The Deficit Myth

Henry George School of Social Science

Spring 2022

Week 2 (April 25 2022) Discussion Questions

Chapter 1: Don't Think of a Household

• Explain the difference between a government which is a currency issuer and one which is a currency user.
• What are the conditions which, per Kelton, a country must meet in order to be monetarily sovereign?
• Explain Kelton's use of the nomenclature (TAB)S versus S(TAB).
• What does it mean for a government to "provision itself"?
• Explain how the imposition of a tax drives demand for the currency in which the tax is to be paid.
• Kelton identifies 4 rationales for (federal) taxation. (32-34) Explain them in your own terms.
• Kelton characterizes U.S. federal government borrowing as a choice rather than a necessity. Explain why.
• Kelton criticizes the PAYGO rules which Congress imposes on itself. What are those rules and why does she take issue with them?