Tonight we encourage you to ask questions. The back portion of our event will be dedicated to your questions. At the bottom, you have seen where people have already asked question and you can vote on the questions that youre most interested in hearing our authors answer. And, lastly, reminder to everyone that you can see us, but we cannot see you. Feel free to relax and get comfortable. Tonight shes here with her new book. Tonight we are also joined by Zachary Carter where he covers congress, white house, tonight he will discuss price is king. So without further due i introduce stephanie and zachary. There was a tweet from lincoln public, antitrump republicans, how donald trump had run up 18. 17 billion of debt, theres columns in wall street journal, New York Times about debt, debt, but your book calls of deficit as a myth. What do you mean of by the deficit myth and why do you think its important to write at this time. Pleasure to be with you. First, let me start by saying increasing the deficit and adding to National Debt is probably the least bad thing that donald trump has done. We should just get that out there. Look, i understand that we are inundated from the media, mainstream press, politicians, everybody who talks about deficits and debt. Virtually, everybody talks about it in a negative way. It is almost the case they are there to complain about the things or the National Debt. These are presented to us as problems at a minimum and as a National Security threat or threat to future generations. I mean, a real danger to us individually, your share of the National Debt, borrowing from china, all of these things that create a lot of anxiety on the part of the american people, so when you say, why did you write this book, i think that my hope is that i can refuse the level of anxiety. I mean, i start in chapter 1 of the book telling a story about being a child and watching the Television Show sesame street and sesame street was god at teaching us to separate things go categories. These things are similar and unlike the rest of them. As a kid my sister and i were watching and we would play along and they would put a bicycle, automobile, train, tennis shoes, one of the things is not like the other, we would say back the shoe, the shoe. Im an adult now but im still hollering at the television all of the time and i hear often socalled experts on economics talking about the deficit or the debt in ways that i think are just fundamentally wrong and they are getting some big things wrong and im hollowerring at the tv. So a really common criticism that you hear from people who talk about common theory from Stephanie Kelton that deficits dont matter, there was nasty review in the wall street journal, do you believe that deficits dont matter, what do you make of this critique. Dick cheneys deficits matter, my argument throughout my work is that deficits matter but not in the way that we have been taught to believe that they matter. We have been taught earlier that they are inherently dangerous, undesirable, things you do in times of crisis because you have no choice like but that in more normal times deficits are things that we should be avoiding. They should strike balanced budgets and avoid increasing the debt, so i walk flu the book a variety of ways in which deficits matter and one matter way is every deficit is good for someone. That is the reality and so when you see the republicans passing the huge tax cuts at the end of 2017, these were massive tax cuts knowing they would massively increase deficits. If they knew they were dangerous and all the bad things were going to happen and future grandchildren, they wouldnt do that. The reality is that the republicans understand perfectly well that every deficit is good for someone, what they did was to massively cut taxes on corporations and the wealthiest people in this country, 83 of the benefits went to people in the top 1 of the income distribution, in other words, those who least needed the help, but the deficits that the government ran and are running become financial surpluses is somebody elses pocket. Their deficits become our surpluses. The question is who is benefiting from that financial windfall, republicans run financial surplus and they can direct into the hands who they are most interested in helping and i would hope that democrats would reach the point where they too understand that deficits arent something we should be striving to wrestle down and reduce but that the deficits can be used as a tool to carry out an agenda that serves the broader public, that benefits people who are truly hurting and so thats a lot of what i talk about in the book. It feels to me when i read your book, blog posts, opeds, interviews that youve done, theres a real emphasis on how you move supply chains from point a to point b, what kind of society you want to live in in terms of particular economic inequality and the focus seems to be on a sort of social vision more so than a i dont want to say youre not an economist here, but the way the traditional economists focus on debt and deficits is the way of understanding the economy. It seems to have in my mind broader social vision there. First of all, is that accurate description of the way you think about your own work and second, what do you think it does about the economic profession that we focus on debt and deficit instead of social priorities . Yeah, you know, in the book chapter 7 is called the deficits that matter and so thats exactly what im trying to do, to redirect our obsession with deficits to the very real deficits that surround us in our everyday lives and that are crushing in many ways for millions of people in this country. Youre right that for me i look at the federal budget as a world document and the federal government, theyre our elected official and they get to write and pass the budgets that determine where Financial Resources will be dedicated and to what end and in my view anyway, our elected officials are there to act in the interest of the broad majority the people of this country, right, and if the people of the country indicate that they want, you know, everybody to have health care, for example, then