Yesterday, POLITICO reported that “Democrats are launching a tax-focused group as their newest messaging megaphone in an attempt to counter President Donald Trump on one of his signature issues.”
I am pleased that you ask what Ds can do to limit the damage Rs will do to the American people, rather than what Ds can do to best score partisan points. Unfortunately, I fear that this will fall on deaf ears.
Victor Hugo Paraphrase To Use When Presenting To A Politician
If there is one thing all of the campaign financial donors of the world cannot resist, it is a new monetary paradigm that immediately doubles every person's purchasing power with a single policy. Steve Hummel 02/01/2025
In other words, we don't have a deficit if we have a nuclear aircraft carrier (or some other asset) to show for the spending. So-called entitlements such as Social Security are in fact covered by taxes, so they never create a deficit. So it's the discretionary part that creates deficits, things like repairing bridges or sending weapons to Ukraine. It's what we actually do with the money that is the bone of contention, not the possible deficit, which is simply an accounting entry. Is that it?
What is a deficit? Every dollar created and spent into the economy is a deficit for the government, but it’s adding wealth to the economy. Those dollars are the money We The People live on. The “federal deficit” is nothing more than an accounting identity for government bookkeeping.
Way too few dollars are getting into the bottom of the economy. Way too many dollars are going to the top of the economy. That’s the problem that needs to be solved.
not quite. Roosevelt understood that if you make "the rich" pay for it they would destroy it. SS can continue to be paid for entirely by the workers who get the benefits by raising the payroll tax one tenth of one percent per year for a few years while real wages are going up one full percent per year.
Raising the capital alone only defers the SS insolvency issue as the benefit amount rises as well. If this relationship I'd broken and benefit amount is capped it then becomes a welfare program and a target for the rich.
Raising the cap along with small incremental increases to payroll taxes plus slowly increase age to qualify is the long term solution.
all SS needs is a one tenth of one percent raise in the payroll tax. Raising the cap turns SS into welfare..what Roosevelt warned us against. Raising the retirement age amounts to murder. If people pay for their own Social Security why should someone else be able to tell them when they can retire?
Raising the cap does not turn the program into welfare as the benefit amount also increases as the rules are written today. Limiting the benefit amount while raising the cap is indeed welfare.
No one is telling anyone when they can retire as my wife and I both retired prior to age 62 but SS is an insurance trust account and all insurance has rules regarding what qualification must be met prior to claiming benefits. FRA used to be age 65 and it is now age 67 and the SS program rules have changed multiple time since inception and people are living longer so it only makes sense to for the program to adapt to that reality if self funding is to stay in place.
it is important to realize that "social security is covered by taxes" means that Social Security is paid for entirely by the workers themselves who will get the benefits through the FICA "payroll "tax" which is really a way for ordiary workers to save their own money and pay for insurance aginst poverty in old age or disability. it has nothing to with the federal budget. saying that SS is a "driver of the deficit" is simply a lie intended to fool the ignorant...which appears to include almost all Congress members, Presidents, pundits and reporters. The "non partisan experts" are in fact highly paid expert liars.
taxing the rich has always been the answer. How is that going for you? The rich don't want to pay for your needs any more than you want to pay for the needs of the homeless people you see on the streets. I think if we can learn how to talk seriously and honestly and accurately we might be able to strike a bargain with "the rich" so they see the advantage to themselves of paying more taxes for a stronger and richer country, and we pay for our own needs as much as we can. Social Security is not a welfare program, but a mandatory savings and insurance plan. mandatory because people are not smart enough to pay for it if they don't have to. But it is the best thing out there that keeps them out of poverty.
For what it is worth: the rich already pay their fair share for Social Security if you mean by fair that they get what they pay for, they pay for what they get. Also the rich pay by far most of the taxes in this country. Demanding they pay for more is a loser politically. And no, I am not a shill for the rich. I just believe that we do better if we bargain like grownups.
stewart, if you are serious, start by telling the people that SS has nothing to do with the deficit, and it can be paid for forever jus by raising the payroll about one dollar per week per year. fuller facts and proof upon request. saving SS would likely open the chances for political victories that would solve the health care problem. a good beginning.
The issue that the general populace cares about is inflation. Hence, end inflation forever by implementing the two 50% price reduction and debt jubilee policies I suggest at retail sale and point of loan signing, and tax any increase in final costs that is a fraud at a rate of 100%...and proceed to a liberal progressive political coalition greater than The New Deal.
