https://www.bloomberg.com/amp/news/articles/2019-05-09/house-republicans-say-democrats-should-answer-for-mmt-in-hearing?__twitter_impression=true&fbclid=IwAR3J3uPbiu7N_cn83uZfpvxDC2t3-SGaqhXoJeJbH4wixVD7_Uq4Mn5ggwg

Republicans on the House Budget Committee want an MMT debate with Democrats.

All House Democrats need to do is play the video of Alan Greenspan telling Paul Ryan that the government can create unlimited dollars and the real problem is creating real assets (which implies that inflation is the limit).
Secondly, they can remind the Republicans and explain to the American people that the origins of MMT begin in a steam room with Donald Rumsfeld and the publishing support of Art Laffer. The Democrats should absolutely call on Warren Mosler and Stephanie Kelton to testify. MMT is a general theory about how the monetary system works. It is not a socialist plot. It does arrive at the conclusion that an employed buffer stock of labor is better than an unemployed buffer stock of labor. And employed or unemployed, the buffer stock of labor is a part of the size of government.

First, don’t ask where the $ will come from for any Congressional spending.

They all come from keystrokes on computers at the US Treasury that send instructions to computers at the Federal Reserve to mark up accounts in the banking system.

The real question is where will the resources come from to be deployed by that spending.

I’ve got a 19 month old which probably influences my calculus. I’ve read and reread all of his text files. I just don’t think you get to be president after writing something like that, or shouldn’t be. Most of the Beto people I know in Texas are unmoved and point to Trump. But the Democratic Party is supposed to have higher standards than Trump. I don’t think Beto meets that standard knowing what we know now.

This shit about Beto as a teenager writing a psychotic horror fantasy about murdering children by running them over with a car is disqualifying.

I get that we all did things that we regret when we were kids but this is a bridge too far for me.

I might be able to excuse this for a lower level office but not the Presidency.

It’s too unsettling morally and emotionally despite whatever rationale or reasoning that excuses it as the errors of a wayward youth on his way to becoming presidential timber.

It will be used as a powerful weapon against the Democrats if he were to become President. The golden boy is American psycho.

Further, it raises questions about what else is there? We knew about the DUI, rock music and skateboards, and weed. We’ve heard the whispers about shady business dealings by his father or family. Now this? Hard to believe there’s nothing else. Cloud of suspicion hangs over him.

And how did the media find this out? Why didn’t he have this scrubbed?

Beto 2020 blew up right off the launch pad.

I cry no tears for him.

I think he has that Democratic philosopher-king vibe but his resume seems very thin. I voted for him against Cruz.

The main benefit of Beto is how it could change the electoral map if he turns Texas blue. That means death to the Republicans in 2020 and beyond.

But Democrats need major GOTV efforts in Texas to make that happen and capitalize down ticket. Beto alone doesn’t do that.

Schmidt Wrote:

As far as costs go, when you add maybe 30 million currently uninsured, eliminate all deductibles, co-pays and fees, and then include such things as free eyecare, free dentists, free podiatry, free long term care, and free abortions (no Hyde Amendment), free just about everything, then costs go way up.

The crux of the thing is what costs are you talking about? Real or financial? Per unit prices or total prices paid (total spending or total costs of production)? And what prices?......in healthcare or the general economy?

To be absolutely clear, I'm not making fun or trying to be argumentative. I'm just thinking things through from my POV, i.e. MFA would be a deflationary event.

Medicare is going to fix healthcare prices paid under MFA for better or worse. Healthcare prices are going to be "administered" by the government subject to its revision. So the inflationary impact from expanding healthcare output is the real resources that get diverted as result of healthcare from other uses in the economy (leading to shortages in non-healthcare goods and services, driving up their prices). That diversion comes from not just the real resource input costs of healthcare delivery but also the consumption of non-healthcare goods and services by healthcare suppliers.

