Tax revenues are not what finance the government’s expenditures, argues Stephanie Kelton, an economist at Stony Brook University and one of the most influential modern monetary theorists. Then government agencies start handing out dollars to the public to pay for those tanks, earth movers and salaries. Ms. Kelton, a frequent speaker at business and financial conferences and the chief economic adviser to Mr. Sanders during his 2016 presidential campaign, points out that every dollar the government spends translates into a dollar of income for someone else. The reverse is also true, Ms. Kelton maintains, and that can lead to trouble. The seven biggest American depressions or downturns going back 200 years, she said, were all preceded by government surpluses.

Source: New York Times April 05, 2019 15:10 UTC