A few days ago, walking in my nice middle-class (small houses start at $1 mil and go up) neighborhood, someone had spray-painted a dumpster outside the coffeeshop: Kill the Billionaires! No one was rushing to remove it. Smaller graffiti and tiny sticky posts appear on crossing signals and lamp posts: Eat the Rich, Kill the Rich, etc. Seems like there could be a ground-swell for: Tax the Rich. But, I don't hold my breath waiting for the Dems to latch onto this meme.
even the Dems are not that stupid. "kill the rich" is exactly why the rich fear the poor and fight to maintain their control over the government. try to be less greedy than they are . i think paying an extra dollar per week for our own Social Security would be a good place to start.
I did not suggest that the Dems espouse a 'kill the rich' agenda, but rather, since there seems to be a rising revolt again super-wealth, that the taxing them out of existence would be preferable to rubbing them out. After all, if one believes MMT, taxes are not necessary to fund a Federal Government who can (and does) simply 'make' money. Taxes are one way of incentivizing the wealthy to extract less so that more money flows downward. However, we may be past time to enact that solution through legislation, as the American Oligarchs pretty much have a lock on the political system. And, I am confused about your suggestion to pay 'an extra dollar per week for our own Social Security.' Are you referring to lifting the current cap on payroll SS contributions?
no. raise the cap is a bad idea. social security was designed to be a way ordinary workers could save their own money in perfect safety from inflation and other losses, earn a reasonable interest, and insure themselves against ending up in severe poverty in old age or because of disability. Roosevelt knew that making the rich pay would ensure they destroyed it.
because we are going to be living longer than our parents and grandparents we need to save a little more for our retirement than they did. the "more" turns out to be a 2% raise in the payroll tax, but better than that it can be raised one tenth of one percent per year at a time. that is about a dollar per week per year while real wages are going up about ten dollars per week per year.
i agree that we are past time to enact your other suggestions. we are almost out of time to save social security. but it is a pretty straightforward and easy to understand fix, and if "our" politicians would take the trouble to sell it...explain it to the people over and over again..they might win enough credibility to win the next election.
Republicans want huge tax cuts because (so they argue) it spurs investment, competition, entrepreneurship and risk taking. OK. So how do we counter this argument? By getting completely rid of corporate income taxes! If done, then how do we capture their income? If corporations distribute their profits in the form of stock dividends, then tax THAT. If they give year-end bonuses to key employees, then tax THAT. If they buy back their stock, then profits will be enjoyed by those who sold their stock. Tax THAT. And if they reinvest their profits in business expansion, then construction workers, electricians, plumbers, sheet-rockers, etc. will all see their incomes increase. Tax THAT. By eliminating the corporate income tax we'll be exhorting American business to make as much money as they can, and then we'll simply tax all the beneficiaries.
Now I concede that thousands of corporate lawyers whose only job is to figure out how to dodge federal corporate income taxes will be out of a job--but forgive me for not shedding a tear.
If we rob the wealthy of their only not-so-plausible justification for massive tax decreases, what argument will they be left with? "We just don't want to pay because we like being in the top 1%." This is an argument Democrats can easily win.
However, this doesn't solve the problem of how to help the bottom 80% in our society. The dirty little secret in economics is that if you give people a bunch of money they previously haven't had they're GOING TO SPEND IT! This excess currency circulation will almost certainly produce supply shortages and, along with opportunistic price gouging, drive up prices. Thus, this gov't largesse turns out to be self-defeating. UNLESS the gov't simultaneously imposes temporary price controls to ride out supply chain issues and prevent price gouging. Such a policy would improve the standard of living for many millions of Americans, and maybe even enable them to sock some money away in the bank (the act of SAVING will actually help tamp down inflation).
Price controls helped us win WWII. Yes, there was scarcity. But it was worth it. Now anyone who champions them is dismissed as a Marxist or some other imagined slur. I don't see how we can significantly improve the economic lives of the vast majority of Americans without price controls.
If history is any indication, the Dems won't learn their lesson at all. It's a lot easier to operate with the mindset of getting our fiscal house in order rather than learn the truth about how money works and also realize that there is a serious wealth gap in this country that both political parties are comfortable with, especially Republicans. We'll see what gives.
Dr. Kelton Dems and Repubs and all others ,top to bottom in our debilitating unequal world
need educated on the basics of MMT. So somehow you and the MMT squad have got to figure a way to get on right and left cable news frequently to educate the public all, but especially the
average, everyday, hard working masses !!! AND, especially about ,the MMT no#1 policy
solution of Gov Guaranteed Jobs with livable wage and benefits !!!
