The Transformative Power of Wonder & How Money REALLY Works - SYSK Choice

It is hard to imagine life without sunglasses. So, who came up with the idea – and when? We begin this episode by going way back to the very first pair of sunglasses and I’ll reveal how our modern-day sunglasses came about not all that long ago. ago. http://www.glasseshistory.com/glasses-history/history-of-sunglasses/ We have all felt that sense of wonder. It’s that feeling you get when you first see the Grand Canyon or an incredible sunset or the stars above against a really dark sky. Sadly, we often lose our sense of wonder as we get older. Still, your sense of wonder is worth holding on to and developing further, according to Monica Parker. She has spent many years helping people discover how to lead lives full of wonder. Monica is author of the book The Power of Wonder (https://amzn.to/3I5F5Y4). Listen as she explains the amazing benefits of finding wonder in your world. What is money and how does it work? It may seem like a simple question yet, there is a lot of misunderstanding about it. One example is that some people worry about the federal government running out of money. What if the government can’t pay its bills? Well, that can’t happen according to L. Randall Wray, a professor of Economics at Bard College, Senior Scholar at the Levy Economics Institute and author of Money for Beginners: An Illustrated Guide (https://amzn.to/42BuPPG). Listen as he discusses how money works, how it has changed and what the future of money is. Some people claim they can get by on 4 or 5 hours of sleep? Really? What happens when people who sleep very little are tested against people who get a good night’s sleep? Listen as I explain what happens to people who try to perform on very little sleep. https://www.restoringhealth.center/how-many-hours-of-sleep-do-you-actually-need PLEASE SUPPORT OUR SPONSORS!!! MINT MOBILE: Ditch overpriced wireless and get 3 months of premium wireless service from Mint Mobile for 15 bucks a month at ⁠⁠⁠⁠⁠https://MintMobile.com/something⁠⁠⁠⁠⁠ ! FACTOR: Eat smart with Factor! Get 50% off at ⁠⁠⁠⁠⁠⁠⁠https://FactorMeals.com/something50off⁠⁠⁠⁠⁠⁠⁠ TIMELINE: Get 10% off your order of Mitopure! Go to ⁠⁠⁠⁠⁠⁠⁠https://Timeline.com/SOMETHING⁠⁠⁠⁠⁠⁠⁠ ROCKET MONEY: Cancel your unwanted subscriptions and reach your financial goals faster! Go to ⁠⁠https://RocketMoney.com/SOMETHING⁠⁠ QUINCE: Elevate your shopping with Quince! Go to ⁠⁠⁠⁠⁠⁠⁠https://Quince.com/sysk⁠⁠⁠⁠⁠⁠⁠ for free shipping on your order and 365 day returns! INDEED: Get a $75 sponsored job credit to get your jobs more visibility at ⁠⁠⁠⁠⁠⁠⁠https://Indeed.com/SOMETHING⁠⁠⁠⁠⁠⁠⁠ right now! DELL: The power of Dell AI with Intel inside is transforming the world of pro sports! For the players and the fans who are there for every game. See how Dell Technologies with Intel inside can help find your advantage, and power your wins at ⁠⁠⁠https://Dell.com/Wins⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Mike Carruthers?

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• 0:42Mike Carruthers?

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• 1:26Mike Carruthers?

  Today on Something You Should Know, who came up with the idea for sunglasses, and when? Then, finding wonder in the world and why it's such a good idea to develop your sense of wonder.

• 1:39Speaker 01

  Because it's really an incredibly beneficial emotion, both psychologically and physiologically. And what's really fascinating to me is there appears to be a direct biological pathway between wonder and better health.

• 1:53Mike Carruthers?

  Also, can people really get by on four to five hours of sleep and still perform well? And what is money? How does it work? There's a lot of confusion. For example, people think the government might run out of money.

• 2:06Speaker 02

  We cannot run out of money. Impossible. Money is a keystroke credit to an account. It is a keystroke. You cannot run out of keystrokes. A bank can't run out of money. The Treasury cannot run out of money.

• 2:22Mike Carruthers?

  All this today on Something You Should Know.

• 2:26Mike Carruthers?

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• 3:09Mike Carruthers?

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• 3:52Mike Carruthers?

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• 4:22Mike Carruthers?

