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

Summary

Episode Summary: "The Transformative Power of Wonder & How Money REALLY Works"

Release Date: May 24, 2025
Podcast: Something You Should Know
Host: Mike Carruthers
Guests: Monica Parker & L. Randall Ray

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1. Introduction to the Episode

In this enlightening episode of "Something You Should Know," host Mike Carruthers delves into two profound topics: the transformative power of wonder and the true nature of money. Through engaging conversations with experts Monica Parker and L. Randall Ray, the episode unpacks how fostering a sense of wonder can enhance our lives and demystifies the complexities of money and its operations within our economy.

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2. The Transformative Power of Wonder

Guest: Monica Parker
Timestamp: 03:20 - 25:52

Monica Parker, a renowned speaker and author of "The Power of Wonder," explores the concept of wonder, its benefits, and how individuals can cultivate it in their daily lives.

a. Defining Wonder

At [05:33], Parker defines wonder as a multifaceted emotional experience:

"Wonder is really connecting the concepts of openness, curiosity, absorption, and awe into a single emotional experience."

She emphasizes that wonder is not just a fleeting emotion but a catalyst that fosters continuous growth and appreciation.

b. Psychological and Physiological Benefits

Monica highlights the profound benefits of experiencing wonder:

"It's an incredibly beneficial emotion, both psychologically and physiologically. It makes us more creative, more desirous of studying the world around us... It lowers our pro-inflammatory cytokines, which are markers of inflammation connected to heart disease and Alzheimer's, and it lowers our blood pressure and cortisol levels."
[07:13]

These benefits illustrate how wonder contributes to better mental and physical health, enhancing overall well-being.

c. Cultivating a Sense of Wonder

Parker discusses practical ways to cultivate wonder:

"If we prime ourselves to find wonder, like saying, 'I'm going to find three things to feel a sense of wonder about today,' our brain commits greater cognitive resources to finding it."
[09:37]

She suggests that making wonder a deliberate practice can rewire our brains to recognize and appreciate the extraordinary in the mundane.

d. Overcoming the Perception of a Less Wonderful World with Age

Addressing the common belief that wonder diminishes with age, Monica counters:

"There is so much to feel a sense of wonder about. We can find it in the quotidian—like a perfect sunrise or a beautiful autumn leaf. It's about the lens through which we choose to see the world."
[08:45]

She encourages adopting a childlike perspective to continually discover new sources of awe and appreciation.

e. Extending the Impact of Wonder

Monica explains how sharing and reflecting on wonder experiences can amplify their benefits:

"Wonder shared is wonder multiplied. Sharing an experience like a double rainbow with someone can help reinforce that sense of awe within ourselves."
[19:20]

She emphasizes that while journaling or sharing can extend the experience, it's ultimately a personal choice how one chooses to immerse in moments of wonder.

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3. How Money REALLY Works

Guest: L. Randall Ray
Timestamp: 29:29 - 48:48

L. Randall Ray, a professor of economics at Bard College and author of "Money for Beginners, An Illustrated Guide," demystifies the concept of money, its creation, and the misconceptions surrounding national debt.

a. Defining Money

At [30:24], Ray redefines money beyond its physical forms:

"Money is really a credit in your hands and somebody's debt. It's a keystroke credit to an account."

He explains that modern money exists primarily as electronic records representing debts, not as tangible assets.

b. Debunking the Myth of Running Out of Money

Addressing common fears about government debt, Ray states:

"We cannot run out of money. Money is a keystroke credit to an account. You cannot run out of keystrokes."
[31:26]

He clarifies that as long as the central bank operates, money creation is perpetual, mitigating fears of insolvency at the governmental level.

c. Understanding Government Debt

Ray elaborates on the nature of government debt:

"The U.S. government can't run out of money. It issues bonds that are held as the safest assets globally. When bonds mature, they are simply replaced by new ones."
[37:52 - 38:07]

He emphasizes that national debt is a continuously rolling obligation, not a debilitating liability.

d. The Role of Taxes and Deficits

While acknowledging that taxes do withdraw net income from individuals, Ray explains their purpose:

"Taxes were used during World War II not because the government needed the money, but to reduce private consumption and support the war effort."
[43:13]

He differentiates between federal and state government financial operations, noting that unlike the federal government, state and local governments require actual tax revenues to fund expenditures.

e. Future of Money

Concluding the discussion, Ray predicts the evolution of money:

"The future of money is that it will increasingly take an electronic form. Even our paper currency and coins possibly have a very limited future."
[47:58]

He foresees a digital transformation in how money is conceived and utilized in daily transactions.