AND Dr Kelton, I should have ended my original comment below ,with the fact getting back to a progressive income tax and laws that prevent or limit an extreme wealth class is a must for a real functional DEMOCRACY !
-----------------------------------------------
Dr. Kelton Dems and Repubs and all others ,top to bottom in our debilitating unequal world, need education on the basics of MMT. So somehow you and the MMT squad have got to figure a way to get on right and left cable news frequently to educate the public all, but especially the average, everyday, hard working masses !!! AND, especially about ,the MMT no#1 policy solution of Gov Guaranteed Jobs with livable wage and benefits !!!
Creating and distributing money has always been the route to economic good times and during wars, winning them. Even deeper and more important than that historical fact is awakening to the deepest and longest unresolved economic problem which is the monopolistic monetary paradigm that new money can only be created and distributed as debt, i.e. Debt Only...which the banks wield and the government foolishly affirms. We need to make that fact as conscious as we possibly can, and resolve it by strategically and intelligently integrating the new monetary paradigm of Gifting into the Debt Only system. MMTers are actually late comers to the fact that new money is crerated by accounting entries. C. H. Douglas of the Social Credit movement between the world wars recognized this long before them. Douglas was a very clear minded individual, but like virtually everyone he was still a victim of acculturated false orthodoxies like the classical economic idea of general equillibrium which wed to the monopoly monetary paradigm prevents one from considering the single policy that would be a paradigm change all by itself, namely a 50% Discount (credit to the consumer) at retail sale/Full Rebate (debit to the back to the merchant). This policy mathematically doubles everyone's purchasing power while implementing beneficial price and asset deflation...because retail sale is the terminal ending point of the entire economic process where production exits the economy and becomes consumption and (my own new macro-economic insight) EVERYONE participates in retail sale so its the single aggregative as in macro-economic point in the entire economic process...and so the perfect place to implement monetary policy. Secure the new monetary paradigm's benefits by 1) taxing greedflation and any other bogus "increase" in costs at a rate of 100%, 2) index the retail discount/rebate to any legitimate inflationary cost increases 3) regulate with the additional policies in my book "Wisdomics-Gracenomics: The New Monetary Paradigm and It Policies" that rebutt orthodox critiques and resolve the other anomalies of the current paradigm.
Better to deal with what Democrats are for -- you know, the vision thing -- than what we are against. We have a lot of analysis about how bad the Republican agenda is, with virtually no attention on what to get behind. We'd need to come out of our silos to go from being gadflies to becoming a force for the good. Where can that come from? Join me in looking for that!
please take a look at what I have written here about Social Security. Winning the fight against the people trying to destroy Social Security would make it more likely people would take us seriously and vote for us to help solve the next problem: health care.
It's a good place to begin. Specific plans for specific problems would be more likely to succeed than genral "hate the rich" propaganda. The Dems are part of the problem. But if you can convince them they can win elections by successfuly soving specific problems...and lose them by not solving those problems, you have a chance.
Explaining MMT to "everyone" is at best a long term project. and even if they do understand it they will have no power to adopt MMT policies. The Deficit/Debt lie serves Congress and "the rich" very well. Even ifthe MMT paradigm were adopted, the same people who control spending today would control spending under MMT. Otherwise, MMT is as far as I can tell a perfectly valid (and to some extent already used, if not explicitly {in order to keep the Debt lie effective politics) used by all modern economies.
But, if nothing more than an example of how hard it is to explain anything to "the people": Kelton mentions the tax on SS benefits. Most people think this is a tax on a tax and therefor unfair. Actually, it is a tax on "interest" like any other interest income. Over time you get back about three times as much as you pay in to the Social Security "tax." Originally it did seem counterproductive to tax income intended to prevent poverty. But eventually it was realized that many people who recieve SS benefits (that they paid for) were in no danger of being poor, and in order to keep the payroll tax as low as possible and still provide sufficient benefits to be meaningful, it was decided to tax part of Social Security income if the recipients total income was above a certain level. This was and is the normal way interest is taxed. It is not a tax on a tax. But try to get anyone to understand that, even a Congressman.
The best way to explain a new concept is to find the places and ways to implement it in the world that the individual can easily experience for themselves. Thats what the 50% Discount/Rebate at retail sale and 50% Gift of Interest/Debt jubilee at point of loan signing does in spades because everyone participates in retail sale and increasingly in things like mortgages.
If you're for free profit-making markets you can't be for a monopoly paradigm wielded by a single business model and delusionally acquiest in by the government. If you do you'd have to say that The Reformation was wrong for breaking up the monopoly paradigm the Roman Catholic church had on salvation via its sacraments ONLY.
with respect, your plan may be exatly what we need, but I think it is extremely likely to never be implemented...or understood. it is too complicated, obscure, and depends on too many variables falling into place as you expect.
