Nice compliments from the host. But they all bring up a legitimate concern. Are we really going to trust Congress to get the spending just right at the appropriate time to deal with inflation/unemployment/deflation. (See: Congress right now.)
The solution is added Automatic Stabilizers. The Job Gty is a great such tool. Which will probably do the trick. But to get skeptics on board I recommend that MMT folks add another policy recommendation to deal with inflation: The Automatic Tax Adjustment tool. (ATA?)
The Job Gty/Green New Deal law should include AUTOMATIC across-the-board tax increases - collected monthly that kick in when certain monthly wage inflation targets are hit-say for 6 months in a row. These can include:
a) Income Taxes,
b) Sales/VAT Taxes
c) Asset Value (or Wealth) Taxes
That'll cool things off pronto.
Tax rates will then decline in real time as inflation cools off. The key is to have them legislated AHEAD of time and kick in AUTOMATICALLY.
Cuts in spending can also be part of the response if needed.
Trust would be easier if gerrymandering did not create so many ultra-safe seats. Since inflation is a hot button for many voters, one could expect, I think, the Congress to be responsive to it. But in order for that to happen, at least happen enough to make a difference, more Representatives need to experience genuine political risk. In too many cases now, the only risk they feel is from someone in a primary willing to carry an argument further toward a logical extreme. It's all interconnected.
With a competitive seat, your primary campaign is to your tribe, but your general campaign at least partly to the other two tribes" (centrists being the third tribe, and yes, they are a tribe). Otherwise you likely do not win.
With a gerrymandered "safe seat", you ignore both (any) of the other tribes. Completely. You don't need them, and any acknowledgment that they might have an even slightly legitimate policy argument about anything is a potentially existential threat to you. So you don't acknowledge such, even when, in the real world, such exists of course.
This poisons the discourse.
There have always been tribes. But big-data gerrymandering, which now distills electoral maps to a much finer degree than mere zip codes, is relatively new. And it makes a problem into an even worse problem, IMHO.
What if Congress "acts" on inflation but makes it worse? Because neoclassical economic doctrines have inflation backwards and often, Congress mostly refuse to use fiscal policy and simply watch on, uncritically, while the Federal Reserve lifts interests rates for the private banks which boosts inflation in the short term, and potentially drags the economy into a slump in the longer term. Or they go for surpluses which are a sure fired way of creating immediate recessions, as demonstrated in US history and other places like Australia.
The IRA has set a great precedent in the contemporary era, back to FDR days in a way. Congress working in partnership with progressive Presidents can do a lot to stimulate the economy in inflation-busting ways (cheaper power, more and better quality jobs, greater energy security from RE improves national security, etc etc) and bringing greater equity and real life improvements for the poor and working-poor and middle classes through improvement of Universal Public Services — something the USA continues to thumb it's nose at, as if the ghosts of Reagan and Thatchers and their greed is good mantras are the only poltical ideology viable for American politics and politicians.
Could they get spending more wrong? Is the MIC a protected species forever? Must elites remain the primary beneficiaries of Congressional budgets year on year, decade on decade, right back the the FDR New Deal (FDR clearly recognised the power of the public purse to be enabled and deliberately deployed for measures to improve equity and social goods via universal public services).
As Stephanie often says, just beginning to have that discussion about Federal spending from a place of knowledge (using the observationally accurate MMT lens) is a much better position to be in than no conversation amid a sea of myths about the nature of money, how it comes into existence (vertical money of Federal spending and horizontal credit-money).
The question asking "can we trust Congress with money and spending" begs the question, "can we allow elites in the banking, finance and shadow banking sectors to be living on the trillions of dollars in free income from Federal bonds (and periodic QE bonuses) and to demand through their capture of Congressmen via private and corporate donors that Congress only spend to benefit special and private interests?" (Bill Mitchell refers to Federal Bonds as social security for the rich.)
From the Federal Govt perspective taxes simply remove greenbacks from the economy, or household savings if you wanna sue Neoclassical nomenclature. Yes they have a role in anchoring the dollar in (fairly) nonelastic demand and redistribution towards equity (though not effectively given the tax minimisation industry) but in terms of the Federal position, they can create as much currency as required to meet their spending requirements. Again, as Prof Kelton is constantly saying, its about managing the real resources and for inflation not about managing the (so called) debt or the annual deficit.