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4. The Importance of Sleep

Guest: Monica Parker
Timestamp: 48:43 - 49:55

In a segment following the discussions on wonder and money, Monica Parker sheds light on the critical role of sleep in cognitive function and overall health.

a. Sleep and Cognitive Performance

Parker emphasizes that:

"Volunteers who slept just four to six hours flunked their cognitive skills, with impairments equivalent to being legally drunk."
[48:58]

She underscores that insufficient sleep directly affects attention spans and reaction times, highlighting the importance of adhering to recommended sleep durations.

b. Accumulation of Sleep Debt

The conversation touches on the cumulative effects of sleep deprivation:

"One hour less nightly accumulates over time to a noticeable sleep debt."
[49:17]

Parker advises that even slight reductions in sleep can have significant long-term impacts on health and cognitive abilities.

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5. Conclusion

Mike Carruthers wraps up the episode by encouraging listeners to share the newfound insights with friends and to engage with the podcast for more enriching content. The episode successfully intertwines the exploration of personal growth through wonder with the intricate workings of money, providing listeners with practical wisdom to enhance both their personal and financial lives.

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Notable Quotes:

• Monica Parker at [07:13]:
  "It makes us more creative, more desirous of studying the world around us... It lowers our pro-inflammatory cytokines... and lowers our blood pressure and cortisol levels."

• L. Randall Ray at [31:26]:
  "We cannot run out of money. Money is a keystroke credit to an account. You cannot run out of keystrokes."

• Monica Parker at [19:20]:
  "Wonder shared is wonder multiplied."

---

This episode serves as a compelling exploration of how embracing wonder can lead to a more fulfilling life and provides a clear, evidence-based understanding of money's role and functionality in our society.

Transcript

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[Mike Carruthers]

Something you should know who came up with the idea for sunglasses and when?

[Monica Parker]

Then finding wonder in the world and.

[Mike Carruthers]

Why it's such a good idea to develop your sense of wonder because it's.

[Monica Parker]

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.

[Mike Carruthers]

Also, can people really get by on.

[Monica Parker]

Four to five hours of sleep and still perform well? And what is money? How does it work? There's a lot of confusion.

[Mike Carruthers]

For example, people think the government might run out of money.

[L. Randall Ray]

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.

[Mike Carruthers]

All this today on something you should know.

[Monica Parker]

I know a lot of business people listen to this podcast because I hear from them on LinkedIn or in emails. And if you're one of those people, there always comes that day when you have to hire someone, which I've had to do as well. And it's tough. Usually you need someone right away. You want to hire the right person. But how do you determine that? Which is why I've come to discover that when it comes to hiring, it Indeed is all you need. Indeed has something called Sponsored Jobs. With Sponsored Jobs, your post jumps right to the top of the page for your relevant candidates so you can reach the people you want faster. And it makes a huge difference. According to Indeed data, Sponsored Jobs posted directly on indeed have 45% more applications than non sponsored Jobs. And that's what you want. More applications from relevant, qualified candidates. Indeed works. In fact, in the minute I've been Talking to you, 23 hires were made on Indeed, according to Indeed data worldwide. Look, there's no need to wait any longer. Speed up your hiring right now with Indeed and listeners of this show will get a $75 sponsored job credit to get your jobs more visibility@ Indeed.com something just go to Indeed.com something right now and support our show by saying you heard about Indeed on this podcast. Indeed.com something terms and conditions apply. Hiring Indeed is all you need something you should know, fascinating intel, the world's top experts, and practical advice you can use in your life today. Something you should Know with Mike Carruthers.

[Mike Carruthers]

Hi.

[Monica Parker]

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. 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 grand 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. 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. Hi, Monica. Welcome to Something youg Should Know.

Hi, Mike. Thanks so much for having me.

So what is wonder?

[Mike Carruthers]

How do you define it from your perspective?

[Monica Parker]

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 Time we experience one of these components, the more likely we are to experience them in the future.

[Mike Carruthers]

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

[Monica Parker]

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

[Mike 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 at Disneyland, a child sees Mickey Mouse and gets up close to him. Then that look on the. That.

[Monica Parker]

To me, that's wonder.

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. Wonderful.

[Mike 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.

[Monica Parker]

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.

[Mike 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.

[Monica Parker]

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 we'll 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.

[Mike 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.

[Monica Parker]

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 emotion, 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, that neuroplasticity where we start to feel pro social 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 start to feel that sense of wonder.

[Mike Carruthers]

Okay, but in a very practical way, you are 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?

[Monica Parker]

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

[Mike Carruthers]

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

[Monica Parker]

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 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 explore in our own minds the cognitive elements or the intellectual elements of what we're experiencing. But really, probably one of the key pieces is that smallness.

[Mike Carruthers]

But what is the. I mean, I know you mentioned about the benefits of doing this, but say, for example, because I saw this the other day, you look at like a double rainbow and it is just incredible to see it's so big and yes, you feel so small compared to this thing 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, and wow, it's wonderful. But so what. I mean, you know, now it's gone and you know, now I've got to go pay the bills.