I have spent fifteen years trying to get people...including my senators and congressmen...to understand the simple fact that Social Security has nothing to do with the Deficit because it is worker-paid, and those workers can easily pay the increase in FICA needed to pay for the longer lives they expect to live after they can no longer work, as compared to previous generations. I have had very little success. So far. You might ask yourself why even you paid no attention to it when I brought it up here.
#1 I already understood that social security was not a part of the deficit
#2 Cynicism is the intellectual disease of all past ages and is particularly prevalent in the present "modern" one.
#3 When the individual gets to buy a $60k EV for $30k at retail and then goes to Finance and only has to sign a note for $15k, or buy a $500k house for $125k with the same two policies...they will be astonished almost as much as present economists will be who didn't recognize that the most underlying problem was the monopolistic monetary paradigm...because they, the consumer are able to see the simple math and enjoy the result. The wonder is why doesn't Stephanie and all the other MMTers and guys like Steve Keen and Michael Hudson see this and advocate for it??? They know new money is created simply by accounting entries that sum to zero, they know that the USA and other major countries are monetarily sovereign and if they'd momentarily drop the calculus that makes everyone's eyes glaze over
and simply do the simple math it would blow their minds.
Its all too simple for those who are accustomed to only think in terms of complexity, and yet too world changing not to be a paradigm change. In fact its what I have called a mega-paradigm change, of which there has probably only been two or three before in the history of the species. That is, its effects are directly, universally and continuously experienced and its effects spill over into other bodies of knowledge, systems and areas of human endeavor. For instance integrating a new monetary paradigm into the Debt Only system will be the greatest opportunity to self actualize gratitude for a gift since meditation and prayer, and we'll be stupid not to consciously recognize that and directly encourage such a transformational experience.
I am glad you already uderstood that SS is not part of the deficit. But Congressmen keep claiming it is. They need to be called on their lie...loudly and often until it sinks in.
I have no objection to your pursuing your idea, but I don't think you will be able to get it implemented. As I think you are saying here, people won't understand it until they experience it. But they won't experience it if the politicians won't implement it. Meanwhile, it would help us a lot if we could tell people the truth about Social Security. Win that battle..and it should be easy {should be. if .) win that battle and it may lead to people trusting us with the next big...and relatively simple...issue.
as for "do the math": that's what reporters and commentators were saying about SS a few years ago when not one of them has done the math...or any math ever in their lifetimes. note that "math" is not the same as "arithmetic."
You both present superb understanding of the problem: Congressional MMT understanding and where to start. Stephanie actually had a Democratic Congressman chairing the House Budget Committee using MMT specifically The Deficit Myth, but unfortunately retired shortly after. Perhaps we can get some lessons learned from him to game plan a strategic narrative. Keep the dialogue alive!
Victor Hugo Paraphrase To Use When Presenting To A Politician
If there is one thing all of the campaign financial donors of the world cannot resist, it is a new monetary paradigm that immediately doubles every person's purchasing power with a single policy. Steve Hummel 02/01/2025
It's hard for Democrats to make the class war case (which I personally think they should do) when they have chosen to be ever more reliant on the "donor class" to fund their campaigns. They want to have their cake (pro working class messaging) and eat it, too (pro donor class policies).
How's that working out?
At some point they're going to have to accept that this split personality approach isn't going to work and go full bore (narrative and policies) with one target audience. However, based on post-election commentary from within the party structure, that point seems far away. 🤷
MMT is a good reform bucking the same civilization-long moral and intellectual acculturation around the concept of debt. However, they need to up their game to paradigmatic analysis because reforms are always palliatives with half lives of decades or less and new paradigms are deep and permanent systemic-wide changes. The simplicity of new key applied ideas have always been where the power actually is. That may be an affront to the intellectual vanities of the erudite, but its historical fact.
I am pleased that you ask what Ds can do to limit the damage Rs will do to the American people, rather than what Ds can do to best score partisan points. Unfortunately, I fear that this will fall on deaf ears.
Victor Hugo Paraphrase To Use When Presenting To A Politician
If there is one thing all of the campaign financial donors of the world cannot resist, it is a new monetary paradigm that immediately doubles every person's purchasing power with a single policy. Steve Hummel 02/01/2025
In other words, we don't have a deficit if we have a nuclear aircraft carrier (or some other asset) to show for the spending. So-called entitlements such as Social Security are in fact covered by taxes, so they never create a deficit. So it's the discretionary part that creates deficits, things like repairing bridges or sending weapons to Ukraine. It's what we actually do with the money that is the bone of contention, not the possible deficit, which is simply an accounting entry. Is that it?
