is and what it's advocating is stephanie calton her self so first of all thank you so much for being on the show professor cults and we're very excited to get into a discussion about m.m.t. because we really haven't had a proper discussion about it so thank you thank you yes so let's just start with a very simply what is m.m.t. and while i'm sure different people may vary on certain specifics maybe you could focus on what most proponents of m.m.t. agree on. sure well lauren m.m.t. for her for us that they have to teach economics this is we believe the best way to try to explain how a contemporary modern monetary system actually works and more importantly maybe the policy options that are available and that follow from an understanding of the way the modern monetary system actually works so in other words we often emphasize the m.m.t. is about what it's like to live in a world where the government is the issuer of the currency and not merely a user of the currency like you and i are so in an empty framework what does it mean that the government is the issue or what do you think the go

spending than believed and do budget deficits matter much less right now than we may think well stephanie calton chair of the economics department at university of missouri kansas city and a subscriber of modern monetary theory is here to talk about just that plus the senate is reportedly looking at extending a two thousand and f.d.i.c financial crisis measure that guarantees one hundred percent of all checking account bank deposits now the c b o estimates the f.d.a. is the does not collect enough fees to offset the risk exists as another subsidy for too big to fail banks we have a reality check plus a talian technocrat leader mario monti versus bunga bunga three time former prime minister silvio berlusconi their latest debate centers around a different approach to bond yields will cover the spread in loose change let's get to today's capital account. government budget deficits do they matter of course but looking at the fiscal cliff debate it actually seems most seem to agree with that statement i just made though folks may disagree on the best way or time to address them here's the but is this

today modern monetary theory with stephanie calton economist for the university of missouri kansas city she calls herself a deficit owl from what i understand has coined the term so we're going to continue that conversation now so before the break professor kelton one thing you got into that i wanted to ask about you were talking about government policymakers setting their priorities setting national priorities and investing accordingly in a perfect world i understand but sitting here in washington and watching the way that policy is actually made especially recently it's hard for me to have faith that that will happen soon or that that can ever happen so in that situation don't you have government investment in stimulus benefiting only certain industries and perhaps not others and in this situation what allows for creative destruction of the sort that allows for innovation and allows for a dynamic changing economy in a situation where the government is stimulating until full employment. ok well i mean first the question about stimulus benefiting only certain industries or only certain

economist stephanie calton yesterday spurred so many responses six hundred so far it's been less than twenty four hours it is to get in so much just gushing we'll talk about it in loose change let's get to today's capital account. ok so today the fed announced it's expanding its bond buying which by now has become a bit of a youn to be quite honest it was expected which is alarming that q.e. infinity has become just that and has become the norm perhaps a little more earth shattering in fed world is that the fed's change from the fed change from tying interest rate guidance to a date to saying this the fed currently anticipates that the exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above six percent and inflation between one and two years ahead is projected to be no more than a half percentage point above the committee's two percent longer run goal a fancy way for saying two to africa cent and longer term inflation expectations continue to be well anchored so they're tying the guidance now to economic data so th

and economist stephanie calton yesterday heard so many responses won't discuss change first or closing market numbers. more news today violence is once again flared up. and these are the images the world has been seeing from the streets of canada. sheinkopf aeration to rule the day. and. we speak your language any time of the war not a day of school news programs and documentaries and spanish more matters to you breaking news a little tonnage of angola's kidney's stories. for you here. in troy altie spanish to find out more visit i don't all tito it's calm. i've. seen the motion would be soon which brightened if you knew more about zone from funniest impressions. plane starts on t.v. dot com. please . please please. live here. illegally. all right let's just bring jim records right back in a tangent capital partners author of currency wars on this fed decision day we're talking about the currency wars and i want to actually continue on the fed's decision that they announced just earlier because i want to ask about what they said about inflation so they're saying that they're giving the

know we don't obviously always respond to actual interviews that we did but yesterday we had stephanie calton on she's an economist she's a modern monetary theory advocate we had a very long and thoughtful and fair discussion about n.t. we also had an overwhelming response from people who both agreed and disagreed more than five hundred comments in less than twenty four hours on that video on our you tube channel tons of tweets both critics of m.m.t. and supporters we have people posting it on their blogs you can kind of see a collage here a blog post of tweets people saying they loved it they hated it this doesn't make sense and this makes so much sense to me terry let's talk about kind of just a few of the key themes of the. interview so stephanie colton's main point was that the government is not revenue constrained the government is the monopoly issuer of the currency. which they get well that should i think stephanie said it as though a lot of people think that the government is already constrained maybe some people do but a lot of people understand that the government has the ability to

economist stephanie calton yesterday spurned so many responses six hundred so far it's been less than twenty four hours it is to get in so much just gushing we'll talk about it in loose change let's get to today's capital account. ok so today the fed announced it's expanding its bond buying which by now has become a bit of a young son to be quite honest it was expected which is alarming that q.e. infinity has become just that and has become the norm perhaps.

on asia i want to ask you one question about china because earlier this week we interviewed stephanie calton who is an economist of the m.m.t. discipline or modern monetary theory and their kind of descriptive scenario for the monetary system is that the government isn't revenue constrained because it is the monopoly issuer of the currency and some of them advocate stimulus or spending until you get full employment and i asked her you know would china be the most. relevant economy today in which they are doing something similar to what you're calling for here's what she said. they're spending a lot but it certainly doesn't look like any model that i think i am going to advocate in terms of figuring out what you need national priorities if all you're doing is building a bunch of buildings that sit empty and so forth this is not this is not compatible with anything that we advocate. my question though is is this what inevitably happens to buildings that are empty factories that are working at capacity when you do have the government spending and spending in trying to achieve this goal of full

economist stephanie calton yesterday spurred so many responses six hundred so far it's been less thantwenty four hours it is to get in so much just gushing we'll talk about it in loose change let's get to today's capital account.