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Welfare, created to be a monster by compromise.

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    Carlitos Wrote:
    Chet Ruminski Wrote: The right wing created welfare in the image of a monster so they could say: "look, there's a monster". Welfare should have been means tested and graduated so total income plus welfare would have created a living wage. The right wing wanted a no income qualifier because they knew the hate that would be created by giving people money for not working. The left compromised in order to get the program. Welfare should have been a jobs and training program for pay. The basis should have been child care and child care training. Qualificants would have gotten free child care while they worked at a welfare oriented job. Others would staff the child care facility and learn the job if needed . All welfare recipients would be required to work or get paid training then work. Welfare would then have addressed the problem and offered a solution . Compromise cost more in the long run.

    This is called "workfare" and it's not a part of the progressive agenda.

    We should have a job guarantee, but that doesn't mean we shouldn't have social welfare programs. The old, young, sick, and homeless need to be protected. Furthermore, should the government fail to guarantee a reasonable job opportunity in the public sector to all those able and willing to work, there needs to be a safety net to support those people.

    Forcing poor people to work 'or else no social welfare' and disregarding issues, such as, labor immobility, family-household structures, and the failure of the government to provide reasonable job opportunities in the public sector, could be quite cruel to those on the margins, while making the macro economic problem worse.

    What Conservative Republicans were successful at doing was convincing everyone that their tax dollars paid for welfare, making it a socialistic robbing Peter to pay Paul scheme to redistribute wealth in the society from the haves to have nots. In reality, social welfare helps stabilize corporate profits given the large multipliers associated with it. That's basically what the government counter cyclical policies do, as opposed to stabilizing employment. Taxes regulate inflation; they don't give the government the funds to spend. Hardworking Joe is not paying higher taxes because of the food stamps used by his lazy next door neighbor Bum, but because of Deficit Terrorists in power who don't understand how the currency works.

    Uh, yea that ^
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    Carlitos Wrote:
    Chet Ruminski Wrote:
    lonely bird Wrote:
    Carlitos Wrote:

    You can screw around with the institutional structure all you want. Government deficit still equals the non-government surplus. The funds to pay taxes and/or buy government securities still comes from government spending or lending first. Taxes are still about regulating inflation.

    What non-government surplus would that be?
    Whoever holds the paper on the deficit. I need to be hit hard with a sledge hammer some times to see the light so to get the hammer swinging I would say that Warren Mosler is playing a game. There is nothing new to deficit theory. It was the slogan and criticism of the Democrats "tax and spend". Mosler knows as well as many others that an economy is spending. He is attempting to put it in a less obvious way alluding to deficits. He has to battle all the conservatives that don't give a rat's behind that spending is life to an economy and not spending is death to an economy. The right only wants to defend and protect what they have. They can't see, don't care, hate the idea, would rather die than understand a thriving spending economy benefits everybody. The idea that a kid from across the tracks or from the ghetto could sit next to them on a cruise ship is blasphemy to them. And even if you do get some spending then the conservative right wants it law less so they can steal the best part back, they call it deregulation. So, nothing new, just trying to make it palpable. Close to the turn of 18 to 19 hundreds there were more doctors than you could shake a stick at. To establish, preserve and maintain the Doctor status an organisation was formed to limit and control the number of doctors. That is why there is no protection for college kids, students now owe more than 1.2 Trillion dollars, more than all but the top 7 or 8 economies in the world. Warren knows the solution is regulated spending. He is trying to finesse it in. Of course all I have stated is personal opinion.

    Not sure what your beef is with Mosler. Capitalism runs on Sales. If you want to increase sales, you increase spending. If you want to raise taxes on the savings of rich people and then increase government spending by that amount or transfer those funds to the non-rich to spend, you can do that but you don't have to. It would have the same effect on total spending as simply increasing government spending or transfer payments without seeking revenue from taxes on the savings of rich people.