  Hi, welcome to Something You Should Know. This morning, I woke up to a bright sunny day, like many people, and, as usual, one of the first things I reached for before I head out the door: my sunglasses. And it made me wonder, where did sunglasses come from? It turns out that even in prehistoric times, people wore, basically, sunglasses made out of walrus ivory to block harmful reflected rays of the sun. The earliest historical reference to sunglasses dates back to ancient China and Rome. The Roman Emperor Nero apparently liked to watch gladiators fight through polished gems, kinda like sunglasses.

• 5:04Mike Carruthers?

  Around the 12th century, the Chinese came up with wearable dark lenses similar to our sunglasses. They were made from flat panes of smoky quartz. Those ancient sunglasses had little to do with the sun, though. Chinese judges wore them to hide their facial expressions while they interrogated witnesses on trial. It was Sam Foster of Foster Grant fame who came up with the sunglasses we wear today. And in 1929, he started selling his sunglasses from a Woolworth store on the boardwalk in Atlantic City, New Jersey. And soon after that, they became a sensation. And that is something you should know.

• 5:46Mike Carruthers?

  I'm sure you've heard the phrase "childlike wonder." It's a way of looking at the world that gives you pause, makes you see things with a different kind of appreciation. It gives you a perspective on where you fit into the world. Of course, the thing about childlike wonder is, you tend to lose it as you get older. But seeing wonder in the world is actually a great way to view things. And wonder has wonderful benefits, as you're about to hear from Monica Parker. Monica is a speaker, writer, and authority on the future of work. She has spent decades helping people discover how to lead and live a wonderful life. And she's author of a book called The Power of Wonder.

• 6:30Mike Carruthers?

  Hi, Monica, welcome to Something You Should Know.

• 6:33Speaker 01

  Hi, Mike, thanks so much for having me.

• 6:35Mike Carruthers?

  So what is wonder? How do you define it from your perspective?

• 6:40Speaker 01

  Yeah, so wonder is a fascinating word. It's sort of something of a shape shifter. So we have wonder that is the verb to wonder, which might be how we describe curiosity. But there's also wonder that's the noun, which would be a catalyst for, say, the emotion of awe. And so my definition of wonder is really connecting these two concepts into a single emotional experience that starts with openness, moves into curiosity, then absorption and awe. And it's really almost even a cycle because each time we experience one of these components, the more likely we are to experience them in the future.

• 7:16Mike Carruthers?

  And why would we want to experience them in the first place?

• 7:19Speaker 01

  Yeah, because it's really an incredibly beneficial emotion, both psychologically and physiologically. It makes us more creative, more desirous of studying the world around us. It makes us more humble, less materialistic, more generous, better community members. People who are higher in the component, elements of wonder are, tend to have healthier relationships. They perform better in school and work. And what's really, really fascinating to me is the physiological benefits. What we found is that there appears to be a direct biological pathway between wonder and better health because it lowers what are known as our pro-inflammatory cytokines,

• 7:59Speaker 01

  which are markers of inflammation and connected to things like heart disease and Alzheimer's. It also lowers our blood pressure and our cortisol levels, which are our stress hormones. So really, really positive for us, for both our brains and our minds.

• 8:15Mike Carruthers?

  So when I think of wonder, I often think of, you know, the look on a child's face when he sees something for the first time, you know, or Disneyland, a child sees Mickey Mouse and gets up close to him, then that look on the, to me, that's wonder.

• 8:32Speaker 01

  Absolutely, and that is wonder. And even one of the things that I like to tell people is to try to approach life like a child. As a child, they're always adding new experiences and what are known as schemas. So they're basically building the lens through which they see the world. And one of the challenges is that as we become adults, we sort of have decided we already have all the information we need and we decide that there's not so much wonder to be seen anymore. But if we can see the world through the eyes of a child, always beginning, almost that Zen precept of to always be beginning, then we are able to recapture that sense of childlike wonder.

• 9:11Mike Carruthers?

  Well, yeah, and you hear that phrase, childlike wonder, because everybody knows exactly what that is. But what you just said about that as you get older and you have a lot of life experiences, it seems as if there are fewer things to be in awe of, to find wonder in. Because, you know, been there, done that. I've already seen Mickey Mouse a million times. So it doesn't matter to see him again, doesn't inspire those same feelings. That does seem to be true, that as you get older, the world is less wonderful.

