issue the currency don't borrow in foreign denominated don't take on foreign denominated debt less policy space for countries that adopt different monetary arrangements right a currency board dollarize uh enter a currency union and so forth all right so on money uh we don't let the state come in at the end we bring the state in at the very beginning this is something that i think probably a lot of you know the name charles goodheart this is what charles goodhart describes as juxtaposing chartless views of money with the medalist view the medalist view was the one i went through earlier here the state comes in at the very beginning defines chooses the unit of account just as keynes told us in the treatise on money imposes taxes and other obligations that are payable only in the state's own unit of account provides the population with a way to settle their obligations spends a currency into existence that the rest of the population can then use to either pay taxes or buy government bonds so the distinction that we make and that i make in the book this image is taken from the book is recognizing the difference between being the issuer of the currency and being merely a user of currency so you know individual states cities in the u.s currency users businesses big and small currency users households currency users which are precisely why congress the federal government has been coming

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  2. yoji2021年2月26日 18:46

    通貨体制が重要だと言います 通貨システムの性質が重要なのです なぜ重要なのかというと 政策空間が重要なのです マクロ政策で何ができるかというと 金融と財政の両方が重要なのです 金融システムの性質に応じて より高い自由度の下で運営されています 通貨を浮かしている国は 通貨を発行しています 外貨建ての借入はしていません 外貨建ての借金をしないでください。異なる通貨協定を採用している国のために、政策的なスペースを狭めないでください。チャールス・グッドハートは、チャートレスの貨幣観とメダリスト観を並置していると説明しています。メダリスト観とは、私が先ほど説明したものです。ここでは、国家が最初に入ってきて、ケインズが『貨幣論』の中で言ったように、勘定単位を定義して選択します。彼らの義務を解決する方法は、通貨を存在させて、それを使って、残りの人々が税金を払ったり、国債を買ったりできるようにすることです。 アメリカの各州、都市、企業、大なり小なり、通貨の利用者、家庭、通貨の利用者、だからこそ、議会や連邦政府が

    www.DeepL.com/Translator（無料版）で翻訳しました。

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  3. yoji2021年2月28日 23:43

    キーンによるマンキュー批判
    OECD NAEC debate on #MMT with Stephanie Kelton, author of The Deficit Myth
    2021/02/25
    https://youtu.be/4yk51HOjq4g?t=49m
    https://1.bp.blogspot.com/-UM4HUR6Djqs/YDk8aRw_2lI/AAAAAAACGuE/TC0uKnHnF1YYk4cpcDCLqNlZFedNhXHQACLcBGAsYHQ/s2048/D33F1217-176D-446B-AA37-FE3106BA9008.png
    《政府支出が税収を上回ると財政は赤字になり, 赤字は民間部門からの借入でまかなわれる。過去の借入が
    累積したものが政府負債である。
    …
    経済を刺激するためのさまざまな裁量的財政政策の変更は赤字を増やすことになる。
    …
    政府の借入は国民貯蓄を減らし,資本蓄積にクラウディング·アウトを生じる.
    …
    この政府負債の増大は将来世代に不当な負担をかけることになると,多くの経済学者は批判した。》
    マンキューマクロ経済学応用篇255~9頁

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  4. yoji2021年2月28日 23:44

    You are viewing Steve Keen's screen
    View Optiom
    MMT versus the mainstream
    • Mankiw Macroeconomics textbook, 2016, pp. 555-57
    • "When a government spends more than it collects in taxes, it has a budget deficit,
    which it finances by borrowing from the private sector or from foreign
    governments. The accumulation of past borrowing is the government debt."
    • "government borrowing reduces national saving and crowds out capital
    accumulation... Many economists have criticized this increase in government
    debt as imposing an unjustifiable burden on future generations"
    The Deficit Myth claims instead
    • Deficits create money directly, and increase private sector savings
    • Borrowing from public is unnecessary
    • Banking sector's capacity to buy Treasury Bonds created by the deficit itself
    argument throughout
    some points i disagreed with

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  5. yoji2021年2月28日 23:49

    赤字神話は代わりに主張する

    - 公共からの借り入れは不要

    - 赤字は直接お金を生み出し、民間の貯蓄を増やす


    - 私が反対したいくつかの点を通して、赤字そのものの議論によって作成された国債を購入するための銀行部門の能力

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  6. yoji2021年2月28日 23:50

    『財政赤字の神話』は代わりに主張する
    - 赤字は直接お金を生み出し、民間の貯蓄を増やす
    - 公共からの借り入れは不要
    - 赤字そのものが生み出した銀行の国債購入能力

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  7. yoji2021年2月28日 23:54

    赤字神話は代わりに主張する
    - 赤字は直接お金を生み出し、民間の貯蓄を増やす
    - 公共からの借り入れは不要
    - 国債を買う銀行の能力は赤字そのものが生み出した

