The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy

Stephanie Kelton emerged as a prominent voice in economic policy through an unconventional path that combined rigorous academic training with practical policy experience. After completing her undergraduate studies at California State University, Sacramento, she earned her master’s degree from Cambridge University and her PhD in Economics from The New School for Social Research, an institution known for its heterodox approach to economic theory.

Her academic career began at the University of Missouri-Kansas City, where she eventually became chair of the economics department. During this period, she developed her expertise in monetary theory and public policy, particularly focusing on the operational realities of modern monetary systems. This institutional environment proved crucial to her intellectual development, as UMKC served as a center for post-Keynesian economic thought and modern monetary theory MMT research.

Kelton’s transition from pure academic work to policy influence accelerated when she served as Chief Economist on the US Senate Budget Committee minority staff in 2015, working under Senator Bernie Sanders. This position provided her with direct insight into federal budgeting processes and policy formation. Later, during Sanders’ presidential campaigns in 2016 and 2020, she acted as an economic advisor, helping to shape progressive economic proposals and bringing MMT principles into mainstream political discourse.

Currently holding the position of professor of Economics and Public Policy at Stony Brook University, Kelton has maintained her academic credentials while expanding her public influence. She founded and serves as Executive Director of the Center for Economic and Public Policy at Stony Brook, bridging theoretical research with practical policy applications.

Beyond The Deficit Myth, Kelton’s scholarly contributions include numerous academic publications. Her earlier work examined the historical evolution of monetary systems and the relationship between monetary policy and full employment. She has consistently challenged orthodox economic frameworks, particularly regarding government debt and deficit spending.

The Deficit Myth represents the culmination of Kelton’s decades-long engagement with monetary theory and policy implementation. The book synthesizes complex economic concepts with practical policy experience, reflecting her unique position at the intersection of academic economics and public policy.

Kelton’s influence extends internationally through her role as a leading MMT proponent. She has advised policymakers globally and served as a visiting professor at the University of Ljubljana and the University of Adelaide. Her work has contributed to shifting economic policy discussions in multiple countries, particularly regarding sovereign currency systems and public spending capabilities.

Throughout her career, Kelton has received both recognition and criticism from within the economics profession. While traditional economists often challenge her conclusions, she has garnered support from practitioners and policymakers who find MMT’s framework useful for understanding government finance operations.

The success of The Deficit Myth elevated Kelton’s public profile, leading to increased speaking engagements and policy consultations. The book’s publication coincided with massive government spending during the COVID-19 pandemic, lending practical relevance to her arguments about fiscal capacity. This timing helped demonstrate MMT principles in action, as governments worldwide deployed unprecedented fiscal responses.

Kelton’s work continues to influence contemporary policy debates, particularly regarding climate change, healthcare, and education funding. Her emphasis on operational realities rather than theoretical constraints has provided policymakers with new frameworks for addressing persistent social and economic challenges. Through her ongoing research, teaching, and public engagement, she maintains an active role in reshaping understanding of public finance and economic policy possibilities.