• 9:47Speaker 01

  I can appreciate sort of that take, but the reality is that I think that's a perception that we have, because there is so much to feel a sense of wonder about. And there's no question, we can't see Mickey Mouse again for the first time, we can't see the Grand Canyon for the first time, except once. But what research shows is that we can, if we choose to see it, find wonder in the quotidian. We can find it in our day-to-day lives, and that might be just a perfect sunrise or a beautiful autumn leaf. But really, it's about the lens through which we choose to see the world. It's about a mindset.

• 10:23Mike Carruthers?

  Is it, for someone like you who practices this, is it deliberate? Do you have to stop and say, okay, it's time to find some wonder now? Or is it more smooth than that? It just flows?

• 10:39Speaker 01

  What the research shows is that if we prime ourselves to find wonder, and it can be a single-sentence prime, "I'm going to find three things to feel a sense of wonder about today", then our brain will commit greater cognitive resources to finding it. And so certainly priming can help, but over time, as it becomes a practice, neurons that fire together, wire together, and will start to create these neural pathways where we will recognize wonder more often. I don't see it as onerous. I simply see it as another thing that is good for us and fun to do.

• 11:13Mike Carruthers?

  Okay, so I'm looking at a sunset, and it's a beautiful sunset. What's the difference between looking at the sunset and saying, "Isn't that a beautiful sunset", and looking at that sunset and finding wonder in it?

• 11:29Speaker 01

  So one of the main ways is it's something that psychologists call small self. So anything that we experience that feels a sense of vastness, and that can be a sense of emotional vastness or cognitive vastness, where we say, "Goodness, this makes me feel like a small component part of a bigger system." That's really how we start to tap into wonder, and that's where we start to get the benefits of wonder, where we get that neuroplasticity, where we start to feel prosocial emotions, which are the helping emotions like compassion and empathy. And so really, if we have that experience and consider where we as a human connect into this bigger cosmos of the world, that's where we start to feel that sense of wonder.

• 12:13Mike Carruthers?

  Okay, but in a very practical way, you're now looking at this beautiful sunset. What is it that goes through your mind that does what you just said without saying neuroplasticity and other big words like that?

• 12:27Speaker 01

  Yeah, it's really just to say, "This makes me feel small. This experience is so big that it makes me feel small." And that idea of small self, to appreciate the immensity of that moment and not to become habituated to say, "Oh, well, there's a sunrise every day. It's not a big deal." Instead, to say, Look at this incredible opportunity we have for another day. Look at the beauty, how it changes all the time. To have that sense of vastness is really where we're able to connect. And then say, but that makes me feel small. And when we feel smaller, it makes our problems feel smaller. It makes us connect to other people more deeply.

• 13:08Speaker 01

  And so really, it's that opportunity to say that I am only a small piece of such a bigger magical puzzle.

• 13:16Mike Carruthers?

  So that's wonder to, to, an experience that makes you feel smaller in, in reference to what you're in wonder of?

• 13:26Speaker 01

  That is probably one of the main components, absolutely, that sense of small self. There are other aspects of it, certainly being absorbed, being fully present, not trying to, really trying to shut down that chattering mind that we all have. So that's one of those things as well, if we can actually be present in the moment and not be thinking about, well, what's our to do list for that week? Other ways we can do that, of course, is by deep curiosity to, to explore in our own minds. You know, the, the, the cognitive elements or the intellectual elements of what we're experiencing. But really, probably one of the key pieces is that smallness.

• 14:03Mike Carruthers?

  But what is the, I mean, you, I know you mentioned about the, the benefits of doing this, but, but say, for example, because I saw this the other day.

• 14:13Mike Carruthers?

  You look at it like a double rainbow and it, it is just, it's just incredible to see. It's so big and yes, you feel so small compared to this thing. And, and then it's gone. And just like the rainbow disappears. My experience is over and my life goes back to where it was. It was a brief moment, it was a pause, it was a distraction and it was beautiful. And wow, it's wonderful. But so what? I mean, you know, now it's gone and, and you know, now I've got to go pay the bills.

• 14:46Speaker 01

  Sure, and I, you know, there's an expression that says after the ecstasy, the laundry. There's no question that, that there are, that there's life that we have to deal with and that this is a moment in time. But there are ways that we can extend and deepen the impact that it has, simply by taking time to recognize it while it might not have felt like it changed you. The research would show that that does linger, that that has a, a longer term benefit than just that moment. But also, there are other ways that we can help extend that. If you were to share that experience with someone else and say, "I saw this incredible double rainbow," then you're basically telling your brain to experience it again. If you were to journal about it or write about it, then

• 15:30Speaker 01

  you would have that additional experience once again. And so there are ways that we can extend that experience or, or magnify it. And there absolutely is, is research that shows that wonder shared is wonder multiplied.