What is a deficit? Every dollar created and spent into the economy is a deficit for the government, but it’s adding wealth to the economy. Those dollars are the money We The People live on. The “federal deficit” is nothing more than an accounting identity for government bookkeeping.
Way too few dollars are getting into the bottom of the economy. Way too many dollars are going to the top of the economy. That’s the problem that needs to be solved.
Social security is only broke when you screw up the tax code and don't pay for it.
Get rid of the cap.
not quite. Roosevelt understood that if you make "the rich" pay for it they would destroy it. SS can continue to be paid for entirely by the workers who get the benefits by raising the payroll tax one tenth of one percent per year for a few years while real wages are going up one full percent per year.
Raising the capital alone only defers the SS insolvency issue as the benefit amount rises as well. If this relationship I'd broken and benefit amount is capped it then becomes a welfare program and a target for the rich.
Raising the cap along with small incremental increases to payroll taxes plus slowly increase age to qualify is the long term solution.
Jack
all SS needs is a one tenth of one percent raise in the payroll tax. Raising the cap turns SS into welfare..what Roosevelt warned us against. Raising the retirement age amounts to murder. If people pay for their own Social Security why should someone else be able to tell them when they can retire?
Raising the cap does not turn the program into welfare as the benefit amount also increases as the rules are written today. Limiting the benefit amount while raising the cap is indeed welfare.
No one is telling anyone when they can retire as my wife and I both retired prior to age 62 but SS is an insurance trust account and all insurance has rules regarding what qualification must be met prior to claiming benefits. FRA used to be age 65 and it is now age 67 and the SS program rules have changed multiple time since inception and people are living longer so it only makes sense to for the program to adapt to that reality if self funding is to stay in place.
The nuclear aircraft carrier is a floating liability and expense.
it is important to realize that "social security is covered by taxes" means that Social Security is paid for entirely by the workers themselves who will get the benefits through the FICA "payroll "tax" which is really a way for ordiary workers to save their own money and pay for insurance aginst poverty in old age or disability. it has nothing to with the federal budget. saying that SS is a "driver of the deficit" is simply a lie intended to fool the ignorant...which appears to include almost all Congress members, Presidents, pundits and reporters. The "non partisan experts" are in fact highly paid expert liars.
Magnificent analysis!
This is how I prefer to start my day! Thanks Professor! How can clergy help in the fight? I’m willing to get a “better “ grassroots movement going.
Read The Spirit Level, it should be right up your alley. It clearly ties every social I'll to wealth inequality.
You should know what to do after that, or just make it clear that taxing the rich is the answer.
Jen
taxing the rich has always been the answer. How is that going for you? The rich don't want to pay for your needs any more than you want to pay for the needs of the homeless people you see on the streets. I think if we can learn how to talk seriously and honestly and accurately we might be able to strike a bargain with "the rich" so they see the advantage to themselves of paying more taxes for a stronger and richer country, and we pay for our own needs as much as we can. Social Security is not a welfare program, but a mandatory savings and insurance plan. mandatory because people are not smart enough to pay for it if they don't have to. But it is the best thing out there that keeps them out of poverty.
For what it is worth: the rich already pay their fair share for Social Security if you mean by fair that they get what they pay for, they pay for what they get. Also the rich pay by far most of the taxes in this country. Demanding they pay for more is a loser politically. And no, I am not a shill for the rich. I just believe that we do better if we bargain like grownups.
stewart, if you are serious, start by telling the people that SS has nothing to do with the deficit, and it can be paid for forever jus by raising the payroll about one dollar per week per year. fuller facts and proof upon request. saving SS would likely open the chances for political victories that would solve the health care problem. a good beginning.
For those of us already understanding MMT, this is ok.
But Dr Kelton please be more clear and to the point in exactly WHAT message will work.
It's the cost of wealth inequality that is the issue. It's not the tax cut, it's the proven fatally flawed way of doing it, and who benefits.
It's FIX THE DAMN TAX CODE. Yes, cut at the lower end but NOT THE TOP.
NO MORE COMPENSATION WITH STOCK.
TAX THE HELL OUT OF CORPORATE STOCK BUYBACKS. TAX THE WAGE INEQUITY.
I hate yelling in all caps but let's get crystal clear.
Call out the budget deficit bull, and call out wealth inequality allowed, even promoted, by the tax code.