i think that congress should be looking for ways to budget our nations real resources so that we can deliver those that material wellbeing to people. So mmnt is about saying, listen, the easiest part of any agenda is finding the money. Thats the easiest part. The challenge is how many of our nations real productive resources, how many workers, how many people, how many how much of our factories, how many machines, how much real resources do we want to producing public goods, education, infrastructure, those sorts of things and how much do we want to leave the private sector so there is a balance there and when i talk about addressing the deficits that matter whether its climate or Retirement Security or, you know, education, student loan debt, all of that is in the chapter that i talk about, i am, im focusing in ways that there may be not common among economists to think about directing real resources to solve in our economy. Ii have to say that the focus reminds me of a fellow who i spent a great deal time studying, i dont know if youve heard him, his name is john leonard king, are you familiar with his work . Am i familiar with his work, i dont know. [laughter] it rings a bell. [laughter] that guy . That guy. A famous political cartoon on that mug of kings looking like a spider in a chair quite frankly. You know, what i think i love about studying king, hes one of the broad thinkers, hes kind of an economist by accident, i think. I feel like he, you know, his life is one where hes surrounded by philosopher and artists and great writers like virginia wolf, you know, all the merchant ivory, melodramas from the 80s and 90s. Dont tell anybody but let know know what you think maynard. He kind of just realized that economics was science that he could pursue to would give his ideas access to power and i feel like when i read his work, very technical economic work its extremely dense and kind of like eating a pretzel covered in thorn but nasty at times but a lot of his work, essays, letters, its very clear he has the ability to distill big complex ideas into fragments that ordinary people could understand because hes fundamentally concerned with ordinary people and what they can understand because he believes the economy is not this sort of weird thing that has to be away from social policy. He believes its a way to address the social policy that he cares about. Hes concerned with war and peace and authoritarian and democracy and all the big problems of the early 20th century. And then i read that stuff, i have to say i feel like the economics profession today doesnt seem to be working at the same level of ambition for the most part. There are exceptions clearly and a lot of very good economists out there but the idea that you would sit down with i feel like economists are there to tell us know, that we cant do the things we want to do and cant solve the problems that we want to solve and my question for you, stephanie, here, what are the big problems that economists need to solve today if its not debt and deficits, what should the great minds from academia be focusing their attention on if its not debt and deficit . Well, i think in the moment it seems to me that the obvious answer is unemployment and this is the big problem to wrestle with in theory and the economy in midst of Great Depression and we find yourselves with tens of millions of people who have lost jobs in the course of shortest span of this magnitude of job losses in the nations history. We have to figure that out. I think that probably right now theres no higher calling than to deal with unemployment but, you know, you know this, you and i know a lot of these people, there are economists all over the country. Now, you and i might agree that there arent enough, but there are economists that are also engaging in the climate space, not necessarily as experts on. And also they bring a lot to the table and to the extent that we can work Better Together and i think economists are not very good at this, we think that our discipline sits higher in the pyramid in the hierarchy than a lot of other disciplines. I did a chapter in the book on this, but i want to talk about your book and i i want to i want you to share with the wonderful people who are here what made you want to study this man who i think its a fascinating figure but what was it about him that made you study and spend years i presume, studying his life. I studied philosophies and undergarage but in 2006 the job i fell into i graduated from college was job with the financial journalists and i was looking at the virginia which is now part of the global. I wasnt terribly concerned of covering banking as as a 22yearold and became excited to cover the Banking Sector and there was this clear shift that happened over the course of 2007 and 2008 where everybody who i talked in the markets was like, oh, we all agree that markets are rational, we all agree that supply and demand, supply and find prosperous equilibrium and we know things will work out if the government stays out of the way and move very quickly to saying, oh, well, obviously the government needs to intervene immediately to rescue the Financial Sector otherwise the economy is going to collapse and society is going to fall in despair and when the shift happens, people were very open with, Financial Market participants were very open with me about the fact that they were changing their minds. I dont want to accuse the people of hypocrisy but all of a sudden they were talking about this guy, John Maynard King and saying his ideas were relevant and key in a way where previously he had been sort of dismissed to academic margins, if you were specialist as an economist, i guess paul had a job in the New York Times but academically it wasnt taken too super seriously and you had to work for a particular institution if you were academic and in the markets they didnt really talk about it like it was a real thing and suddenly thats legitimate. I thought that was incredible not only because people had changed their tune but because the possibilities that were available in terms of policy making just seems incredibly broad and the specific policies that