full transcript

From the Ted Talk by Stephanie Kelton: The big myth of government deficits

Unscramble the Blue Letters


It matters how the money is spent and who ends up with the resulting sulurps. Tax cuts that delievr huge windfalls for those at the top without sparking investment and otuprpointy for the rest of the population don't make good use of deficits. On the other hand, spending trillions to support the economy during the pandemic put the deficit to good use. We just had the shortest recession in US history. To me, that was fiscally responsible. Being responsible shouldn't mean running the government's finances like a household.

Instead of trying to keep the deficit in check, Congress should be focused on keeping inflation in check. That's the real limit on spending and it's the thing to watch out for if you're thinking about spending toirllnis on things like infrastructure, htaleh care and free college. Instead of asking, "How will we pay for it?," conesgrs should be asking, "How will we rrecsoue it?" To answer that question, think of people, factories, equipment and raw materials like wood and iron. If we're going to build high-speed rail, fix crumbling infrastructure and green our economy, then we'll need concrete, steel and leubmr. We'll need cutocnoirstn workers, architects and engineers. We'll need companies that can fill thousands of orders for sloar pnleas, EV crgiahng stations and electric shcool buses. If our economy has the productive capacity to quickly supply all of those things, then we can easily resource it. Or take health care or free college. Paying the bills to expand Medicare, to include dental, vision and hearing is easy. The cglhealne is making sure we have enough dentists, optometrists and audiologists to treat everyone who needs care. And if you want to resource free coeglle, then you need the faculty, the classrooms and the dormitories to tceah and hsoue more students. In a full-employment economy, all of the resources you need are, well, fully employed. There's no spare capacity anywhere in the system. So if the government sedlduny tried to make all of these investments at once, it would quickly dsecovir that it doesn't have the pepole or the building materials to do the work. To get the resources it needs, it would have to compete with the private sector, bidding up wages and prices. That would be itlnafionary and it would be fiscally inreolirbsspe.

Open Cloze


It matters how the money is spent and who ends up with the resulting _______. Tax cuts that _______ huge windfalls for those at the top without sparking investment and ___________ for the rest of the population don't make good use of deficits. On the other hand, spending trillions to support the economy during the pandemic put the deficit to good use. We just had the shortest recession in US history. To me, that was fiscally responsible. Being responsible shouldn't mean running the government's finances like a household.

Instead of trying to keep the deficit in check, Congress should be focused on keeping inflation in check. That's the real limit on spending and it's the thing to watch out for if you're thinking about spending _________ on things like infrastructure, ______ care and free college. Instead of asking, "How will we pay for it?," ________ should be asking, "How will we ________ it?" To answer that question, think of people, factories, equipment and raw materials like wood and iron. If we're going to build high-speed rail, fix crumbling infrastructure and green our economy, then we'll need concrete, steel and ______. We'll need ____________ workers, architects and engineers. We'll need companies that can fill thousands of orders for _____ ______, EV ________ stations and electric ______ buses. If our economy has the productive capacity to quickly supply all of those things, then we can easily resource it. Or take health care or free college. Paying the bills to expand Medicare, to include dental, vision and hearing is easy. The _________ is making sure we have enough dentists, optometrists and audiologists to treat everyone who needs care. And if you want to resource free _______, then you need the faculty, the classrooms and the dormitories to _____ and _____ more students. In a full-employment economy, all of the resources you need are, well, fully employed. There's no spare capacity anywhere in the system. So if the government ________ tried to make all of these investments at once, it would quickly ________ that it doesn't have the ______ or the building materials to do the work. To get the resources it needs, it would have to compete with the private sector, bidding up wages and prices. That would be ____________ and it would be fiscally _____________.