• 15:45Mike Carruthers?

  Because it seems like if I have to now start, start journaling about my rainbow, like it, like it kind of sucks the magic out of it. It came, it went, that's what makes it so wonderful. And now if I'm gonna have to write a paper about it, it seems less wonderful.

• 16:02Speaker 01

  It's not a have to, it's a choice. If that's something that helps you connect to it. Everybody has a different way that they connect to wonder. And so if it, for, if for you, you want it to be ephemeral, you feel that for you, wonder is something that is rare and fleeting, then that can be the way that you experience wonder. Those can be your wonder bringers. For other people, they want to have that experience be multiplied. And so they want to share it, or they want to journal about it. And we do know that having those opportunities to journal or to share it with other people does extend that experience. But it's really very personal. And so for you, if you want it to be rare and fleeting, then it can be. But it will still have a positive impact.

• 16:43Mike Carruthers?

  We're talking about your sense of wonder and all the benefits of developing that sense. And we're talking with Monica Parker. She is author of the book, The Power of Wonder.

• 16:55Mike Carruthers?

  If you listen to something you should know regularly, you know we talk about sleep quite a bit here. And one of the things I've learned from those conversations is just how important a good night's sleep is. And I've always been someone who loves his sleep. So I was intrigued when I heard about Beam Dream. It's a delicious nighttime drink formulated to help you fall asleep faster, stay asleep, and wake up refreshed. It contains ingredients like reishi, magnesium, L-theanine, epigenin, and melatonin. They have lots of great flavors. I tried the cinnamon cocoa flavor, and I love the idea of having something warm and delicious as part of winding down at night.

• 17:39Mike Carruthers?

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• 18:24Mike Carruthers?

  So go to shopbeam.com/sysk now. That's shopbeam.com/sysk. This episode is sponsored by Vinted. You know, I remember interviewing an organizing expert who offered this really clever trick for figuring out which clothes you should get rid of. You go to your closet, and you look at the clothes hanging there. And chances are, the ones toward the middle are the clothes you wear most often. But the clothes pushed way over to the left or the right, some of those you probably haven't worn in years. And yet, there they hang, taking up space. But here's the thing. You could turn those clothes into money. That's where Vinted comes in.

• 19:09Mike Carruthers?

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• 19:52Mike Carruthers?

  With no seller fees, you keep every dollar you earn. That's Vinted, V-I-N-T-E-D. So Monica, one of the things about wonder that I really enjoy is not only, is not just the thing that everybody's oohing and aahing about. It's watching the people ooh and aah. And I think I've mentioned this on another episode, but I remember very distinctly, there used to be, in Long Beach, California, next to the Queen Mary, there used to be Howard Hughes' Spruce Goose airplane, which he built out of wood in World War II. I don't remember the story, but this airplane is so big.

• 20:34Mike Carruthers?

  It is so immense, you can't even imagine how big it is, unless you see it. And I was standing at the doorway where people would come around the corner and it would smack them in the face. And to a person, I would watch them come around the corner and they would go, "Oh my God, oh my God, oh my God." Because they were just in awe of this thing, because no one knew how big it was. And I just got such a thrill out of watching that. Kids, grownups, everybody would turn the corner and just be in awe.

• 21:14Speaker 01

  And you've just perfectly encapsulated how wonder shared is wonder multiplied.

• 21:21Speaker 01

  Even though those people perhaps didn't know that they were sharing that experience with you, you were sharing it with them. And by watching them experience it, you got that little dose of it as if you were experiencing it again for the first time. And so I think that's a perfect example of one of the reasons why we love to have these wonder experiences together, why, you know, people go to church as a group, why people like to enjoy music and gigs as a group, because that sense of wonder, that sense of awe, that sense of exploration and discovery can be shared. And it has an impact then that is greater than the sum of its parts.

• 22:03Mike Carruthers?

  Do you think, though, that when you start to find wonder in lots of things, that part of wonder, part of the element, one of the elements of wonder is its rarity? That, and if you see wonder in everything, then you're not seeing wonder in anything, because it's all wonderful?

