Stephanie, it's a fascinating documentary.
I will say, you are, you are setting out,
correct me if I'm wrong, to fundamentally
change how people see money.
Yeah.
That's a big ask.
And we got about seven minutes.
Yeah.
I think a place to start is with MMT, right.
MMT, if you can help us define what
MMT is, and I think what the narrative, what the narrative
you're hoping to get across with MMT.
What is the new economic narrative?
It's no longer pull yourself up by your bootstraps.
What is MMT telling us?
So, in economics is widely known as the dismal science,
right? Because--
You've got to get better at branding.
Well, that's what MMT is trying to do, better branding.
Because you know, in the dismal science,
it's all about scarcity.
And we can never have the things that we want,
because there's always this really
intrusive problem, which is, how
are you going to pay for it.
Where is the money going to come from?
And the problem is, that we treat
money like just any other scarce good or service
in the economy.
And what MMT is doing, is saying, hold on a second.
We're not on a gold standard anymore.
We have this thing called a fiat currency.
And it does make people nervous,
because a fiat currency sort of opens up space,
and it's kind of like, wait, is money real after all?
And so MMT is an economic framework
that tries to have an honest conversation, that talks
to people like grown-ups, not insulting people
by telling them that you have to treat the government's
budget like a household budget and speaking down to people.
We want to be honest about the monetary system we have today,
the capacities of the government to spend when you
have a fiat currency and you're not tying your currency to gold
and promising to convert into something that you could run
out of, like physical gold.
So we're opening up a conversation where
there are still limits and you still have to make choices,
but we can have an adult conversation about how
the government can actually operate its budget when it
doesn't face the same kinds of constraints
that a household or a business faces.
I mean, I guess by that, I think
the big headline with this, as well,
is the way we look at what the deficit means, correct?
Yeah.
Like, I hear deficit, you hear it in the news,
you hear every politician talking about it.
Deficit equals bad.
Yep.
And the major narrative of MMT, monetary--
modern monetary theory, is deficit, good, correct?
Every deficit is good for someone
in purely financial terms, and I'll tell you why.
Because you're right.
We use this word, and it sounds inherently
like something's gone wrong.
If somebody is in deficit, there's a problem, right?
You don't want to turn on the sporting game and find
the announcer saying that your team is going to have to come
back and overcome a 7-run deficit if they're going
to win the game.
It's always a bad thing, right?
But actually, if you think about what
the government deficit is, it's just the difference
between two numbers.
That's all it is.
So--
What a relief.
Well, I guess we're fine then.
Everything's fine?
Does it mean everything's fine?
It's fine in the sense that it's just
a benign mathematical, like it's the difference
between two numbers.
It's not even higher order math, right?
It's just, how many dollars the government
spends into the economy each year
versus how many they take back out, mostly through taxation.
So simple math.
If they spend $100 into the economy
and they only take $90 back out,
we label it a government deficit,
and somebody records it as a minus 10
on the government's ledger.
What we forget to do, is to recognize if they put $100 in
and only take $90 out, somebody gets $10.
So the government's deficit is matched
or mirrored by a financial surplus
in some other part of the economy.
This is--
Wait, hang on.
So, did you guys meet backstage or something?
Because what the hell! What is MMT?
What is, what, what's MMT?
What is, what does MMT stand for?
You handle it.
So, it's modern monetary theory.
And so, again, the currency, we're not on a gold standard.
We're in the modern fiat age.
OK, what fiat? What's fiat?
Well--
Is it a good car that I should get or what?
What you're walking around with
if you've got some of this stuff in your wallet,
is a tax credit.
So those dollar bills that were walking around with,
we think of that as money, right?
And we can use it to transact.
We can use it buy and sell things.
We can use it to make purchases of goods and services.
OK.
And money is good.
It's good to have--
OK, OK.
--generally, and it's really good to have when you got
to pay your taxes, because this is what the government expects
us to hand over at the end of the day
in the payment of taxes.
OK, money is good, I'm with you so far.
OK.
Well, but, but let's do this.
OK.
What about that government deficit that you
just mentioned, right?
And I said every government deficit is good for someone.
Why?
Because it's just a financial deposit into some other part
of the economy.
The question is, good for whom, and good for what?
The government can increase its deficit
to do things like feed hungry kids,
tackle the climate crisis, fix crumbling infrastructure.
All of those things are ways to use a government deficit
that might have desirable results for people
and for the economy.
So money is good.
Deficit is good.
I'm with you so far.
So, what's the prob-- what's the bad?
What's the problem here?
