Book: 20260524 to 20260611, The Deficit Myth by Stephanie Kelton

 

20260525 - Introduction to the Paperback Edition xi

The solution is obvious: the economy desperately needs more fiscal support. p. xv
Not just that. When factories all locked down, there were not enough goods produced. Thee goods in warehouses were close to exhausted.

MMT doesn't tell us what we should do. It shows us what we can do. p xx
Good point.

20260525 - Introduction: Bumper Sticker Shock 1

But evidence of overspending is inflation, and most of the time deficits are too small, not too big. p9
Inflation could be delayed by other countries' "oversea currency reserve".
Without the protection of tariff, MMT doesn't work.

20260527 - 1 Don't Think of a Household 15

That can help manage inflationary pressures, by balancing the strain on our economy's real productive capacity. p33
Why does government tax normal people? To reduce the pressure of inflation.
Why does government tax rich people more? To redistribute wealth from the rich to the poor.

20260529 - 2 Think of Inflation 41

Evidence of a deficit that is too small is unemployment. A fiscal deficit isn't evidence of overspending. For evidence of overspending, we must think of inflation. p43
What if it is stagflation? Or when AI and robots take over most of jobs?

Rather, we only infer it from the response of wage compensation and price inflation as the labor market tightens. p51
It's not just about timing. There are many other important factors, such as international trade balance. If unemployment rate is high, who's the victim? White collar or blue collar?
If AI takes over most of jobs, based on MMT, central banks will release huge amount of capital to market.

Congress had become preoccupied with the state of its own balance sheet. p58
Deficit, unemployment, inflation. Which one has the priority?

By establishing a wage floor, the government sets the minimum compensation, say $15 per hour. This becomes the rate of remuneration against which all other employment can be priced. Right now, the minimum wage is zero. p68
This is kind of like UBI with full time employment. What value can these create for the public?

20260604 - 3 The National Debt (That Isn't) 75

"the only question for China is which dollar assets [green dollars or yellow dollars] it will buy, not whether it will go one a US dollar strike." p84
Now, it seems that China chose to hold more gold than US dollars. But they cannot use gold to purchase US stock, and that's the only thing which can generate value continuously.
Can US use gold to purchase natural resources from other countries? They have to accept big discount of the gold price. The problem is, $400B worth of gold is dig out every year.

Bond sales is done to support interest rates, not to fund the government. p87

20260605 - 4 Their Red Ink Is Our Black Ink 101

In other words, it's a mistake to apply the crowding-out story to monetary sovereigns like the US, Japan, the UK, or Australia. p126
AI will bring different impact to the countries with or without monetary sovereigns.

20260605 - 5 "Winning" at Trade 127

EXHIBIT 10. US Fiscal Deficit Smaller Than US Trade Deficit, p133
This chart missed one point: if US can export more Goods than it imported, the US private sector will keep more money in its pocket.
But other countries sacrifice their people's life quality to improve their productivity, which make US hard to compete with them. That problem seems can only be solved through tariff.

"Job guarantee" won't help without the protection from tariff. This is not something that fiscal policy and monetary policy can solve.

For developing countries, the main issue is political corruption. That beats all other factors combined.

20260609 - 6 You're Entitled! 157

For every year the retirement age is increased, benefits are cut by 6 to 7 percent. p167
https://x.com/chaojidigua/status/2064157703975702776

20260610 - 7 The Deficits That Matter 191

The next chapter will explain how MMT's proposal to create a federal job guarantee can set a minimum standard for all employers to meet, with a livable wage and benefits package for anyone who wants it. p199
This need the protection of tariff. Or else, most of the manufacturing jobs will be outsourced to other countries, and most of the service jobs will be automated as early as possible.

Democracy means that we all have a voice, that we all have a say, and that we all matter. p227
Yes and No. We need to admit that people are not equal. Because they have different level of talent, different education, put different effort into study, thinking and work.
The ones that think hard and work hard, deserve more power.

20260611 - 8 Building an Economy for the People 229

MMT resolves the problem by directly funding employment for those without work. p245
This is "basic income" for unemployed people.
Some people need $20k to survive, some may only need $10k. What is the proper salary then?
Unemployed people will go to the cheapest place to live, if this salary is a fixed number, and they will go to the place which provide highest "basic income".

"No one left behind" is just illusion. In a healthy system, we need to follow the principle of "survival of the fittest".

Federal job guarantee is part of "planned economy". It only suits the situation when almost all goods are in serious shortage.

But currently almost all Goods are oversupply.

AI wave needs trillions of dollars of AI computer centre. Will that solve the problem of oversupply of Goods?