Stephanie repeatedly mentioned risk to inflation, but maybe next time might it help better to also include the why? — that spending in areas with not enough productive capacity and available resources could lead to inflation? I suggest this because unfortunately there are still many folks who believe just having more money in the economy ("printing") is in itself inflationary, which is wrong. The real culprit of the inflation risk from spending too much in one sector is bumping up against limited productive capacity and available resources, which I learned from Stephanie :)
The suggestion that the CBO should estimate inflation risk seems reasonable. What would it take to get legislation directing them to do so in addition to the estimates that they currently make?
I don't think Stephanie ever answered Mike McKee's question about a limit on fiscal spending when "all the money is going into debt payment." (@2:11:xx). At least she did not respond directly to it. Those of us who are familiar with MMT think McKee's question is beside the point; nevertheless I would have been happier if she had taken it head on for the benefit of those who either are not familiar with MMT or believe it is unrealistic.
MMT. The crazed Progressive’s love it. They and you now have debt payments of over a trillion a year. And skyrocketing Prices are up nearly 20%, and our crazed spending is not generating returns that will close the gap in our ever widening budget deficit. And you cheer it on like a Soviet apparatchik.
I saw the tweet Nikki Haley put out there yesterday about the national debt becoming a burden to children and future generations and all I can do was laugh. I didn't know US treasuries which are a safe haven asset and generate interest income that benefit rich people would be such a burden. One of the biggest if not the biggest problems in America today is lack of understanding as to how government deficits work. It does happen to be one of the best kept secrets in America, its too bad that bad faith actors would rather choose austerity than grow the real economy.
Can you provide a link to the Bloomberg recording?
https://www.bloomberg.com/news/videos/2023-11-17/bloomberg-surveillance-11-17-2023-video
Nice compliments from the host. But they all bring up a legitimate concern. Are we really going to trust Congress to get the spending just right at the appropriate time to deal with inflation/unemployment/deflation. (See: Congress right now.)
The solution is added Automatic Stabilizers. The Job Gty is a great such tool. Which will probably do the trick. But to get skeptics on board I recommend that MMT folks add another policy recommendation to deal with inflation: The Automatic Tax Adjustment tool. (ATA?)
The Job Gty/Green New Deal law should include AUTOMATIC across-the-board tax increases - collected monthly that kick in when certain monthly wage inflation targets are hit-say for 6 months in a row. These can include:
a) Income Taxes,
b) Sales/VAT Taxes
c) Asset Value (or Wealth) Taxes
That'll cool things off pronto.
Tax rates will then decline in real time as inflation cools off. The key is to have them legislated AHEAD of time and kick in AUTOMATICALLY.
Cuts in spending can also be part of the response if needed.
Trust would be easier if gerrymandering did not create so many ultra-safe seats. Since inflation is a hot button for many voters, one could expect, I think, the Congress to be responsive to it. But in order for that to happen, at least happen enough to make a difference, more Representatives need to experience genuine political risk. In too many cases now, the only risk they feel is from someone in a primary willing to carry an argument further toward a logical extreme. It's all interconnected.
Gerrymandering is not the real issue. The issue is tribalism, where we vote for our tribe regardless of the policy impacts and results.
With reservations.
With a competitive seat, your primary campaign is to your tribe, but your general campaign at least partly to the other two tribes" (centrists being the third tribe, and yes, they are a tribe). Otherwise you likely do not win.
With a gerrymandered "safe seat", you ignore both (any) of the other tribes. Completely. You don't need them, and any acknowledgment that they might have an even slightly legitimate policy argument about anything is a potentially existential threat to you. So you don't acknowledge such, even when, in the real world, such exists of course.
This poisons the discourse.
There have always been tribes. But big-data gerrymandering, which now distills electoral maps to a much finer degree than mere zip codes, is relatively new. And it makes a problem into an even worse problem, IMHO.
What if Congress "acts" on inflation but makes it worse? Because neoclassical economic doctrines have inflation backwards and often, Congress mostly refuse to use fiscal policy and simply watch on, uncritically, while the Federal Reserve lifts interests rates for the private banks which boosts inflation in the short term, and potentially drags the economy into a slump in the longer term. Or they go for surpluses which are a sure fired way of creating immediate recessions, as demonstrated in US history and other places like Australia.