    Carlitos, You are totally misunderstanding what I am taxing and what purpose I have for taxing it. First and foremost our economy is dying. Second we lost jobs over seas because our consumers lost money that was used for consumption. When our cconsumers had money they shopped quality. The lost money and then shopped price. That created the demand for comparatively cheaper products. Third taxing non jobs producing investing would automatically shift money to jobs producing investments that would receive benefits to encourage money in that direction. Deficits can also be created in business by hiring. The deficit would be labor and the non government surplus would be the wages paid to labor. As the surplus is spent new business and new products will create demand and more deficit and more surplus. Regulations will provide stability and new economists will be algorithms to balance spending to demand avoiding peaks and valleys replacing archaic and wasteful supply and demand. Master's degrees in science will replace arts just like it is in trading.

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    lonely bird Wrote:
    Carlitos Wrote:

    You can screw around with the institutional structure all you want. Government deficit still equals the non-government surplus. The funds to pay taxes and/or buy government securities still comes from government spending or lending first. Taxes are still about regulating inflation.

    What non-government surplus would that be?



    To understand this question your asking you have to understand that when government borrows, truly borrows it borrows ONLY from itself.

    Selling t-secs like bonds, is not a "borrowing" operation.

    First, think of the economy as a bucket and the water in it as a mix of the people, money, commodities and productive capacity. The higher the level of the water the greater the utilization of all of these things. If the bucket overflows then the economy is experiencing inflation.

    So the question is, if the government has to spend money to provision or maintain itself, how can it spend trillions in an economy where the bucket is almost full or full?

    Economists have long understood this problem and taxes and the sale of t-secs was created to deal with the problem.

    If you have a large glass of water you want to add to the bucket, then you get an empty glass of about the same size and remove some water first. As long as the water in the full glass has the same or less water in it, the bucket won't overflow. t-secs are like taking a glass, dipping it in and setting it off to the side, promising to pour it back in at some later time. Ideally before it's put back the capacity of the bucket will have increased.

    Ok, so what does it mean to borrow?

    Well when you go to your friend and ask if you can borrow a dollar, they must have the dollar in order to lend it to you.

    Mathematically it looks like this:

    Your Friend $1
    You $0

    You borrow a dollar

    Your friend -$1 (now $0)
    You +$1 (now $1)

    Notice that in order for you to increase $1 your friend had to go -$1 and the sum of the transaction between you was ALWAYS $1

    In order for government to create $1 who goes -$1? It's tempting to imagine it's the taxpayer or a bond holder, but one need only imagine a hypothetical government that uses a fiat system similar to our own. If it was day one of this new government and it had not created any money yet, who would it take money from? I mean, remember that all government debt and taxes are payable only in the money it creates.

    The answer to the question is; no one. No one has to go -$1 for the government to create a dollar.

    The government borrows dollars from itself.

    It looks like this

    Government creates $1
    The governments account at the Fed goes -$1 (this -$1 exists outside the functional economy).

    Note that the sum of this transaction is ZERO.

    The "debt" is simply an accounting operation.

    Now the government spends the dollar into the private sector...

    So the private sector goes +$1
    The governments account at the Fed is -$1

    The private sector is +$1, that is it's surplus because it does not hold the debt for the creation of that money, the government does. So the private sectors surplus is the governments deficit.

    When the private sector (consumer) borrows from private sector (bank), banks create the money the same way. They create an asset ($1) and a liability (-$1). They introduce the money into the economy via borrowing by consumers.

    Since banks are industries inside the economy and they have the same time constraint as consumers (loans must be repaid on schedule whether the consumer pays or the bank pays), the creation of money by banks ultimately, at a macro level, does not create new money because the sum of the transaction is zero, where government spending creates a positive in the private sector, but the negative is outside the private sector.

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    I hope you'll consider watching my new video, "The Welfare Recipient." It's about racism, welfare, Jackie Robinson, Colin Kaepernick, Donald Trump. You will either love this video or hate it. Please leave your feedback either on here or in the comments! youtube.com/watch?reload=9&v=Rp34ctVIQtU