If everything's--
A big part of the problem is, the way
that we've been taught to think about these things,
to try to stamp out deficits, to reduce them,
to view them as inherently dangerous.
They're not inherently dangerous.
And as I just said, they can be used
to help us accomplish important goals in the economy.
OK.
So, for example, if I go to Caesar's Palace
and I borrow like $200 on my credit card and I put it on red
and I lose everything, that's good.
That's bad.
Wait, why is that bad then?
But doesn't the casino, what?
It's good for the casino.
And also, don't go to Caesar's Palace,
that's a little gauche.
First, it's bad.
Maybe go to MGM or just something.
But, but financially, that's bad for him.
But that's bad for you.
But the point is, to try to figure out,
and to wrap our heads around what it is we're actually
capable of doing, because we're always
told that we can't tackle big problems that we face.
We can't deal with housing problems or education
or climate, infrastructure, or social security
and Medicare always come up.
And everybody always says the same thing.
We can't afford it.
We have this deficit or we have this national debt.
Where are you going to find the money to do these things?
And so MMT comes in and says, look,
it's not about finding the money.
The money is created when the government spends.
Congress authorizes the spending,
and if the votes are there, the money is there.
The thing you have to watch out for, is inflation.
So it isn't as if it's a free lunch,
there are no constraints, there are no limits.
There are limits.
And the limit is inflation.
You can't run out of money, but you
can run out of things to buy.
I mean, so this is, correct me if I'm wrong,
but if I'm, if I'm going nutshell here,
your essential argument is, we're not
bartering back and forth like this is an avatar
for gold in our pocket.
The government makes money. - Exactly.
They can decide how much money goes out there, right?
You pay taxes.
They don't need our taxes to fix big problems.
They can make big money.
It's on them to figure out how to spend
it and put it into the economy in a way
that can get big things done.
And then the private businesses,
they're the ones who have the money.
The government just has created that situation.
And inflation becomes the boundary that they have
to act underneath, correct?
- Well done. - Well done?
Wait, what?
Well done.
Did you read?
She's, she's a published author and created a movie,
and still assholes won't [BLEEP] do the research.
But here, here's the pushback.
Here's the pushback, damnit.
We're not memorizing a Wikipedia page.
But here is the argument.
Here's, here's what's so compelling.
And Ronny is a great, he's a useful idiot in this.
And people are scared.
I don't know a lot about money.
And I think the narratives around money
teach me to be afraid of it.
It's something that we shouldn't
talk about, because I don't understand
the underpinnings of it.
And I think what it's compelling about your argument
is, we can and have, like World War II,
have figured out ways in which to create
money and fix big problems.
It's-- it's-- we almost need a giant.
We need a big thing to focus on to get those problems
done, correct?
To get the narrative around it. Like I think--
Well, it helps.
And COVID was that big thing for a period of time,
where governments around the world
suddenly stopped asking the question,
how are we going to pay for it and what
are we going to do about this deficit,
and they just pulled out, I'll use the phrase,
the money bazooka, right.
Countries realized that they were going
to have to spend a lot of money to shore
up people's lives and livelihoods
through the pandemic.
And so we spent some $5 trillion
just in the first 12 months or so of the pandemic.
And I wish that climate was going to be that catalyzing
event that kind of forces everybody
to have that wake-up moment and realize that we've been
focusing on the wrong sorts of problems,
that we really can tackle the problem of climate change.
We can afford it.
We got to watch out for inflation.
OK, sure.
So you're saying that MMT--
MMT can be used to solve issues that we claim that we have
no money for, by basically the government making money,
because that's where money comes from.
- Yep. - Right?
And you're saying, but doesn't that
increase inflation inherently if you just keep making money?
Well, no.
I mean, the government has run deficits most of my life.
With the exception of four years during the Clinton
administration, the government's budget
has been in deficit.
Look at a country like Japan.
They've had large deficits every single year
for the last 30 years or so, and no inflation
to show for it.
And we hardly had any inflation.
Inflation didn't really become a problem
until COVID came along and started breaking supply chains,
and then wars in Ukraine and-- and food and energy prices
and so forth.
But you can have large and persistent deficits without
having an inflation problem.
It's when those deficits collide against the backdrop
of-- of constraints in the real economy,
where the economy can't resource,
can't keep up and satisfy that demand.
And that's what happened in the COVID pandemic,
and in World War II, you know.
So-- so if it happened in World War II and it happened
during the COVID pandemic where inflation got out of control,
when you had basically unlimited spending on one
single issue, wall to wall COVID, then how can you, well,
what's the evidence that MMT will work then,
if we had two real examples?
