Henry George School of Social Science
Spring 2024
Explain the following terminology used by Kelton in Chapter 2:
Fiat currency
Cost-push and demand-pull drivers of inflation
Federal Reserve dual mandate
Functional finance
Automatic stabilizer
In Chapter 2, Kelton discusses certain concepts from orthodox economics but is highly critical of them. In your own words, describe these concepts and Kelton's criticism of them.
Monetarism
Natural rate of unemployment
From the MMT perspective, the political slogan, "Tax the rich to pay for the Green New Deal," is problematic. Why?
In Chapter 2 Kelton introduces the concept of the the Federal Job Guarantee (JG).
What is the connection between the a federal Job Guarantee and the U.S.'s monetary sovereignty?
Why would the JG have to be financed by the federal government?
How would the JG stabilize inflation?
What would be the difference between the JG wage and current federal/state/local minimum wage laws?
Kelton writes, "The threat to our common well-being isn't the budget deficit. It's excessive inflation." (69) "[U]nder current budgeting procedures, Congress doesn't have to consider inflation risk when it wants to spend more." (70) How would consideration of inflation risk be integrated into the federal budgetary decision-making process?