• 22:22Speaker 01

  And I think that I can appreciate why people would think that. And even the original folks who were studying this, so if we go back to even Maslow, his idea of a peak experience is really a wonder experience. And Maslow believed that peak experiences were rare and fleeting. But towards the end of his life, he believed that in fact, we could find them quite frequently. Some of the awe researchers also in the beginning believed that awe was always only rare and fleeting. But now they've found that those rare and fleeting moments can have the same benefit as these quotidian moments, because it almost becomes aggregated. It's these little moments that add to each other and can still have the same impact. And so, again, it's about shifting the lens and saying,

• 23:06Speaker 01

  it doesn't only have to be that. If that's your choice, it can be. But what I want to encourage people to do is really instead to have a mindset in which we can find it anywhere.

• 23:18Mike Carruthers?

  Do, has there been any research, do you find that it seems like as people age, that it, wonder becomes less a part of their life? It's just, it's, it's because it has to be more deliberate, because you, things are, fewer things are new and exciting and, and is that true? I mean.

• 23:37Speaker 01

  It is absolutely true. It's true for a couple of different reasons. First, one of the key components of wonder being curiosity. We are naturally less curious as we age. This is simply, again, because we think that we've discovered everything there is to discover. But of course, that's erroneous. There's so many things we can discover. But curiosity is a bit like a muscle. The more that we practice it, the more then that we will be able to experience curiosity. So if we can hone that sort of curiosity muscle, then we will find more things to feel a sense of wonder about. But we are dealing with a more calcified brain. We're dealing with, you know, neural pathways that are very set. And we're dealing with more schema, building blocks that have decided, well, I know everything

• 24:22Speaker 01

  there is to know about the world. But I think in that, there's a little bit of hubris as well, you know, a little bit of ego to say, well, I've seen it all. But of course, if we, again, approach things with the eyes of a child, we can find those elements to feel a sense of wonder about. But there's no question that it is harder than it is for children. And that's one of the reasons why I believe we feel such a sense of wonder watching children experience those things for the first time. It's why we get so much joy watching babies and children, you know, have those experiences.

• 24:52Mike Carruthers?

  Generally, I think when people think of wonder, they think of it in a very positive way. But it seems like you can find wonder in negative situations, sad situations. It's, it's not all positive and wonderful. You can find wonder in the bad, too.

• 25:09Speaker 01

  And that's that sense of mixed emotion. Another one of those is nostalgia is a mixed emotion where we can reflect back and consider both the positive and negative. And it's really positive that it's beneficial for us. There was a piece of research done where widows and widowers, if they reflected on their deceased loved one and remembered both the positive and negative elements of their relationship, they were more resilient, they were better able to manage their grief. And so what we know is if we choose to receive both the positive and negative as opposed to sort of a toxic positivity pushing always towards being happy, then that gives us a greater what's known as hemodiversity. It means that we have a better portfolio of emotions to access and that's really helpful for us.

• 25:54Speaker 01

  And so what you're talking about is sort of this mixed emotion where there's a little bit of a poignancy of remembrance of happiness, but also of struggle and sadness. And having those two at the same time is really, really helpful. It also shows that it makes us more tolerant people because we're able to see nuance in the world as opposed to everything being black and white, happy or sad.

• 26:16Mike Carruthers?

  At the very beginning of our conversation, you said that there are some real benefits to finding wonder in life, health benefits. And so how much wonder do you have to find? How much wonder do you have to see to get those benefits?

• 26:32Speaker 01

  What the research says is that it doesn't actually take that much. There's some experiments that have been done where people looked up just at a grove of trees for two or three minutes and they were able to have benefits. Or people watched drone footage of something that was awe inspiring and they were able to have benefits that lasted for several days. A 20 minute wonder walk gives people benefits for up to a week after. And so it really can have a significant benefit. And you know, what makes a wonder walk a wonder walk? Again, you decide it is. You simply choose to not ruminate on what's going on outside of that walk and you prime yourself to say, I will find something on this walk that will give me a sense of wonder.

• 27:15Speaker 01

  I will look for things that give me a sense of wonder. And that can give significant benefits. And so it really, the additive, small aggregate moments of wonder that we have over time can impact us in a way that I think we really don't appreciate.

• 27:31Mike Carruthers?