[Monica Parker]

Sure. And I, you know, there's an expression that says after the ecstasy, the laundry. There's no question 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 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 you would have that experience, additional experience once again. And so there are ways that we can extend that experience or magnify it. And there absolutely is research that shows that wonder shared is wonder multiplied.

Because it seems like if I have.

[Mike Carruthers]

To now start journaling about my rainbow, 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 going to have to write a paper about it, it seems less wonderful.

[Monica Parker]

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 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.

We're talking about your sense of wonder.

[Mike Carruthers]

And all the benefits of developing that sense.

[Monica Parker]

And we're talking with Monica Parker. She is author of the book the Power of Wonder. I am definitely not a big clothes shopper and probably like you, I've bought clothes online that were disappointing. But I have a very different experience with Quince and I've come to find out that so many people I know shop Quince. So far I've gotten a couple of shirts and sweaters from Quince and well, you'll know what I mean when I say this. Every time I get something new from Quince, it goes right to the top of the rotation. My Quince clothes are my go to clothes. If you don't know Quince, you are going to love their website. Quint's has all the things you actually want to wear, like organic cotton silk polos like the ones I have, European linen beach shorts, pants for every occasion, really nice pants. And here is the very best part. Everything at Quint's is priced 50 to 80% less than what you'd find at similar brands. You see, by working directly with top artisans and cutting out the middlemen, Quince gives you luxury pieces without those big markups. I've really been amazed at how many people tell me they shop at Quint's. It's become like the place to go to buy clothes. Elevate your closet with quince. Go to quince.comsysk for free shipping on your order and 365 day returns. That's Q-U-I-N-C-E.comSYSK to get free shipping and 365 day returns. Quince.comSYSK you chose to hit play on this podcast today.

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[Mike Carruthers]

So Monica, one of the things about Wonder that I really enjoy is not only it's not just the thing that everybody's oohing and ahhing about, it's watching the people ooh and ah. 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, 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.

[Monica Parker]

And you've just perfectly encapsulated how wonder shared is. Wonder multiplied. 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 examp 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. And discovery can be shared. And it has an impact then that is greater than the sum of its parts.

[Mike 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. And if you see wonder in everything, then you're not seeing wonder in anything because it's all wonderful.

[Monica Parker]

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 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.

Has there been any research?

[Mike Carruthers]

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 because it has to be more deliberate because you. Things are fewer, things are new and exciting. And, and, and is that true?

[Monica Parker]

I mean, 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 qu. 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 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.

[Mike Carruthers]

Generally, I think when people think of.

[Monica Parker]

Wonder, they think of it in a very positive way.

[Mike Carruthers]

But it seems like you can find wonder in negative situations, sad situations.

[Monica Parker]

It's not all positive and wonderful. You can find wonder in the bad, too.

And 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. 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 chemo diversity. It means that we have a better port portfolio of emotions to access, and that's really helpful for us. 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.

At the very beginning of our conversation.

[Mike Carruthers]

You said that there are some real benefits to finding wonder in life, health benefits.

[Monica Parker]

So how much wonder do you have to find?

[Mike Carruthers]

How much wonder do you have to see to get those benefits?

[Monica Parker]

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 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. 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.

[Mike Carruthers]

Well, this is such a great topic for conversation because people don't typically talk.

[Monica Parker]

About it very much. I mean, we all have a sense of what wonder is and we've all.

[Mike Carruthers]

Experienced it, but we don't talk about.

[Monica Parker]

It much about how it works and.

[Mike Carruthers]

And why it's good for you and what it does for you.

[Monica Parker]

So I appreciate this. I've been speaking with Monica Parker and the name of her book is the.

[Mike Carruthers]

Power of Wonder and you will find a link to that book at Amazon in the show notes. Thank you Monica.

[Monica Parker]

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

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[Mike Carruthers]

I think there's a.

[Monica Parker]

Lot of confusion about money, what it.

[Mike Carruthers]

Is, how it works.

[Monica Parker]

It used to be that you knew you had a dollar because you could hold it in your hand.

[Mike Carruthers]

But today, much of the money we.

[Monica Parker]

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 Ray. He is a professor of economics at Bard College and senior scholar at the Levi Economics Institute. 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?

[L. Randall Ray]

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 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 in the United States, that is the dollar.

[Mike 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.

[L. Randall Ray]

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.

[Mike Carruthers]

So where is it?

[L. Randall Ray]

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.

[Monica Parker]

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?

[L. Randall Ray]

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. When a bank writes IOU, $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. 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.

[Monica Parker]

So we often hear in politics, people talking about the debt, the country's debt.