Cost savings come from getting rid of all the associated costs of the private insurance companies. No need for them because everyone is insured. The money in the Medicare Trust Fund will also be rolled into the new Trust Fund that collects all revenue from the various taxes to fund the program. The Medicare Trust fund will jump start the program.

Under current law, Medicare Part B and D have no solvency risks because shortfalls are fully funded by the U.S. Treasury.

We need to do the same with every Trust Fund, including Social Security and Medicare parts A and C (if we are to have Trust Funds at all).

And there will be also cost savings by reduced salaries and fees from hospital, doctors, nurses, and other care givers whose salaries and fees will be tightly controlled by the government. No more private entities making big profits. These fees are already set by Medicare, but the problem is right now is it is difficult to find a doctor that serves Medicare patients. Some take a small percentage of Medicare and Medicaid patients, but it is the employer based plans that make them the big profits and why they choose to stay in business. How many doctors, nurses, and such choose to remain in the system if their fees for service are reduced to Medicare type rates?

My bigger concern with MFA is the idea of maximum pay structures. That could kill 1099 staffing of physicians and nurses.

the corporate tax is a pass thru regressive tax paid by consumers and/or labor, not capital - this is taught in the mainstream textbooks

the financial transactions tax is said to be needed to curb speculation and high frequency trades, why not just make those sort of things illegal?

I think the tax abatement thing is just one of the issues activists have with Amazon. Labor conditions, compensations, gentrification, and responsible corporate behavior are all part of their complaints. The tax abatement/incentives thing is a problem, and the U.S. Congress is the only thing that can stop the race to bottom among local/state govts.

also, I’ve seen a chart recently that Sanders put out that showed the costs of his spending initiatives vs revenue raised by his proposed tax increases. I didn’t add it all up but eyeball math indicated they were close to matching but not quite.

In any event, Sanders knows better and needs to stop with the public deficit terrorism while recognizing MMT in private. In that sense, he’s kind of like you in that he’s too afraid to ‘go there’ fearing it will go over the heads of voters. But he ends up complaining about deficits while simultaneously proposing additional deficit spending. He just needs to let Stephanie Kelton run point, let her be the policy clearinghouse, and then get her message out there.

MFA is going to be a deflationary event without taxes added. It is an offset. People demanding additional offsets are calling for austerity! MFA might cause a financial crisis. We are talking about destroying trillions and trillions in balance sheet wealth and future earnings of a large sector of the economy. Meanwhile, everything produced in the U.S. will be cheaper to make because healthcare would not be a cost of production for businesses. Presumably, we would have a healthier workforce and society with all sorts of positive externalities and 2nd and 3rd order effects that make our economy more efficient. Yes, if healthcare is free to people, that’s like a tax cut. But we know some of the ‘tax cut’ will be saved. And the inflationary pressure would have to be as large as the deflationary effects just get back to neutral. Meanwhile, the inflationary ‘tax cut’ effect would be delayed over time; whereas, the deflationary effects begin on day one. So I think MFA legislation needs to be accompanied by a payroll tax holiday.

I stand by this logic and it’s more thought out than calls for deficit neutral MFA. I could be wrong about the need for such a large tax cut but at a minimum much smaller tax increases are needed than currently suggested.

Nobody has modeled the need for offsets (positive or negative) for price stability purposes. Everything is about revenue and deficit neutrality (and these sorts of forecasts are notoriously unreliable and wrong - see the CBO’s predictative track record).

Schmidt,

We shouldn’t want to turn the Democratic Party into the Green Party or Occupy Wall Street if we want professional results. But Zakaria is kidding himself if he thinks the agenda he has laid out is going to drive people to the polls.

I like what he said about taxes. The compliance and enforcement costs of taxes is enormous and diverts tons of resources and is varely rarely considered. When judging a tax it’s all about what the tax does to taxpayer behavior and not the revenue raised. The perfect tax raises no revenue but changes tax payer behavior exactly as policy makers desired.