The IRA has set a great precedent in the contemporary era, back to FDR days in a way. Congress working in partnership with progressive Presidents can do a lot to stimulate the economy in inflation-busting ways (cheaper power, more and better quality jobs, greater energy security from RE improves national security, etc etc) and bringing greater equity and real life improvements for the poor and working-poor and middle classes through improvement of Universal Public Services — something the USA continues to thumb it's nose at, as if the ghosts of Reagan and Thatchers and their greed is good mantras are the only poltical ideology viable for American politics and politicians.
Could they get spending more wrong? Is the MIC a protected species forever? Must elites remain the primary beneficiaries of Congressional budgets year on year, decade on decade, right back the the FDR New Deal (FDR clearly recognised the power of the public purse to be enabled and deliberately deployed for measures to improve equity and social goods via universal public services).
As Stephanie often says, just beginning to have that discussion about Federal spending from a place of knowledge (using the observationally accurate MMT lens) is a much better position to be in than no conversation amid a sea of myths about the nature of money, how it comes into existence (vertical money of Federal spending and horizontal credit-money).
The question asking "can we trust Congress with money and spending" begs the question, "can we allow elites in the banking, finance and shadow banking sectors to be living on the trillions of dollars in free income from Federal bonds (and periodic QE bonuses) and to demand through their capture of Congressmen via private and corporate donors that Congress only spend to benefit special and private interests?" (Bill Mitchell refers to Federal Bonds as social security for the rich.)
From the Federal Govt perspective taxes simply remove greenbacks from the economy, or household savings if you wanna sue Neoclassical nomenclature. Yes they have a role in anchoring the dollar in (fairly) nonelastic demand and redistribution towards equity (though not effectively given the tax minimisation industry) but in terms of the Federal position, they can create as much currency as required to meet their spending requirements. Again, as Prof Kelton is constantly saying, its about managing the real resources and for inflation not about managing the (so called) debt or the annual deficit.
Brilliant stuff
Stephanie repeatedly mentioned risk to inflation, but maybe next time might it help better to also include the why? — that spending in areas with not enough productive capacity and available resources could lead to inflation? I suggest this because unfortunately there are still many folks who believe just having more money in the economy ("printing") is in itself inflationary, which is wrong. The real culprit of the inflation risk from spending too much in one sector is bumping up against limited productive capacity and available resources, which I learned from Stephanie :)
The suggestion that the CBO should estimate inflation risk seems reasonable. What would it take to get legislation directing them to do so in addition to the estimates that they currently make?
I don't think Stephanie ever answered Mike McKee's question about a limit on fiscal spending when "all the money is going into debt payment." (@2:11:xx). At least she did not respond directly to it. Those of us who are familiar with MMT think McKee's question is beside the point; nevertheless I would have been happier if she had taken it head on for the benefit of those who either are not familiar with MMT or believe it is unrealistic.
I don't see how an empirical description of any phenomenon can be "unrealistic."
Those in previous centuries might have thought that elephants or giraffes were "unrealistic," but that didn't make the descriptions of them untrue.
“Can we trust congress?” Why do they hate democracy?
So long as most politicians are bought and paid for by the Moneyed Interests, can legislative bodies be trusted?
Does anyone know of a genuine democracy on our planet?
I believe we all live in oligarchic kleptocracies masquerading as democracies, some worse than others.
MMT. The crazed Progressive’s love it. They and you now have debt payments of over a trillion a year. And skyrocketing Prices are up nearly 20%, and our crazed spending is not generating returns that will close the gap in our ever widening budget deficit. And you cheer it on like a Soviet apparatchik.
I saw the tweet Nikki Haley put out there yesterday about the national debt becoming a burden to children and future generations and all I can do was laugh. I didn't know US treasuries which are a safe haven asset and generate interest income that benefit rich people would be such a burden. One of the biggest if not the biggest problems in America today is lack of understanding as to how government deficits work. It does happen to be one of the best kept secrets in America, its too bad that bad faith actors would rather choose austerity than grow the real economy.
*legislative branch*
The love for NY has reached visual impairment.