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  • Nov 05, 2019 11:44 AM
    Last: 12d
    87
    And I’m all in favor of compromise.
    but Congress needs to do inflation analysis of their fiscal policies. They are looking at it 100% from a budget perspective as if they are not the monopolist of the dollar.
    had that view prevailed in WW2 we would be speaking German. Or in Great Depression era the govt would have been overthrown.
  • Nov 05, 2019 11:44 AM
    Last: 12d
    87
    She pledged to maintain Pay-go under next Democratic President. Same interview where was talking about financial cost of MFA etc
  • Nov 05, 2019 11:44 AM
    Last: 12d
    87

    Hey Schmidt

    I am trying to be respectful/helpful but I was alarmed by her recent comments.
    To answer your question, the Fed is like the kid in the back seat of a car with a fake steering wheel, while Congress is in the driver’s seat driving the car.
    I like to say that the Fed sets the base inflation rate, which is the fed funds rate which when annualized closely tracks with 1 yr treasuries. This inflation has nothing to do with shortages.
    Now, the Fed has it all backwards because they ignore the interest income channel and forward pricing. So when they lower rates to raise inflation, they are doing the opposite and vice versa.
    But let’s get to my point:

    Congress can tax the wealthy and do big spending programs and the CBO could score it budget neutral. But if they are taxing those with the highest propensity to save, then they are not “freeing up” resources for the “big spending.” If there is a shortage due to govt competing with the private sector for resources, prices go up unless govt cancels the spending.
    If they had scored for inflation, they would know that the taxes need to be different or some other structural/macro prudential policy is in order if the resulting inflation is undesirable/unacceptable.
    Note, scoring for inflation is not my original idea, it’s been heavily promoted by academic MMTers. I’m just regurgitating.





  • Nov 05, 2019 11:44 AM
    Last: 12d
    87
    Honorable Madam Speaker Pelosi,
    The facts have led us to the conclusion that your chamber should target inflation rather than budget balance outcomes. Obama proved that deficits do not cause interest rates to rise or inflation and that the govt cannot run out of US dollars as it is the monopolist supplier of them. Trump has only added confirmation of these facts. There is no intellectual or factual basis for “pay-go” rules, and it is dangerous to operate your chamber’s “power of the purse” based on unfounded fears and myths steeped in ignorance. The times, as you say, have found us and demand the partnership of a progressive citizenry and progressive government to make a new the promise of America as you lead us out of the dark age of Trump. Please reconsider your pledge to knee-cap the next Democratic President with mindless austerity conditions via “pay-go.” Instead, direct your chamber to have legislation scored for inflation and make fiscal adjustments as is appropriate for public purpose.
    Sincerely
    MMT Democrats
  • Oct 03, 2016 09:58 AM
    Last: 22d
    1.5k

    When you pay federal taxes, you are not paying for the federal govt to get the funds it needs in order to spend. In reality, and as is clear from a closer look at the order of operations, the tax is about altering your behavior, as you can’t spend or save those funds, and you had to do something to get the dollars to pay the tax.
    I know it sounds cryptic and there’s a lot to unpack with what I’m saying. But the overall point is that something very different from the “taxpayer” supplying the funds for the government to spend is going on. So it’s not about you paying taxes to pay for other people’s food stamps. That’s not how it does or how it even could work.

    All dollars are either spent or lent into the economy first by the federal government or its agents. Then, after incomes are received, taxes or debts owed to the federal govt can be paid, and/or debts owed by the federal govt can be purchased (and local/state govt can then tax/borrow and then spend).

    Remember, the tax is about altering your behavior. The point is not the revenue. Revenue is not the goal of the tax.

    Corporations are invariably creatures of the state, and like the govt that created them, they should be LIMITED to public purpose.





  • Jul 20, 2019 05:06 PM
    Last: 4mo
    185

    UBI is inherently inflationary.

    But not all basic or non basic income schemes are bad or disruptive, especially when limited in nature, e.g. social security for disabled or retired or meager benefits for unemployed.

    Criticism of a job guarantee on the lines that it would be ‘make work’ could just as easily be applied to all government employment, as that’s what many anti-gov right-wingers claim now. The WPA and CCC programs during the Depression were not thought of as ‘make work.’ Those folks worked their tails off.

    But the point of the MMT JG is not the work done per se but that the workers ‘transition’ to ‘normal’ employment. That’s how it’s anti inflationary bias works. So while we want to see tangible gains for society from the work done, that’s an add-on benefit. The point is to get people back in the private sector.

  • Jul 20, 2019 05:06 PM
    Last: 4mo
    185
    Most non disruptive way to raise the minimum wage would be a Job Guarantee as it immediately adds to sales creating market forces that support the private sector’s higher wage bill. You still need a statutory minimum wage bc you want to be able to prosecute abusers and can’t assume the JG will catch all workers (although it is supposed to do that).
  • Apr 23, 2018 10:51 PM
    Last: 3mo
    39k

    Once one recognizes that the involuntary unemployed are part of the size of government, the JG becomes the limited government thing to do.

  • Apr 23, 2018 10:51 PM
    Last: 3mo
    39k

    I’m not look at the politics of it.

    The time to set this program up is when unemployment is low.

    The official U3 bls rate undercounts true unemployment.

    Monthly employment data continues to show a significant portion of those taking jobs didn’t show up in U3 the day before.

  • May 09, 2019 01:30 AM
    Last: 7mo
    94

    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.