All Republicans and most Democrats only care about their campaign investors, aka donors.
The issue that the general populace cares about is inflation. Hence, end inflation forever by implementing the two 50% price reduction and debt jubilee policies I suggest at retail sale and point of loan signing, and tax any increase in final costs that is a fraud at a rate of 100%...and proceed to a liberal progressive political coalition greater than The New Deal.
Billionaire cabinet appointees about to give themselves a big ol' tax break!
A few days ago, walking in my nice middle-class (small houses start at $1 mil and go up) neighborhood, someone had spray-painted a dumpster outside the coffeeshop: Kill the Billionaires! No one was rushing to remove it. Smaller graffiti and tiny sticky posts appear on crossing signals and lamp posts: Eat the Rich, Kill the Rich, etc. Seems like there could be a ground-swell for: Tax the Rich. But, I don't hold my breath waiting for the Dems to latch onto this meme.
even the Dems are not that stupid. "kill the rich" is exactly why the rich fear the poor and fight to maintain their control over the government. try to be less greedy than they are . i think paying an extra dollar per week for our own Social Security would be a good place to start.
I did not suggest that the Dems espouse a 'kill the rich' agenda, but rather, since there seems to be a rising revolt again super-wealth, that the taxing them out of existence would be preferable to rubbing them out. After all, if one believes MMT, taxes are not necessary to fund a Federal Government who can (and does) simply 'make' money. Taxes are one way of incentivizing the wealthy to extract less so that more money flows downward. However, we may be past time to enact that solution through legislation, as the American Oligarchs pretty much have a lock on the political system. And, I am confused about your suggestion to pay 'an extra dollar per week for our own Social Security.' Are you referring to lifting the current cap on payroll SS contributions?
Claire
no. raise the cap is a bad idea. social security was designed to be a way ordinary workers could save their own money in perfect safety from inflation and other losses, earn a reasonable interest, and insure themselves against ending up in severe poverty in old age or because of disability. Roosevelt knew that making the rich pay would ensure they destroyed it.
because we are going to be living longer than our parents and grandparents we need to save a little more for our retirement than they did. the "more" turns out to be a 2% raise in the payroll tax, but better than that it can be raised one tenth of one percent per year at a time. that is about a dollar per week per year while real wages are going up about ten dollars per week per year.
i agree that we are past time to enact your other suggestions. we are almost out of time to save social security. but it is a pretty straightforward and easy to understand fix, and if "our" politicians would take the trouble to sell it...explain it to the people over and over again..they might win enough credibility to win the next election.
Republicans want huge tax cuts because (so they argue) it spurs investment, competition, entrepreneurship and risk taking. OK. So how do we counter this argument? By getting completely rid of corporate income taxes! If done, then how do we capture their income? If corporations distribute their profits in the form of stock dividends, then tax THAT. If they give year-end bonuses to key employees, then tax THAT. If they buy back their stock, then profits will be enjoyed by those who sold their stock. Tax THAT. And if they reinvest their profits in business expansion, then construction workers, electricians, plumbers, sheet-rockers, etc. will all see their incomes increase. Tax THAT. By eliminating the corporate income tax we'll be exhorting American business to make as much money as they can, and then we'll simply tax all the beneficiaries.
Now I concede that thousands of corporate lawyers whose only job is to figure out how to dodge federal corporate income taxes will be out of a job--but forgive me for not shedding a tear.
If we rob the wealthy of their only not-so-plausible justification for massive tax decreases, what argument will they be left with? "We just don't want to pay because we like being in the top 1%." This is an argument Democrats can easily win.
However, this doesn't solve the problem of how to help the bottom 80% in our society. The dirty little secret in economics is that if you give people a bunch of money they previously haven't had they're GOING TO SPEND IT! This excess currency circulation will almost certainly produce supply shortages and, along with opportunistic price gouging, drive up prices. Thus, this gov't largesse turns out to be self-defeating. UNLESS the gov't simultaneously imposes temporary price controls to ride out supply chain issues and prevent price gouging. Such a policy would improve the standard of living for many millions of Americans, and maybe even enable them to sock some money away in the bank (the act of SAVING will actually help tamp down inflation).
Price controls helped us win WWII. Yes, there was scarcity. But it was worth it. Now anyone who champions them is dismissed as a Marxist or some other imagined slur. I don't see how we can significantly improve the economic lives of the vast majority of Americans without price controls.
If history is any indication, the Dems won't learn their lesson at all. It's a lot easier to operate with the mindset of getting our fiscal house in order rather than learn the truth about how money works and also realize that there is a serious wealth gap in this country that both political parties are comfortable with, especially Republicans. We'll see what gives.
