Why Scotland’s ‘budget deficit’ matters little even if it still exists after we get actual non-estimated data

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‘The leading thinker and most visible public advocate of modern monetary theory – the freshest and most important idea about economics in decades – delivers a radically different, bold, new understanding for how to build a just and prosperous society.


Any ambitious proposal – ranging from fixing crumbling infrastructure to Medicare for all or preventing the coming climate apocalypse – inevitably sparks questions: how can we afford it? How can we pay for it? Stephanie Kelton points out how misguided those questions really are by using the bold ideas of modern monetary theory (MMT), a fundamentally different approach to using our resources to maximize our potential as a society.


We’ve been thinking about government spending in the wrong ways, Kelton argues, on both sides of the political aisle. Everything that both liberal/progressives and conservatives believe about deficits and the role of money and government spending in the economy is wrong, especially the fear that deficits will endanger long-term prosperity.


Through illuminating insights about government debt, deficits, inflation, taxes, the financial system, and financial constraints on the federal budget, Kelton dramatically changes our understanding of how to best deal with important issues ranging from poverty and inequality to creating jobs and building infrastructure. Rather than asking the self-defeating question of how to pay for the crucial improvements our society needs, Kelton guides us to ask: which deficits actually matter? What is the best way to balance the risk of inflation against the benefits of a society that is more broadly prosperous, safer, cleaner, and secure?


With its important new ways of understanding money, taxes, and the critical role of deficit spending, MMT busts myths that prevent us from taking action because we can’t get beyond the question of how to pay for it.’

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Video at: https://www.taxresearch.org.uk/Blog/2020/01/18/the-deficit-myth-stephanie-kelton/

9 thoughts on “Why Scotland’s ‘budget deficit’ matters little even if it still exists after we get actual non-estimated data”

  1. Spot on Professors Kelton and Robertson!

    We’ve been sold the Tory story that the government is like a household for long enough.

    Thatcher pushed it hard – “There is no such thing as public money; there is only taxpayers’ money.”

    As with many things, she was wrong – and probably even knew it was wrong.
    But she said it anyway because Tories don’t believe in the state as a vehicle for service.

    The opposite is true for a government with its own currency.

    Even John Redwood, the arch Tory, knows she was wrong and was heard to say so more recently!

    Liked by 2 people

  2. This is a belter of a lecture . For those wishing to hone their MMT language skills , this is a must . As a seamless account of the MMT position on debt , this will take some beating . Forget the first ten minutes of name listing by the chair , Professor Kenyton lecture covers the ground at a cracking pace . It’s well worth listening to Professor Harcourt’ s witty and perceptive delivery of thanks at the end , she was a student of his .

    Liked by 3 people

    1. I think you should John, but then, I’m biased!

      Did you watch the video? Did it help your understanding?

      I think once you understand the actual way money works in society/government you can spot more injustices, unfairness and ignorant reporting (but would not suggest that media reporting in this case is very unlikely to be wrong on purpose, they are following an official narrative, but of course use it if it looks biased towards their own political ideology)

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      1. Sorry, too many double negatives : ‘I would [] suggest,,, unlikely to be wrong on purpose’ I meant. I need simpler sentences. (And I DO try)

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    1. You may find Deficit Owls referred to elsewhere, so a brief explanation –

      Deficit Hawks: say deficits are the devil’s work, and your grandchildren will have to suffer while the debt is repaid.
      (Note: Most Trump supporters are in this category, although Trump himself understands that the US can never run out of money. The only problem is his desire to increase the deficit to allow large tax cuts for the rich, and a big expansion of the military.)

      Deficit Doves: say deficits are allowed in a recession. Doves still don’t understand the logic and arithmetic of government spending, so they still require the debt to be paid back later.

      Deficit Owls: understand monetary operations. Owls are wise, and say that a monetary sovereign government (US, UK, Australia, etc) can pay for any resources, including Labour, that are available for purchase or supply in their own currency. Government levels of spending, borrowing and taxation should be determined by policy, not some arbitrary deficit level or fiscal rule.

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