Here's a topic I have never, ever, ever really understood-- the national debt. And just to say the words out loud is to feel a profound wave of boredom, and yet also fear and terror, and also a sense that much like our own personal budgets and finances, we actually do need to pay attention to the national debt, especially in an election year. So I hope you'11 join me on my personal effort here to be a little bit less stupid this time around. First, the size of the debt, $35 trillion, which includes all of our national bills for everything the government does beyond what the government pays for with our tax dollars. 
In other words, when the government spends more than it takes in with taxes, that debt number goes up. And it's been going up and up for years and years. Yes, Bill Clinton famously balanced the budget for some years, but he didn't pay off the debt, which rose by trillions under Bush, and under Obama, and under Trump, and now under Biden. And according to a study out this month, it will continue to grow by trillions more under the plans of both Harris and Trump, no matter who wins. And that's even as both campaigns are saying, the debt is a problem, and nearly 80% of Americans say that they personally worry about government spending. 
So here's the curveball. 

There are some economists who say we do not need to worry about the federal debt, that it's not at all like a household budget that needs to be balanced. It's all called Modern Monetary Theory, or MMT. And if I still don't really understand it, I do like the idea of not worrying. And I think we kind of just solved the debt problem just bringing it up. 
Did we? Well, we're going to get into it. We have a chief economist who was on the US Senate Finance Committee Senate Budget Committee. You were the chief economist for the Democratic senators also. Stephanie Kelton, you wrote the book \"The Deficit Myth, Modern Monetary Theory and the Birth of the People's Economy\". And you advised Bernie Sanders during his campaign. 
So we have a certified bona fide person who can really talk about this. And this is really a different way at looking at debt, because we have all been conditioned to think when you spend money that you don't have, it's a bad thing. Why is it not? 

K:
Well, it's a good thing for the people who receive that money. And that's the part of the story that I think we so often miss, right? Because people talk about the deficit and they're telling us what's happening on the government's side of the ledger. And so you said just a moment ago, when the government spends more than it collects in taxes, we call that a deficit. 
So using roughly accurate numbers for where we are today, if the government is spending, let's say, $6.5 trillion and only collecting back $5 trillion in taxes, that means the government is adding about $1.5 trillion to some other part of the economy. Their deficits are our surpluses. If someone puts $10 in and then takes $5 out, what they've really done is make a deposit, right? The deficit is the government's financial contribution to someone else's bank account. 
The question is every deficit is good for someone in purely financial terms. But for whom and for what? Are we solving problems in the economy? Is poverty going down? Is our infrastructure getting safer? Are we dealing with health care and education? Or are we using the deficit to increase the bank accounts of people who are already doing pretty well? 
We can do that with tax cuts, for example. 

So there's what we're spending money on, which we argue about all the time and talk about all the time. But this question of whether we should worry about paying back, quote unquote, \"the debt,\" lots of people from both sides of the aisle are worried about that, right? 

Yeah. 

But you say we shouldn't be. How come? 

K:
So what I'm saying is the deficit is the thing that happens each year. And the debt is the record over time of all of the contributions the government has made in financial terms. So it's like that CVS receipt that we all get. 

lt's so long, yeah. 

lt's the really long one. And so the debt is telling us the cumulative total of how much money the government has put into our hands but not taxed away from us. Those dollars are our savings. It's part of our wealth. So when we worry about the national debt, it's as if we're wringing our hands and saying, my God, we have all of this savings, we've got all of this wealth. What are we going to do to grow out of it? 

But isn't it-- isn't it bad to print money because we're, a, adding more money into the economy, which is going to potentially drive up, have inflation impacts? And b, don't we need to cover ourselves when we spend money? 

K:
No, so it doesn't work like a household budget. And so you did, though, key in on exactly the right kind of risk, which is inflation. If the government is putting too much money into our hands year after year after year, the punishment for doing something like that would be inflation. But think about where we've been. We've been running deficits. 
If we start in 1930 and go up to last year, the federal government's budget has been in deficit 85% of the time. And we haven't had inflation, except for brief periods where there's been an oil shock in the 1970s or a COVID shock. By in large, the government has run continuous deficits without inflation because the deficits haven't been excessive. They haven't gotten too big. 

C:
l don't-- so you come with this reframing, and not only you, but other people. You've got a bestseller on the topic, so that's unusual for this topic. But so, I mean, ProPublica in 2021 wrote a piece about how Donald Trump promised to the debt and instead he created a \"profoundly damaging legacy\" by running up the debt that's going to wreak havoc on our children and grandchildren. That's the typical way that people talk about the debt. 
You don't talk about it in those terms. How did everybody miss this until now? 

K:
Because they're focused on only one side of the ledger. It's as if people are going through this conversation with one eye shut and one eye open and they're seeing half the picture, but they're forgetting to remind us that if the government is adding more dollars than it is subtracting, and it's taxing away from us, then what it's doing is making a contribution. It's a deposit. A government deficit adds to our bank accounts and the debt is the total that has been added over the centuries. 
So they're focusing on these words, debt and deficit, and they're charged, right? We're conditioned to have a visceral reaction. We hear the government is in deficit, we say, why are they doing that? That's irresponsible. Stop that right now. 
Well, if they eliminate the deficit, they're going to eliminate our financial surplus with it because they're two sides of the same coin, and we're forgetting to turn the coin over. 

C:
l feel like this is a little bit like red wine is good for you. No, actually, it's bad for you. No, actually, it's good for you. 

K:
Yeah. 

But I know there's more to it. Your book is a best seller. It's called \"The Deficit Myth\". People should read it to get a full understanding here. We can't cover it all in five minutes. But Stephanie Kelton, thank you very much. 

K:
Thank you for having me.