The government will release fresh Consumer Price Index data this week, and it is expected to show inflation running at its fastest pace since 1982.Īnd that may be why Ms. The bad news: Some economists blame big spending in the pandemic for today’s rapid price increases. The good news: The government has had no trouble selling bonds to fund its spending, contrary to the direst projections of deficit scolds. The government’s debt pile has exploded to $30 trillion, up from about $10 trillion at the start of the 2008 downturn and $5 trillion in the mid-1990s. Kelton’s house near Stony Brook University, where she teaches, inflation had rocketed up to 7 percent. Won the Fiscal Policy Debate,” in early 2021, inflation had bounced back to around 2 percent.īut by a chilly January afternoon, as ducks flew over the frosty estuary outside Ms. Kelton appeared on a Bloomberg podcast episode, “How M.M.T. The government had begun to spend rapidly to try to prop up flailing households. Kelton’s book, “The Deficit Myth,” was published in June 2020 and shot onto best seller lists, inflation had been weak for decades and had dropped below 1 percent as consumers retrenched in the pandemic. It is an idea that was forged, and put to something of a test, during a low-inflation era. Real-world resources and political priorities determine how much lawmakers can and should spend. view of the world, “How will you pay for it?” is a vapid policy question.
Kelton, 52, is the most familiar public face of Modern Monetary Theory, which posits that if a government controls its own currency and needs money - to make sure its citizens have food and places to live when, say, a global pandemic pushes many out of work - it can just print it, as long as its economy has the ability to churn out the needed goods and services. What Stephanie Kelton sounds like, circa early 2022, is the star architect of a movement that is on something of a victory lap. At one point, she muttered, “That sounds like Stephanie.” Kelton, who bantered energetically with the producers she was hearing through noise-blocking headphones, sang a Terri Gibbs song and made occasional edits to the script.
The setup was meant to keep out noise as she recorded the podcast she co-hosts, a MarketWatch production called the “Best New Ideas in Money.” The room was hushed except for Ms. The sun was sinking low over Long Island Sound as Stephanie Kelton, wearing the bright red suit jacket she had donned to give a virtual guest lecture to university students in London that morning, perched before a pillow fort she had constructed atop the heavy wooden desk in her home office.
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