  Well, this is such a great topic for conversation because people don't typically talk about it very much. I mean, we all have a sense of what wonder is and we've all experienced it, but we don't talk about it much about how it works and why it's good for you and what it does for you. So I appreciate this. I've been speaking with Monica Parker and the name of her book is The Power of Wonder. And you will find a link to that book at Amazon in the show notes. Thank you, Monica.

• 27:57Speaker 01

  Thanks so much, Mike. It's been wonderful.

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• 29:44Mike Carruthers?

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• 31:14Mike Carruthers?

  I think there's a lot of confusion about money, what it is, how it works. It used to be that you knew you had a dollar because you could hold it in your hand. But today, much of the money we spend and receive, we never see it, we never touch it. Also, we often hear in political arguments that if we don't do something, the federal government will run out of money. But it never seems to run out of money. And what about taxes? You might think that we have taxes to fund the government, but there's more to it than that, as you're about to hear from L. Randall Wray. He is a professor of economics at Bard College and senior scholar at the Levy Economics Institute.

• 31:57Mike Carruthers?

  And he is author of a book called Money for Beginners: An Illustrated Guide. Hi Randall, welcome to Something You Should Know. So, what is money? How do you define money?

• 32:10Speaker 02

  That's the big question that I've been trying to answer in writing for the past 30 years. You know, what is money? So, most people will say, "Oh, well, you know, it's coins, it's paper money, and it's something I use to go buy stuff." Okay? And so that's sort of a functional approach. What do I use when I go buy stuff? Increasingly, you don't use coins or paper money. You flash or you tap a piece of plastic on a reader, and that's how you buy stuff. So, I think that, you know, we need to get away from this notion

• 32:54Speaker 02

  that money is something we can get our hands on. If you go back in time, actually, most market activity, as far back as we go, took place on the basis of credit and debit. And really, that, I think, is how we should look at money. Money is a credit in your hands, and it's somebody's debt. And so I think of money as being a debt, denominated, that is measured, kept track of, in terms of a money of account.

• 33:37Speaker 02

  In the United States, that is the dollar.

• 33:40Mike Carruthers?

  Well, and you're right that money, we think of money as like our money is in the bank, and we could go get it. But if you have a couple hundred thousand dollars in the bank, you can't go down to your local bank and say, "Can I have my money?" They probably don't have that much in that bank.

• 33:57Speaker 02

  Yeah, if you've ever seen the safe door open, you look in there. They couldn't possibly have the money in there. They may have hundreds of millions of dollars of deposits of their customers, and they certainly do not keep that money in the safe.

• 34:18Mike Carruthers?

  So where is it?

• 34:19Speaker 02

  Well, it's neither here nor there. It's electronic entries on a computer hard drive. That's what it is. It's a record of what the bank owes you. That's what your checking account deposit is. It's just a record of what the bank owes you. And when you make a payment to someone, your bank will debit your account and credit the account of whoever is receiving your payment. So it's just a series of credits and debits. It's all accounting.

• 34:56Mike Carruthers?

  So the money that we use, that we trade with each other and we buy things with, is the government's money. Why is it the government's job to make money?

• 35:08Speaker 02

  Well, so I can say a lot about the government's money. But first, you can create money. You can take a piece of paper and write, "I owe you $5." You have just created money. Money is the record of a debt. You have just put yourself in debt. I owe you $5. Now, can you find someone to accept it? If so, you really have created money. And probably your mom would take it. Maybe some of your good friends would take it. So the problem is, for you, the acceptability of your IOU is pretty narrow.

• 35:53Speaker 02

  When a bank writes, "I owe you $5", that's going to be accepted almost everywhere, in part because we've got the government standing behind it in several different ways. Your checking account is the bank's IOU.

• 36:13Speaker 02

  The bank creates this, we could say, out of thin air. It is just a keystroke credit to your deposit account. They can create money.

• 36:26Mike Carruthers?

  So we often hear in politics, people talking about the debt, the country's debt, and that we have too much debt, that the country will run out of money, that we will not be able to pay our bills, and that if we just print more money, then we get inflation, and that we are printing money on the backs of our children because they will have to deal with this debt in the future.

• 36:51Speaker 02

  Yeah, there are three misunderstandings in that statement. First, we cannot run out of money, period. Impossible. Money is a keystroke credit to an account. It's just a credit. It is a keystroke. You cannot run out of keystrokes. As long as there is one person left at the Fed with one finger, they can keystroke some more credits. Okay? So that is just simply false. It's propaganda, really, trying to scare people. We cannot run out of money.