Solution


  1. solar
  2. people
  3. charging
  4. trillions
  5. irresponsible
  6. house
  7. panels
  8. discover
  9. opportunity
  10. surplus
  11. construction
  12. college
  13. health
  14. congress
  15. lumber
  16. challenge
  17. suddenly
  18. school
  19. teach
  20. resource
  21. deliver
  22. inflationary

Original Text


It matters how the money is spent and who ends up with the resulting surplus. Tax cuts that deliver huge windfalls for those at the top without sparking investment and opportunity for the rest of the population don't make good use of deficits. On the other hand, spending trillions to support the economy during the pandemic put the deficit to good use. We just had the shortest recession in US history. To me, that was fiscally responsible. Being responsible shouldn't mean running the government's finances like a household.

Instead of trying to keep the deficit in check, Congress should be focused on keeping inflation in check. That's the real limit on spending and it's the thing to watch out for if you're thinking about spending trillions on things like infrastructure, health care and free college. Instead of asking, "How will we pay for it?," Congress should be asking, "How will we resource it?" To answer that question, think of people, factories, equipment and raw materials like wood and iron. If we're going to build high-speed rail, fix crumbling infrastructure and green our economy, then we'll need concrete, steel and lumber. We'll need construction workers, architects and engineers. We'll need companies that can fill thousands of orders for solar panels, EV charging stations and electric school buses. If our economy has the productive capacity to quickly supply all of those things, then we can easily resource it. Or take health care or free college. Paying the bills to expand Medicare, to include dental, vision and hearing is easy. The challenge is making sure we have enough dentists, optometrists and audiologists to treat everyone who needs care. And if you want to resource free college, then you need the faculty, the classrooms and the dormitories to teach and house more students. In a full-employment economy, all of the resources you need are, well, fully employed. There's no spare capacity anywhere in the system. So if the government suddenly tried to make all of these investments at once, it would quickly discover that it doesn't have the people or the building materials to do the work. To get the resources it needs, it would have to compete with the private sector, bidding up wages and prices. That would be inflationary and it would be fiscally irresponsible.

Frequently Occurring Word Combinations


ngrams of length 2

collocation frequency
federal government 4
health care 3
red ink 3
spending trillions 3
black ink 2
fix crumbling 2
raw materials 2
government spends 2
free college 2


Important Words


  1. answer
  2. architects
  3. audiologists
  4. bidding
  5. bills
  6. build
  7. building
  8. buses
  9. capacity
  10. care
  11. challenge
  12. charging
  13. check
  14. classrooms
  15. college
  16. companies
  17. compete
  18. concrete
  19. congress
  20. construction
  21. crumbling
  22. cuts
  23. deficit
  24. deficits
  25. deliver
  26. dental
  27. dentists
  28. discover
  29. dormitories
  30. easily
  31. easy
  32. economy
  33. electric
  34. employed
  35. ends
  36. engineers
  37. equipment
  38. ev
  39. expand
  40. factories
  41. faculty
  42. fill
  43. finances
  44. fiscally
  45. fix
  46. focused
  47. free
  48. fully
  49. good
  50. government
  51. green
  52. hand
  53. health
  54. hearing
  55. history
  56. house
  57. household
  58. huge
  59. include
  60. inflation
  61. inflationary
  62. infrastructure
  63. investment
  64. investments
  65. iron
  66. irresponsible
  67. keeping
  68. limit
  69. lumber
  70. making
  71. materials
  72. matters
  73. medicare
  74. money
  75. opportunity
  76. optometrists
  77. orders
  78. pandemic
  79. panels
  80. pay
  81. paying
  82. people
  83. population
  84. prices
  85. private
  86. productive
  87. put
  88. question
  89. quickly
  90. rail
  91. raw
  92. real
  93. recession
  94. resource
  95. resources
  96. responsible
  97. rest
  98. resulting
  99. running
  100. school
  101. sector
  102. shortest
  103. solar
  104. spare
  105. sparking
  106. spending
  107. spent
  108. stations
  109. steel
  110. students
  111. suddenly
  112. supply
  113. support
  114. surplus
  115. system
  116. tax
  117. teach
  118. thinking
  119. thousands
  120. top
  121. treat
  122. trillions
  123. vision
  124. wages
  125. watch
  126. windfalls
  127. wood
  128. work
  129. workers