    返信削除
  8. yoji2021年2月28日 23:57


    キーンによるマンキュー批判
    OECD NAEC debate on #MMT with Stephanie Kelton, author of The Deficit Myth
    2021/02/25
    https://youtu.be/4yk51HOjq4g?t=49m
    https://1.bp.blogspot.com/-UM4HUR6Djqs/YDk8aRw_2lI/AAAAAAACGuE/TC0uKnHnF1YYk4cpcDCLqNlZFedNhXHQACLcBGAsYHQ/s2048/D33F1217-176D-446B-AA37-FE3106BA9008.png
    《政府支出が税収を上回ると財政は赤字になり, 赤字は民間部門からの借入でまかなわれる。過去の借入が
    累積したものが政府負債である。
    …
    経済を刺激するためのさまざまな裁量的財政政策の変更は赤字を増やすことになる。
    …
    政府の借入は国民貯蓄を減らし,資本蓄積にクラウディング·アウトを生じる.
    …
    この政府負債の増大は将来世代に不当な負担をかけることになると,多くの経済学者は批判した。》
    マンキューマクロ経済学応用篇255~9頁

    『財政赤字の神話』（ケルトン教授）は代わりに主張する

    - 赤字は直接お金を生み出し、民間の貯蓄を増やす
    - 公共からの借り入れは不要
    - 国債を買う銀行の能力は赤字そのものが生み出した

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  9. yoji2021年3月1日 0:14

    1997年以降の緊縮財政こそが債務対GDP比を悪化させたのであり、物価の安定には失業率の低下が必要だ。

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  10. yoji2021年8月16日 1:35




    ですから、従来の見方は私たち全員によく知られています。それらは、マーガレット・サッチャーや他の人たちが非常に昔に私たちに与えたこの考えを、メディアの報道機関などが知っている政治家によって最も一般的に補強されている物語です。政府には独自の資金源がなく、公的資金もありません。人々が自分で稼ぐお金だけがあり、実際には納税者のお金しかありません。もちろん、経済学を勉強すれば、あなたはあなたを知っています。ある時点で、このお金の概念を再紹介します。通常、市場はお金を発明します。お金は通常、物々交換に関連する非効率性を克服するために自発的に発生します。民間部門がすでに特定したものを制裁するために、交換をより効率的にするための交換を容易にするための交換の媒体として機能するための使用を選択するなど、あなたが財政に到達するまでに州はほとんど役割を果たしません本当にサッチャーの世界では、納税者はサッチャーと一緒に再び通貨の中心にいるという考えです。彼女は、もっとお金を使いたいのであれば、すべてのボックスの画像を動かし続けなければならないと言います。それがあなたの貯金を借りることができるか、それがあなたにもっと課税することができる2つの方法」誰か他の人があなたであると誰かが支払うと彼女が言うのは良い考えではありません公的資金のようなものはありません納税者のお金しかないので、これは政府が家計のように財政的に制約されているという権利を私たちが聞くことに慣れているものですは予算の制約であり、これは私たちがいつも私たちの政治家や専門家や他の人がこの質問をするのを聞くことについて私たちが通常考える方法であるため、しつこい質問はあなたがそれを正しく支払う方法ですあなたはどのように支払うことからお金が来るのですかそれのための。家計のように政府が財政的に制約されているという権利を聞くことに慣れているのは予算の制約であり、これは私たちがいつも政治家や専門家に聞くことについて私たちが通常考える方法であるため、他の人がこの質問をします。それを正しく支払うあなたはそれをどのように支払うのかからお金がどこから来るのか。家計のように政府が財政的に制約されているという権利を聞くことに慣れているのは予算の制約であり、これは私たちがいつも政治家や専門家に聞くことについて私たちが通常考える方法であるため、他の人がこの質問をします。それを正しく支払うあなたはそれをどのように支払うのかからお金がどこから来るのか。

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  11. 匿名2025年3月18日 1:36


    バランスシートに関しては(かつては応用編に所収されていたが)、
    『マンキュー マクロ経済学I 入門編(第4版)』(2017^2016)124-7頁
    財政赤字に関しては、
    『マンキュー マクロ経済学II 応用編(第4版)』(2018^2016)255-9頁

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  12. 匿名2025年3月18日 1:40


    例えば今も流通している経済学の教本に間違った貨幣論が書かれています。

    《政府支出が税収を上回ると財政は赤字になり, 赤字は民間部門からの借入
    でまかなわれる。過去の借入が累積したものが政府負債である。》
    
（邦訳『マンキュー マクロ経済学II 応用編(第4版)』(2018^2016)255頁）

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