• 37:35Speaker 02

  A bank can't run out of money, and the central bank can't run out of money, the Treasury cannot run out of money. They can always make all payments as they come due. Now, can the government or the private sector spend too much and cause inflation, which will reduce the value of the money? Yes, that can happen. Okay? If we create too much money...

• 38:05Speaker 02

  And spend too much so that we're trying to buy more goods and services than our economy can produce or that we could import, then prices can be pushed up. You can get inflation. So that could be a danger. When we look, say, 10 years into the future, 20 years into the future, we are an aging society. That means we will have relatively more old people on social security compared to young

• 38:46Speaker 02

  people who are workers or children of workers who will become workers. So the question will be, 10, 20, 30 years out in the future, will we be able to produce enough real goods and services to take care of all the retirees, plus the people of working age, plus the children? Now, on all reasonable projections of what we think the nation's productive capacity will be, I can assure you that the estimates are, we will be able to do that.

• 39:26Speaker 02

  We're going to be productive enough to take care of all the young, all the old, and everybody in between. And since we can't run out of money, we'll be able to afford it.

• 39:37Mike Carruthers?

  But every year, when the government spends more money than it makes, there is a deficit, and that deficit gets added to the debt. And doesn't eventually, someday, somehow, somebody have to pay that back?

• 39:52Speaker 02

  There is this great fear that if the US government runs a deficit this year...

• 40:00Speaker 02

  Deficits add to debt. So, over the course of this year, if the government spent 500 billion more than it received in taxes, that will add 500 billion to the national debt, which is somewhere north of 30 trillion dollars right now. We would add 500 billion more. And some people say, "Well, this can't go on forever. You can't have the outstanding debt grow year after year."

• 40:36Speaker 02

  Well, if you look at the past 200 and something years since the founding of the nation, the debt has grown steadily. It has grown faster than GDP, which is our measure of national output. The debt ratio has grown over that period at a rate of 2% per year. It's gone on for over 200 years. The notion that something that has been going on for 200 years can't go on a while longer just boggles the mind. We will be able to grow the debt.

• 41:19Speaker 02

  Now, households and firms, at some point, need to repay their debts. They have finite lifetimes. And hopefully, by the time you die, you're going to pay off your debt. The US government doesn't have a finite lifetime. It has been around for over 200 years, and maybe it'll be around 200 more years. It doesn't actually ever repay the debt. The debt grows year after year. All that happens is that when a bond matures, so if you have a 10-year bond, at the end

• 42:01Speaker 02

  of 10 years, it will mature, and the holder can present it to the government and say, "I want cash." The government will say, "Fine, we'll give you the cash." And then the government will just issue another 10-year bond and sell it to someone else. That's what happens. The debt doesn't get repaid, it gets rolled into new debt. This has been going on for 200 years.

• 42:28Mike Carruthers?

  Well, then, why then? Because I'm having trouble, and I think people have trouble understanding what you're saying. Because let's take money off the table and let's just say that we trade in Mona leases. And there's only one, but we could make more. As you say, the government can make more money. Well, if you make a lot of Mona leases, the value of those Mona leases becomes declines. Because if there's only one, it's really valuable. If there's a million of them, they're not so valuable. So how can you just keep printing money and say that there's no real consequence to that?

• 43:10Speaker 02

  The debt, government's debt, is our asset. Okay? If the government issues a hundred-dollar bond, that will be held in the non-government sector by banks, by household savers, by pension funds, and by private firms that want to hold the safest asset in the world, which is US Treasury bonds. That is the safest asset you can possibly put in your portfolio.

• 43:48Speaker 02

  And you have to remember that if the outstanding debt is 30 trillion, that means we, all of us, taken together, have 30 trillion dollars of the safest asset in the world. We are happy to hold that, and we get to earn interest on it. It doesn't reduce the value of that debt. A hundred-dollar bond will remain worth a hundred dollars, and it will earn interest for us.

• 44:26Mike Carruthers?

  So I get the bond thing that the government's debt is our asset in that way. But very often, the government spends money and says, "We need to raise taxes in order to pay for this." There's no bond involved. It's tax money that comes straight out of my pocket into the government's pocket. That's not my asset.

• 44:48Speaker 02

  Taxes reduce our net income. That is true. And there are times when you want the government to do that.

• 44:57Mike Carruthers?

  No, there isn't. No, there really isn't.

