Season 1 · Episode 432
Government debt, bonds and money supply
Stephanie Kelton says their red ink is our black ink. How does that work exactly?
Debunking Economics - the podcast · Steve Keen & Phil Dobbie
December 4, 202442m 18s
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Show Notes
Does government debt expand the supply of money? According to Modern Monetary theory, yes it does. It’s all down to simple double-entry book-keeping and an understanding of the role of financial equity. As Steve explains, in this step-by-step guide, for the private sector to experience positive equity, the government sector has to have negative equity. In other words, without the government sector spending more than it’s earning, there’s no new money being added to the private sector. As Stephanie Kelton puts it, their red ink is our black ink. This is one episode to share with your friends.
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