The Defecit Myth – MMT and how to build a Better Economy


‘The Deficit Myth – How to build a better economy’ by Stephanie Kelton was published in hardback in June 2020. It is due to come out as a paperback in March and is available at Hive.

Hive has the advantage that if you order from them, they give a percentage to your choice of local bookshop. It is sometimes marginally more expensive than Amazon – but worth it not to have to deal with their exploitative practices in my view!

This well written and readable book is easy to understand with things logically organised into eight well written chapters. Although largely American orientated there are British references too. But of course the money system and its economic results are practically identical in all non Eurozone advanced economies.

And although Chris Dillow, legitimately – if a bit pedantically – criticises the book for not having much of a historical perspective, I can see why this detail is not there (though some of it is in the extensive notes) as I think that would necessitate a ninth chapter and would detract from the personal and sometimes even folksy story telling approach which draws directly on the author’s own experiences – particularly advising the Democratic Party in the Senate, which is illuminating.

Indeed, the story telling is, I suggest, the book’s winning formula and the economics creeps up on you because you are not confronted by any of the usual economic inscrutability of unfamiliar formulas or complicated mathematics.

Even for those who already know about Chartalism, Functional Finance or Accounting Identities the sometimes anecdotal narrative makes for an easy and enlightening read. For those that don’t yet know about them these ideas will become simple and self-evident.

If you want to know why sovereign nations can never run out of money but many of their legislatures think they can or have, then this book is for you.

Comments

  1. Michael G -

    I have been meaning to write for months to say this should be your new Recommended Reading. It helps explain why these two sentences are not identical:
    “The amount of money that a Government can spend is not limited”
    “The amount of money that a Government can spend is not limited by the amount it can raise in taxes”

    1. Peter May -

      Thank you – Quite! 🙂

  2. John Doyle -

    I love the reference to inscrutability here.
    Its built into economics like a poison pill.

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