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Foremost of these is the notion that deficits don't matter, because any government that has the power to create its own currency will never run out of money. Professor Kelton is critical of popular thinking among both government leaders and mainstream economists that a government budget is like a household budget and that excessive spending and borrowing will lead to bankruptcy. The flaw in this thinking, according to Kelton and other MMT economists, is that unlike households, private business or even state governments, a federal government in control of the creation of its currency can never run out of money. On the contrary, it is the creator of money, and can always create more with a simple entry on the keyboard of a computer that keeps an electronic ledger with the Federal Reserve. Also contrary to popular thinking, Kelton and other MMT economists believe that it isn't deficits that are harmful to the economy, it is balanced or surplus budgets because these take money out of the private sector, limiting opportunity for economic growth. Government deficits inject that money into the economy, increasing the money supply and along with it, the opportunity for use of that money to stimulate and grow the economy.
Professor Kelton never uses the phrase "turn the crank" (which implies the printing of money), though this is essentially what she is advocating. But while this strategy has failed in other countries, such as Venezuela, Greece and pre-war Germany, this author distinguishes what happened in those countries. Weimar Germany operated on a gold standard, a constraint which no longer exists. Greece and Venezuela did not have control of their own currency. In the case of Greece, the nation had given up control of its currency creation to the EU, while Venezuela was also subject to currency controls. MMT economists see money a "creature of law" rather than a commodity.
This is not to suggest however that politicians should "go nuts" and spend, spend, spend. Kelton sees the real evil as inflation and is aware of the potential for over-inflated deficits to place the economy off kilter by spending to the point of creating intolerable inflationary conditions. She sees the answer to this dilemma as injecting just enough money into the economy to create full employment. She also has an interesting idea of addressing periods of high unemployment by creating a right to a job for all who want to work. Under her plan, deficit spending would be used to create employment for those who are unemployed and want to find a job at what she calls a living wage ($15 USD per hour), offering employment in projects operated by local management, geared toward enterprises that would benefit the social good. These include building infrastructure, care for the poor and elderly, or environmentally friendly projects.
Professor Kelton is convinced that deficits don't matter when the deficit is created by a currency monopolist such as a federal government with an independent currency (e.g. the United States, Canada, Australia, Great Britain, China, India and other nations with their own currency.) She considers government red ink to be the public's black ink, and also sees trade deficits as good for the country as well as for developing nations because they provide the nation with real goods in return for an accounting entry. She is also convinced that there will always be enough money to fund entitlement programs, once again because the government has the power to create the money needed to keep these programs afloat.
As the author points out in her penultimate chapter, there are a number of deficits that are more concerning than a federal government's budget deficit. These include the deficit in good jobs, the savings deficit, the health care deficit, the education deficit, the infrastructure deficit, the climate deficit, and a deficit in democracy itself. Professor Kelton sees MMT as a means of addressing these problems with spending to address those that can be directly addressed, and by narrowing the income disparity gap through the means of injecting money into the economy, directed to those most in need.
In much of the book, the author takes her conclusions as self-evident or logical, without making a convincing argument or without demonstrating the clarity that she seems to see in them. Many economists from more orthodox schools of thought fault her logic as well as her analysis of inflation. It is difficult to understand how the level of deficit spending proposed by the author would not lead to inflation, as has occurred in other nations where mass injection of currency has led to its devaluation. The author also spends little time addressing the relationship between debt and deficits, and their proportion to a nation's gross domestic product (GDP), something very concerning as government spending continues to increase. The Congressional Budget Office that Professor Kelton once worked with continues to warn against the dangers of high deficits, especially as the federal debt of the United States begins to exceed 100% of GDP.
In spite of this, MMT is gaining in popularity and has been used as an argument in favor of recent mass increases in government spending by governments in their attempt to speed up recovery from the economic effects of the Covid-19 pandemic. Rising political stars such as Alexandria Ocasio-Cortez and others in the progressive movement have thrown their support behind this way of economic thinking, and it may be that in the not too distant future, MMT will transition from its theoretical realm on the chalkboard into actual government budgets, and people will learn first hand whether it will prove to be an economic savior or the accelerant of the economic downfall of those nations that espouse it.