Dr. Kelton Dems and Repubs and all others ,top to bottom in our debilitating unequal world
need educated on the basics of MMT. So somehow you and the MMT squad have got to figure a way to get on right and left cable news frequently to educate the public all, but especially the
average, everyday, hard working masses !!! AND, especially about ,the MMT no#1 policy
solution of Gov Guaranteed Jobs with livable wage and benefits !!!
AND Dr Kelton, I should have ended my original comment below ,with the fact getting back to a progressive income tax and laws that prevent or limit an extreme wealth class is a must for a real functional DEMOCRACY !
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Dr. Kelton Dems and Repubs and all others ,top to bottom in our debilitating unequal world, need education on the basics of MMT. So somehow you and the MMT squad have got to figure a way to get on right and left cable news frequently to educate the public all, but especially the average, everyday, hard working masses !!! AND, especially about ,the MMT no#1 policy solution of Gov Guaranteed Jobs with livable wage and benefits !!!
Creating and distributing money has always been the route to economic good times and during wars, winning them. Even deeper and more important than that historical fact is awakening to the deepest and longest unresolved economic problem which is the monopolistic monetary paradigm that new money can only be created and distributed as debt, i.e. Debt Only...which the banks wield and the government foolishly affirms. We need to make that fact as conscious as we possibly can, and resolve it by strategically and intelligently integrating the new monetary paradigm of Gifting into the Debt Only system. MMTers are actually late comers to the fact that new money is crerated by accounting entries. C. H. Douglas of the Social Credit movement between the world wars recognized this long before them. Douglas was a very clear minded individual, but like virtually everyone he was still a victim of acculturated false orthodoxies like the classical economic idea of general equillibrium which wed to the monopoly monetary paradigm prevents one from considering the single policy that would be a paradigm change all by itself, namely a 50% Discount (credit to the consumer) at retail sale/Full Rebate (debit to the back to the merchant). This policy mathematically doubles everyone's purchasing power while implementing beneficial price and asset deflation...because retail sale is the terminal ending point of the entire economic process where production exits the economy and becomes consumption and (my own new macro-economic insight) EVERYONE participates in retail sale so its the single aggregative as in macro-economic point in the entire economic process...and so the perfect place to implement monetary policy. Secure the new monetary paradigm's benefits by 1) taxing greedflation and any other bogus "increase" in costs at a rate of 100%, 2) index the retail discount/rebate to any legitimate inflationary cost increases 3) regulate with the additional policies in my book "Wisdomics-Gracenomics: The New Monetary Paradigm and It Policies" that rebutt orthodox critiques and resolve the other anomalies of the current paradigm.
Where is MMT on this?
Better to deal with what Democrats are for -- you know, the vision thing -- than what we are against. We have a lot of analysis about how bad the Republican agenda is, with virtually no attention on what to get behind. We'd need to come out of our silos to go from being gadflies to becoming a force for the good. Where can that come from? Join me in looking for that!
Suzanne
please take a look at what I have written here about Social Security. Winning the fight against the people trying to destroy Social Security would make it more likely people would take us seriously and vote for us to help solve the next problem: health care.
It's a good place to begin. Specific plans for specific problems would be more likely to succeed than genral "hate the rich" propaganda. The Dems are part of the problem. But if you can convince them they can win elections by successfuly soving specific problems...and lose them by not solving those problems, you have a chance.
Explaining MMT to "everyone" is at best a long term project. and even if they do understand it they will have no power to adopt MMT policies. The Deficit/Debt lie serves Congress and "the rich" very well. Even ifthe MMT paradigm were adopted, the same people who control spending today would control spending under MMT. Otherwise, MMT is as far as I can tell a perfectly valid (and to some extent already used, if not explicitly {in order to keep the Debt lie effective politics) used by all modern economies.
But, if nothing more than an example of how hard it is to explain anything to "the people": Kelton mentions the tax on SS benefits. Most people think this is a tax on a tax and therefor unfair. Actually, it is a tax on "interest" like any other interest income. Over time you get back about three times as much as you pay in to the Social Security "tax." Originally it did seem counterproductive to tax income intended to prevent poverty. But eventually it was realized that many people who recieve SS benefits (that they paid for) were in no danger of being poor, and in order to keep the payroll tax as low as possible and still provide sufficient benefits to be meaningful, it was decided to tax part of Social Security income if the recipients total income was above a certain level. This was and is the normal way interest is taxed. It is not a tax on a tax. But try to get anyone to understand that, even a Congressman.