I'm just joking.
I have no idea what I just said, to be honest.
Yeah, no, no, because--
Someone-- someone just briefed me on that,
and I just repeated it.
So, the evidence that it works,
is that MMT is a description of how government finance always
operates, whether you have a budget deficit, a budget
surplus, or a balanced budget, MMT is at work,
providing the explanation.
So it isn't about ramping up deficits and running
large chronic deficits.
You can have a good, healthy economy in some cases
with a relatively small deficit, or maybe
even with a balanced budget.
It depends on a lot of other things.
So the evidence that it works, is that it's a description.
And we think a more honest and accurate description
of the monetary system we have and how governments
actually pay their bills.
Now, as a, I guess in theory, how this takes greater effect
and affects our lives and gets big things done,
Green New Deal, that was a big part of the way
in which it would be funded.
We need to start looking at money like through an MMT
lens, correct?
That also presupposes that you do have this paradigm shift
that we start to see as a country, as a collective,
we start to see the usage of money differently.
But getting people to have a cohesive change of mind
in the way they see the world seems like a [BLEEP]
impossibility, from the experiences
I've had out on the road and at Thanksgiving.
Well, look--
Like, how much of like, do we live in a culture
where we can experience a paradigm shift?
Or is that in and of itself an impossibility?
I hope so.
I mean, TikTok is there.
I'm kidding, I'm kidding.
We're going to get better.
No, but it's stuff like this, right?
It's conversations like these that allow people to hear
a different perspective.
And also I think, look what the--
what the last couple of years what we've
done, in some cases on a bipartisan basis,
and in some cases just with Democrats.
But you had the Inflation Reduction Act,
which is the largest climate bill we've ever had
in the history of our country.
We have the CHIPS and Science Act,
which big investments in actual productive capacity
here in the US.
And the bipartisan Infrastructure bill,
which is repairing roads and bridges
and taking care of our-- our infrastructure.
So those are three big packages, which I would argue
are just an extension in many ways
of what the administration started
doing with the COVID spending.
And it's just another example of the government being
able to mobilize the financial wherewithal to commit
to spending money that it doesn't have,
because the money comes from the willingness of Congress
to say, yes.
When Congress says yes and writes those bills,
the legislation is the set of instructions
that goes to the government's bank, the Federal Reserve.
And it says, we've committed to making these payments.
Your job, as our fiscal agent, is
to carry out all of the payments we've authorized
on behalf of the US Treasury.
And that is just how government finance works.
It's no more complicated than that.
But we complicate it with stories
about taxes and borrowing and debt and all the rest of it.
But at the end of the day, the spending
is really easy to carry out.
Well, you see, you're a very smart person
and you say things very calmly.
Thank you.
And everything seems like it's fine.
So, how do we get to--
What would you, what can people walk away with like if they
want to like not be sad when they look at the,
when they look at the deficit?
This is always his question.
Well--
How do I not be sad?
What's the, what's the, what's like the practical application?
Because you're, I guess we just, the three of us
sat down here and we decided that the deficit is fine
and we can, well, OK then.
So, we're OK? So, well,
Look--
Like, what's the next step?
Why would we, let's say we believe
in MMT or yeah, MMT, what--
what-- what's the next thing that?
I mean, is belief enough?
Do I just have to pray to MMT and then--
What-- what has to happen next?
Who else?
What has to happen next, is that the people that we elect
to represent us have to go in there
and take decisions using the incredible power
that they have, called the power of the purse,
that they've got to take decisions
about whether to fund programs, whether to cut programs--
--not on the belief that they ought to be operating
their budget like a household, but when these decisions come
up about Social Security and Medicare,
or continuing with the Inflation Reduction Act
and staying in the game on climate
change and going even beyond what that legislation did--
--what I think gives me hope anyway,
is that we've demonstrated what we're capable of,
and that we can build on it, and not revert back
to old ways of thinking about austerity and the need
to reduce deficits.
Because that-- that's when you hammer your economy.
That's when people have a lost decade.
That's when all of a sudden, you know,
the prosperity that is within reach,
starts to slip through our fingers.
So when the IRS comes for my taxes,
I just got to tell them like, yo, deficit is good.
Don't worry about it.
You need to-- you know what you need to do?
You need to take some-- some THC or some DMT
and let the MMT just wash over you.
Let the paradigm shift come to you, Ronny Chieng.
Yeah, I think I'm in it right now.
I think you're in it.
Well, Finding the Money will be released
in select theaters nationwide and on demand May 3.
For more information, go to findingmoneyfilm.com.
Stephanie Kelton.