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CNBC perspective on the economy and G20 summit

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  • Schmidt
    2016-08-29 07:36:14 AM
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    CNBC has an Oped on what actions the G20 countries should take at their summit in Hangzhou, China, on September 4-5.

    MSN Money, August 29, 2016: Op-Ed: US must deal with the free-loading countries sucking its economy dry

    CNBC states that those governments running external surpluses, balanced public sector accounts and stable prices should stimulate their domestic demand. The worst offenders are China and Germany. Perennial surplus countries they say are responsible for creating an unstable and unbalanced world economy. Furthermore, with respect to German policies on the USA:

    "German policies are also shrinking the markets for 22.5 percent of U.S. exports. In the first half of this year, America's trade deficit with Europe was running at an annual rate of $156.4 billion, or 22 percent of the total trade gap. Nearly half of that was accounted for by the U.S. trade deficit with Germany."

    I understand trade unions opposition to trade with China. They cite cheap labor, currency manipulation, and a poor environmental record. What do they say about our trade deficit with Germany?

    With respect to the USA, they say, "rearrangements of national priorities will be required to keep the budget deficit and the gross national debt around 4 percent and 114 percent of GDP respectively." Those priorities will be better spelled out after the election. We kind of know what Hillary Clinton will do. Trump's policies leave a lot of guess work.

    There is more in the article. I call attention to it because of the G20 meeting in China. I don't know how all this fits with the MMT philosophy.
  • Chet Ruminski
    2016-08-29 08:14:18 AM
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    CFMA represents money not working. I'll never forget when Rush Limbaugh was talking about lucrative Auto Worker pension plans and he said "people should not get paid for not working". That is what the CFMA does, let's money make money without producing a product for sale. Bubble !!!
  • Chet Ruminski
    2016-08-29 08:18:31 AM
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    "I don't know how all this fits with the MMT philosophy."

    Schmidt, Remember that MMT is descriptive, not prescriptive.

  • Carlitos
    2016-08-29 09:09:02 PM
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    Schmidt Wrote:

    CNBC has an Oped on what actions the G20 countries should take at their summit in Hangzhou, China, on September 4-5.

    MSN Money, August 29, 2016: Op-Ed: US must deal with the free-loading countries sucking its economy dry

    CNBC states that those governments running external surpluses, balanced public sector accounts and stable prices should stimulate their domestic demand. The worst offenders are China and Germany. Perennial surplus countries they say are responsible for creating an unstable and unbalanced world economy. Furthermore, with respect to German policies on the USA:

    "German policies are also shrinking the markets for 22.5 percent of U.S. exports. In the first half of this year, America's trade deficit with Europe was running at an annual rate of $156.4 billion, or 22 percent of the total trade gap. Nearly half of that was accounted for by the U.S. trade deficit with Germany."

    I understand trade unions opposition to trade with China. They cite cheap labor, currency manipulation, and a poor environmental record. What do they say about our trade deficit with Germany?

    With respect to the USA, they say, "rearrangements of national priorities will be required to keep the budget deficit and the gross national debt around 4 percent and 114 percent of GDP respectively." Those priorities will be better spelled out after the election. We kind of know what Hillary Clinton will do. Trump's policies leave a lot of guess work.

    There is more in the article. I call attention to it because of the G20 meeting in China. I don't know how all this fits with the MMT philosophy.

    Hi Schmidt,

    The article and the ideas expressed are all ass backwards.

    What the U.S. should do is balance the national economy with a Job Guarantee, let the government deficit float as a residual, and encourage imports.

    Imports create fiscal space for lower taxes or more government spending.

    Economics is the opposite of religion: it is better to receive than to give.

    We should be giving awards to exporters to the U.S.

    The only restraints I would place would be for moral, political, or national defense reasons.

    The idea that foreigners working to send us their real stuff so they can save our currency are free-loaders sucking us dry is absolute, convoluted nonsense.

    We are letting imports unemploy our people, when we could easily lower taxes or ramp up government spending to replenish the loss of incomes from the foreign demand leakages. It's not China's or Germany's fault we don't maintain domestic employment at full employment levels.
  • Chet Ruminski
    2016-08-29 10:40:59 PM
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    "It's not China's or Germany's fault we don't maintain domestic employment at full employment levels."

    Create goods and services to sell. Without a doubt that is the consenus of logical analytical minds. The execution is either excused by elitism or prevented by realism. In any case it is unattainable as long as working people are blamed and accept the blame.
  • Carlitos
    2016-08-30 12:46:22 AM
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    Chet Ruminski Wrote:

    "It's not China's or Germany's fault we don't maintain domestic employment at full employment levels."

    Create goods and services to sell. Without a doubt that is the consenus of logical analytical minds. The execution is either excused by elitism or prevented by realism. In any case it is unattainable as long as working people are blamed and accept the blame.

    There is no shortage of core consumer goods or services in the U.S. economy. There is an ability to purchase what is and/or can be produced problem. The easy solution is cutting taxes and/or government spending increases so businesses and households have more income to spend. We have a capacity utilization problem.

    If we are going to cut taxes, it's better to start by cutting regressive taxes and reducing the tax burden of low income tax payers who have the highest propensity to spend.

    We need more fundamental change, etc. But immediate relief is possible with some combination or isolation of tax cuts and/or government spending increases. We need a JG to solve the unemployment problem permanently, but we can still do better than we are doing today, and it's hard to do worse.

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