The best way to explain a new concept is to find the places and ways to implement it in the world that the individual can easily experience for themselves. Thats what the 50% Discount/Rebate at retail sale and 50% Gift of Interest/Debt jubilee at point of loan signing does in spades because everyone participates in retail sale and increasingly in things like mortgages.
If you're for free profit-making markets you can't be for a monopoly paradigm wielded by a single business model and delusionally acquiest in by the government. If you do you'd have to say that The Reformation was wrong for breaking up the monopoly paradigm the Roman Catholic church had on salvation via its sacraments ONLY.
Steve Hummel
with respect, your plan may be exatly what we need, but I think it is extremely likely to never be implemented...or understood. it is too complicated, obscure, and depends on too many variables falling into place as you expect.
I have spent fifteen years trying to get people...including my senators and congressmen...to understand the simple fact that Social Security has nothing to do with the Deficit because it is worker-paid, and those workers can easily pay the increase in FICA needed to pay for the longer lives they expect to live after they can no longer work, as compared to previous generations. I have had very little success. So far. You might ask yourself why even you paid no attention to it when I brought it up here.
#1 I already understood that social security was not a part of the deficit
#2 Cynicism is the intellectual disease of all past ages and is particularly prevalent in the present "modern" one.
#3 When the individual gets to buy a $60k EV for $30k at retail and then goes to Finance and only has to sign a note for $15k, or buy a $500k house for $125k with the same two policies...they will be astonished almost as much as present economists will be who didn't recognize that the most underlying problem was the monopolistic monetary paradigm...because they, the consumer are able to see the simple math and enjoy the result. The wonder is why doesn't Stephanie and all the other MMTers and guys like Steve Keen and Michael Hudson see this and advocate for it??? They know new money is created simply by accounting entries that sum to zero, they know that the USA and other major countries are monetarily sovereign and if they'd momentarily drop the calculus that makes everyone's eyes glaze over
and simply do the simple math it would blow their minds.
Its all too simple for those who are accustomed to only think in terms of complexity, and yet too world changing not to be a paradigm change. In fact its what I have called a mega-paradigm change, of which there has probably only been two or three before in the history of the species. That is, its effects are directly, universally and continuously experienced and its effects spill over into other bodies of knowledge, systems and areas of human endeavor. For instance integrating a new monetary paradigm into the Debt Only system will be the greatest opportunity to self actualize gratitude for a gift since meditation and prayer, and we'll be stupid not to consciously recognize that and directly encourage such a transformational experience.
Hummel
I am glad you already uderstood that SS is not part of the deficit. But Congressmen keep claiming it is. They need to be called on their lie...loudly and often until it sinks in.
I have no objection to your pursuing your idea, but I don't think you will be able to get it implemented. As I think you are saying here, people won't understand it until they experience it. But they won't experience it if the politicians won't implement it. Meanwhile, it would help us a lot if we could tell people the truth about Social Security. Win that battle..and it should be easy {should be. if .) win that battle and it may lead to people trusting us with the next big...and relatively simple...issue.
as for "do the math": that's what reporters and commentators were saying about SS a few years ago when not one of them has done the math...or any math ever in their lifetimes. note that "math" is not the same as "arithmetic."
You both present superb understanding of the problem: Congressional MMT understanding and where to start. Stephanie actually had a Democratic Congressman chairing the House Budget Committee using MMT specifically The Deficit Myth, but unfortunately retired shortly after. Perhaps we can get some lessons learned from him to game plan a strategic narrative. Keep the dialogue alive!
Victor Hugo Paraphrase To Use When Presenting To A Politician
If there is one thing all of the campaign financial donors of the world cannot resist, it is a new monetary paradigm that immediately doubles every person's purchasing power with a single policy. Steve Hummel 02/01/2025
It's hard for Democrats to make the class war case (which I personally think they should do) when they have chosen to be ever more reliant on the "donor class" to fund their campaigns. They want to have their cake (pro working class messaging) and eat it, too (pro donor class policies).
How's that working out?
At some point they're going to have to accept that this split personality approach isn't going to work and go full bore (narrative and policies) with one target audience. However, based on post-election commentary from within the party structure, that point seems far away. 🤷
MMT is a good reform bucking the same civilization-long moral and intellectual acculturation around the concept of debt. However, they need to up their game to paradigmatic analysis because reforms are always palliatives with half lives of decades or less and new paradigms are deep and permanent systemic-wide changes. The simplicity of new key applied ideas have always been where the power actually is. That may be an affront to the intellectual vanities of the erudite, but its historical fact.