• 45:02Speaker 02

  I don't mean you as an individual. No, nobody likes paying taxes. Okay, that's clear. But what I'm saying is there are times when it is in the national interest to increase taxes. And that is related to your point. That withdraws net income from the non-government sector and reduces inflation pressure. So, for example, let's go back to World War II. We're coming out of the Great Depression. We know that we're going to devote a huge portion of our nation's productive capacity to the war effort.

• 45:47Speaker 02

  It turns out, we devoted 50% of all output went to the war effort. We had to make a transition from a peacetime economy with a very small defense sector, very little military spending, to a massive buildup of our defense sector. And taxes played a very important role in doing that. So we increased taxes, not because the government needs the money. And I can tell you, the government knew this. The purpose of the tax was not to give the government money because the government can always create the money.

• 46:32Speaker 02

  It can't create enough output. We had to reduce private consumption. We needed the tires to go to the military, not to civilian cars. And so we reduced people's take-home pay by increasing taxes. In addition, we said, let's get people to save. Let's promote patriotic saving. Let's sell war bonds. And there was a huge campaign to convince people to buy the war bonds. Now, did the government need to borrow money from households? No, of course not. They knew they didn't need to borrow money. The government can't run out of money.

• 47:17Speaker 02

  What they wanted was households to save instead of spending. So that they didn't compete with the war effort. So you weren't out there buying tires or nylon stockings. You were saving in war bonds. And there were other methods, too. They used wage and price controls. At the end of the war, we're going to ramp down all the production for the war effort. Think of all those factories that were building tanks. Now, we're going to convert those back to civilian use. Now, we want households to spend more.

• 47:59Speaker 02

  So that would be the time to lower taxes and to get people to spend their accumulated savings. So they could cash in their war bonds and start buying consumer goods. That's exactly what we did. So you can use tax increases and tax reductions as a way to first, move resources to the government sector and then, second, move them back into the private sector.

• 48:29Mike Carruthers?

  But my sense is that when taxes go up, they very seldom come down. Federal taxes, state taxes, municipal tax, they never go down.

• 48:41Speaker 02

  Okay, first, I want to make clear. When I was describing government spending, I was talking about the federal government. State and local governments are very different. State and local governments really do need tax revenue in order to spend. State and local governments do not have a central bank to make payments for them. They really do need taxes and they need to borrow in order to spend. And 48 of the states require a balanced budget. So they do not run deficits as a normal operating procedure. And states and counties and cities can go bankrupt.

• 49:24Speaker 02

  It has happened, Orange County went bankrupt. And there are severe consequences. They're in a very different situation than the federal government, which is our currency issuer and cannot run out of US dollars.

• 49:39Mike Carruthers?

  Lastly, what do you see as the future of money?

• 49:43Speaker 02

  Well, the future of money is that it will increasingly be taken electronic form. The, even our paper currency and coins possibly have a very limited future.

• 50:01Mike Carruthers?

  Well, I must say, I've learned a lot in this conversation, things I did not know before, and I always like doing that. It's one of the great things about doing this podcast. I've been speaking with L. Randall Wray. He's a professor of economics at Bard College and senior scholar at the Levy Economics Institute. The name of his book is Money for Beginners: An Illustrated Guide. And there's a link to that book in the show notes. Thank you, Randall, for being here.

• 50:28Speaker 02

  Thanks. It's been a pleasure to be on your show.

• 50:33Mike Carruthers?

  We're all supposed to be getting eight hours of solid sleep every night. That's the general professional consensus. But what about those people who say they do just fine on only five hours of sleep? Well, researchers put them to the test. The volunteer sleepers did their thing in a controlled sleeping environment for two weeks. Those who slept eight or nine hours did just fine on cognitive testing, but the group who slept just four to six hours flunked. Their cognitive skill results were impaired to the equivalent of being legally drunk. The study found that when we get less than eight hours of sleep at night,

• 51:14Mike Carruthers?

  our attention span and reaction times are the first skills to take a hit. Even getting seven hours is not enough. One hour less nightly accumulates over time to a noticeable sleep debt. And that is something you should know. Hey, would you do me a favor? Since the episode is over and perhaps you have a moment, tell a friend about this podcast, ask them to give a listen, and I'll bet they thank you for it. I'm Mike Heruthers. Thanks for listening today to Something You Should Know.

• 51:44Speaker 03

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