I have been working today on the modern monetary theory text-book that Randy Wray and I are planning to complete in the coming year (earlier than later hopefully). It just happens that I was up to a section on what economists call the balanced-budget multiplier which is a way to provide stimulus without running a deficit when I read an article in the New York Times (December 25, 2010) by Robert Shiller – Stimulus, Without More Debt. I also received a number of E-mails asking me to explain the NYT article in lay-person’s language. So a serendipitous coming together of what I have been working on and some requirement for explanation and MMT interpretation. So what is the balanced-budget multiplier?