we pursued in 2008 where we basically filled out the Financial Sector and let everybody twist in the wind, that struck me as the not terribly great way to go about rescuing an economy and struck me as as odd that a fellow this famous would prescribe Something Like that so i went and started reading kings. I started reading the general theory. The general theory is a real nasty piece of work. You want to give yourself a big headache, go just open the general theory and start on page 1 and try to get through it. Its a brilliant book, one of the great, great triumphs of western letters, you have to slide through dozens of pages of nasty crazy nonsense until you get to that one gem and youre like, oh, my goodness, the man is god and i went to Read Economic consequences which is the treaty of versailles. Its much easier towns. Economically not nearly as sophisticated. Its what makes him famous i think today as an economists but the moral force of the document and the political ideas involved, i think are just as urgent as everything in general, any piece of political writing ive ever encountered and that is something really serious. Essentially the leaders who have ordered the peace treaty have, you know, theyve assumed over the course of the war or the reparations duties on germany, you know, lost world war i obviously. As a result people are going to be shipping money across different borders and theyre not going to have the Funds Available to mobilize those real resources that make their economies recover and generate prosperity and the really i think brilliant point is that thats not just going to be an economic problem, people are going to blame outsiders for the fact theyre not recovering and theyre not going to be totally wrong because there will be ship in capital abroad that could be spent at home and and that is going to fuel international resentment and lead to dictatorship and war and i thought that connection between economic disfunction and social crisis was something that i had not i felt the sense of unfairness over the bailouts in 2008, but i didnt feel like there were economists who were putting it together saying, like, okay, well, the reason the numbers appear to add up on paper but actually results in socially terrible results, that just didnt feel like that was something that was coming down from high, from people whether republicans or democrats in positions of economic expertise. And king in his work i felt like this deep, deep moral force, and also this concern for things that were not really about dollars and cents. Like he was concerned about equations but he was afraid of dictatorship and war and he was afraid of big social problem. Not the part of gold at the end to have rainbow but the fascism at the end of the rainbow. He was afraid of something bad happening to society and into this community, not of an equation that failed to balance appropriately but and so i just became completely obsessed with the guy and i was a philosophy student so i found a lot of his ideas, very easy to understand him as a philosopher, more so than economicticion. Its not somebody that cared about mathematics even though he studied when he was at cambridge. Hes one of the greatest economists who has ever lived, degree in economics and not mathematics. It is being born when he studied as an undergraduate. I wrote this book because of the crash of 2008 and my feeling of confusion on where the world was going and moral despair and i felt like king is somebody who could speak to that sense of of uncertainty and of unfairness frankly that was in the air at the time. I feel like, you know must feel almost in a sense that you know him, like youre so inside his head and you come to this in the moment right on the praecipes of economic meltdown and you talk about the treaty of versailles and reparations on germany and how king could foresee the kind of the rise of fascism and social unrest and all of that, how did it feel working on this project and looking at what was happening in europe where, you know, the greek debt crisis, not just greeks but not feeling like you were living the moment . Oh, it was terrifying. I remember being so i went to cambridge to to go through his papers at kings college, and in the spring of 2017 and this was past the debt crisis but every single week youll see headlines about golden dawn and these these horrible like farright fascist parties that were rising up in greece and other countries and not just french parties but the conservative parties were also sort of consumeing these parties and making their part of mainstream conservative, you know, policy agenda, and it was frightening. You would go through his papers and be like im really, really worried, im really worried that italy will go fascist very soon and, boom, they would do it. You would keep turning the pages of a document. The idea that there was an economic connection, it was obvious, common sense. I feel like you kind of have to argue that now in the United States in this weird way politically that theres a connection between Economic Policy and social disruption this way which i dont think you actually have to do in europe. In europe people just kind of accept that they might deny that they are not particular policy maker and the idea that these things are connected is just common sense over this. So in a certain sense it was nice being around other people who i think sort of saw this connection between economics and social policy the way i did, certainly being in dc, you just talk to people on the hill, well, all we care about growth and so long as we have growth everything is fine. Okay, but, you know, these people in the industrial midwest who like dont have jobs and their communities are rotting, like are you youre not worried about that, no, because of all the growth. [laughter] what why would you look at the metrics this way . And i felt like theres some things with king when you go through his letters, he has this incredible capacity to communicate to other people and and you i dont want to say that he felt the way i felt looking at these things but i felt a real sense of, there was a real assess thans with a lot of