joining us now is stephanie kelton, chief economist for the democrats. thank you for being with us. >> thank you for having me. >> conventional wisdom are good, de deficits are bad. there are good surpluses and bad surpluses, if i take further, good deficits and bad deficits. >> yeah, that's right. so i think the way to think about it or at least i think about it is when a governor runs a budget deficit t sp, it is spg more dollars into the economy than taking out by taxing. a government defendant sit leaves the economy with some extra money to hold onto. what that means is the government is removing more dollars from the economy than it is spending back into the economy. and so the question really is which one do we think is beneficial at any point in time for the government to be making a deposit of dollars to the economy or sucking dollars out of the economy by running surpluses? >> sorry, go ahead. >> how do we articulate this so we can debate it properly. one of the problems we had in the last couple of years is the president seems to be confused ab

romaine: stephanie kelton, professor for the center of social justice at stony brook university.going, the green new deal isn't the only policy prescription. some are questioning if american capitalism is broken. losing stock are with some people across the spectrum. peter coy.k more is you have compiled a list of things that are supposed to fix capitalism. suppose we say it is broken. what are the main ideas that people are saying would fix the problem? project -- a project involving a lot of people contributing ideas. we are not here to judge which is a good or bad what. joe: what is the answer? >> we picked ideas from the left and right and some that don't fit on the political spectrum. one happens to be what stephanie finished talking about, monetary theory, which is the idea you don't need to worry about government budget deficits unless you reach the point where the government is consuming too many resources through its spending and causing inflation. and the absence of those are not a concern. joe asked the right question at the beginning with stephanie which was world war

stephanie kelton, thank you for watching "velshi and ruhle," i am stephanie ruhle. right now we hand it off to our dear friend, katy tur. >> we have the shutdown and senator bennett talking about 2020 and larger issues and denver public schools and governor jay ansley today. >> and andrea mitchell. the prime minister of israel, benjamin netanyahu, the official twitter account says the whole meeting was to discuss the common interest of war with iran. i don't know about you but it sounds like a pretty big story. >> we have a lot of news. >> enjoy, see you in an hour. >> it is 2:00 p.m. in washington where the president says he does not want another shutdown. he's not quite ready to commit of the bipartisan border deal either. >> well, we have not gotten it yet, we'll be getting it and looking for land mines, we have a lot of things happening right now. we are building a lot of walls with money that we already have. i don't want to see a shutdown. >> just yesterday donald trump told reporters he was unhappy with the legislation which includes $1.375 billion for 55 mil

leading proponent of the movement, stephanie kelton, a professor at stoning brook university and ph.dmics from the news school and named one of politico's 50 thinkers, and visionaries a couple of years back also joining us, dan mitchell, the co-founder of the center for freedom and prosperity, ph.d. in economics from george mason university and a former economist for the senate finance committee. i feel like i'm announcing a boxing match or something. let's begin with you what is mmt, what are the principles here, how does it work >> well, the basic idea would be that, you know, mmt is trying to build a better mouse trap. i think that's the way to think about it so right now, we have the federal reserve trying to fight inflation by creating unemployment that's how the fed fights inflation and what mmt would do is use full employment to fight inflation, so a full employment economy and a better price anchor, a better inflation outcome. >> usually, one of the key drivers of inflation that is associated with full employment is rising wages. >> so what we would do is establish effectively

2020 races, sort of eyeing this or at least getting themselves closer to an economist named stephanie keltonpopularize mmt. if that's where democrats are going, is this thing going to be a bigger talking point as we head into the primary race? >> i don't know. look, it might be, but truly, it's confused. there's one part that's obvious and one part that's confused. the part that's obvious is, yes, if you run up debt in your own currency, you could print money to pay it back. that would, as ali said, lead to significant inflation. that's monetizing the debt. and then their second conclusion is, well, we can prevent the inflation by raising taxes. but if you raise the taxes, you eliminate the deficit. we know that you could afford more government spending in the long run if you had a lot more tax revenue. the question has always been, how much more tax revenue do we want to have? so that's why i think the theory is a little bit muddled, but the basic point -- if their basic point is why should we have to never run -- increase the deficit to make investments when the republicans repeatedly run