[Mike Carruthers]

And that we have too much debt.

[Monica Parker]

That the country will run out of money, that we will not be able.

[Mike Carruthers]

To pay our bills, and. 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.

[L. Randall Ray]

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. 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 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 people who are workers or children of workers who. 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. 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.

[Monica Parker]

But every year when the government spends.

[Mike Carruthers]

More money than it makes, there is a deficit. And that deficit gets added to the.

[Monica Parker]

Debt and doesn't eventually, someday, somehow somebody.

[Mike Carruthers]

Have to pay that back.

[L. Randall Ray]

There is this great fear that if the U.S. government runs a deficit this year, 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 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. 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, 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. 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 of 10 years it will mature and the holder can present it to the government and say, I want cash. 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.

[Mike 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 Lisas 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 Lisas 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?

[L. Randall Ray]

The debt, government's debt is our asset. Okay? If the government issues $100 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 U.S. treasury bonds, that is the safest asset you can possibly put in your portfolio. And you have to remember that if the outstanding debt is 30 trillion, that means we all of us taken together have $30 trillion of the safest asset in the world. We are happy to hold that and we get to earn interest on doesn't reduce the value of that debt. A hundred dollar bond will remain worth $100 and it will earn interest for us.

[Mike 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.

[L. Randall Ray]

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

[Monica Parker]

No, there really isn't.

[L. Randall Ray]

I don't mean you as an individual. 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. It turns out we devoted 50% of all output went to the war effort. We had to make a transition from a peace time 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. 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. 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. 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.

[Monica Parker]

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

[L. Randall Ray]

Okay, we 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. 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.

[Monica Parker]

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

[L. Randall Ray]

Well, the future of money is that it will increasingly take an electronic form. Even our paper currency and coins possibly have a very limited future.

[Monica Parker]

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 Ray. He's a professor of economics at Bard College and senior scholar at The Levi 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.

[L. Randall Ray]

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

[Monica Parker]

We're all supposed to be getting eight hours of solid sleep every night. That's the general professional consensus.

[Mike Carruthers]

But what about those people who say.

[Monica Parker]

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.

[Mike Carruthers]

But the group who slept just four.

[Monica Parker]

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.

[Mike Carruthers]

Night, our attention span and reaction times.

[Monica Parker]

Are the first skills to take a hit.

[Mike Carruthers]

Even getting seven hours is not enough.

[Monica Parker]

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.

[Mike Carruthers]

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 Carruthers.

[Monica Parker]

Thanks for listening today to something you should know.

[Amy Nicholson]

I'm Amy Nicholson, the film critic for the LA Times.

[Paul Scheer]

And I'm Paul Scheer, an actor, writer and director. You might know me from the League, Veep, or my non eligible for Academy Award role in Twisters.

[Amy Nicholson]

We love movies and we come at them from different perspectives.

[Paul Scheer]

Yeah, like Amy thinks that, you know, Joe Pesci was miscast in Goodfellas and I don't.

[Monica Parker]

He's too old.

[Amy Nicholson]

Let's not forget that Paul thinks that dude too is overrated.

[Paul Scheer]

It is.

[Amy Nicholson]

Anyway, despite this, we come together to host Unspooled, a podcast where we talk about good movies, critical hits, fan favorites.

[Paul Scheer]

Must sees, and in case you missed.

[Amy Nicholson]

Ems, we're talking the Home Alone from.

[Paul Scheer]

Grease to the Dark Knight.

[Amy Nicholson]

We've done deep dives on popcorn flicks. We've talked about why Independence Day deserves a second look.

[Paul Scheer]

And we've talked about horror movies, some that you've never even heard of, like Ganja and Hess.

[Amy Nicholson]

So if you love movies like we do, come along on our cinematic adventure.

[Paul Scheer]

Listen to Unspooled wherever you get your podcasts.

[Amy Nicholson]

And don't forget to hit the follow button.

[Sarah Gabrielli]

From the podcast that brought you to each of the last lesbian bars in the country and back in time through the Sapphic history that shaped them comes a brand new season of Cruising beyond the Bar. This is your host, Sarah Gabrielli, and I've spent the past year interviewing history making lesbians and queer folks about all kinds of queer spaces, from bookstores to farms to line dancing and much more.

[L. Randall Ray]

For 11 years, every night women slept.

[Monica Parker]

Illegally on the Common. We would move down to the West Indies to form a lesbian nation. Meg Kristen coined the phrase women's music.

[L. Randall Ray]

But she would have liked, say it was lesbian music. And that's kind of the origins of the combo Huber Collective.

[Sarah Gabrielli]

You can listen to Cruising on Apple Podcasts, Spotify, or wherever you get your podcasts. New episodes air every other Tuesday, starting February 4th.