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What does that mean and how does it work? Are there other countries that do it?

I heard this phrase just now in this video. https://youtu.be/KxdU_wRCzYM

Update: Here is a more direct link to where the phrase appears in the video, 20 seconds earlier to include context. https://youtu.be/KxdU_wRCzYM?t=574

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  • Please be more clear (as in providing a link to where you heard that phrase, and a quote in context).
    – RonJohn
    Commented Aug 17, 2021 at 21:29
  • @RonJohn I updated my question with a link.
    – JSNinja
    Commented Aug 17, 2021 at 21:35
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    The link is to a live feed, so it doesn't actually take us to a context where someone said this. But since it's a pair of guys doing a talk show the simple explanation is that they don't really know what they mean.
    – DJClayworth
    Commented Aug 17, 2021 at 21:51
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    @quid more like Bad Economics.
    – RonJohn
    Commented Aug 17, 2021 at 22:43
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    You need to read en.wikipedia.org/wiki/Quantitative_easing.
    – RonJohn
    Commented Aug 17, 2021 at 22:44

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This is posited by Stephanie Kelton in her book The Deficit Myth.

Currency users must gather money before they spend it. You and I need to earn money or borrow it before we can buy goods and services, but the US government can simply spend money into existence: the Federal Reserve electronically credits bank accounts with brand new dollars. The government then taxes away the new money or exchanges it for US Treasuries, gathering back the tokens it creates. Spending thus comes before tax and borrowing, not after.

To understand it, you'll need to dig into Modern Monetary Theory (MMT).

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    There's no free lunch; never has been, and never will be. That means the US government will -- at some point soon after the petrodollar loses it's power -- have to pay the piper.
    – RonJohn
    Commented Aug 17, 2021 at 22:42
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    @RonJohn Why do you think so? Only if there's too much money in circulation do they need to destroy some or spend less. If the exchange rate crashes it will affect everyone in the country equally.
    – Stack Exchange Supports Israel
    Commented Aug 18, 2021 at 8:14
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    @RonJohn what do you think the free lunch is?
    – Stack Exchange Supports Israel
    Commented Aug 18, 2021 at 8:38
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    @user253751 I think that's divorced from reality.
    – RonJohn
    Commented Aug 18, 2021 at 13:33
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    @user253751 I'm sure that some economists are divorced from reality; I'd even believe that a generation of economists have been taught to be divorced from reality. But just as "rational man" is arrant nonsense, so is the notion that there's a free lunch.
    – RonJohn
    Commented Aug 18, 2021 at 14:12

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