As with any economy there are no perfect measures and they are all estimates.
One good measure is whether or not we are at full employment, defined by MMT as everyone who is able and willing to work has a job paying a socially-inclusive wage. See Bill Mitchell: http://bilbo.economicoutlook.net/blog/
As with any economy there are no perfect measures and they are all estimates.
One good measure is whether or not we are at full employment, defined by MMT as everyone who is able and willing to work has a job paying a socially-inclusive wage. See Bill Mitchell: http://bilbo.economicoutlook.net/blog/
Statistically this means getting the unemployment and underemployment rates as close to zero as possible. According to Mitchell, that's about 1-2%, which is made up of people switching jobs, etc. That irreducible part is frictional unemployment.
The participation rate is also important. This is defined as the percentage of the noninstitutionalized population over the age of 16 who are employed or looking for work. It can be increased by finding jobs for "discouraged workers" who have stopped looking for work because they can't find anything suitable.
Your bridge across the Gulf reminds me of one proposed by a Congressman from Alaska who proposed a bridge from the mainland to a small island that was called the "Bridge to Nowhere". It never passed Congress, fortunately.
I don't trust Congress at all, but they can already spend whatever they deem necessary. However, they won't spend to increase industrial capacity except for weapons makers as they still believe that deficits are bad and need to be reduced In addition, it would take industrial planning, i.e., targeting spending to specific industries and companies. They won't do that (again other than with weapons) because that's what the Soviet Union did and Russia does and that's anathema to our government. Bad commies and all that, ya know.
Industrial capacity is determined by the Federal Reserve which reports monthly on Industrial Production and Capacity Utilization.
There are plenty of true believers who think that the free market will indeed magically bring about the best result. As we have seen over the past 40+ years, that's a myth. The most productive era in the past 100 years was the post-war period up until President Carter when top individual tax rates were 74-91% and many industries were heavily regulated. Carter started the deregulation movement by deregulating the airlines and you can see the result in the recent Southwest debacle over the holidays.
"I don't trust Congress at all, but they can already spend whatever they deem necessary. "
Have you re-written the Constitutions APPROPRIATIONS clause?
Actually, NO, Congress cannot spend unless it is authorized (IN THE BUDGET) for both spending and appropriation - which means "money" (from taxes and debt-proceeds) already in the Treasury account.
Joe - Congress is the body that authorizes both spending and appropriation. Your statement that they can't spend what they deem necessary doesn't make sense.
It has authorized the spending, AND it has authorized the appropriation of the FUNDS IN THE TREASURY - not already appropriated.
Do you read the Appropriations Bills?
They conform to the same Constitutional limitations.
Were there no Debt-Ceiling, no problem.
BUT, more important, were Congress to grant itself the money-creation powers that the Constitution permits ( see Greenbacks), then the smartest kids in the room would not be advocating for more government BORROWING - just because their banker-guru says so.
When necessary, like now, CHANGE THE LAW. The whole "problem" with both the national "debt" and the biggest economic problem since forever, inflation, is solved by integrating the new paradigm of Gifting into the Debt Only system.
That is accomplished by 1) the government/treasury simply creating and distributing the money to fund the government with MONEY, NOT presto-change-o Treasuries...so everyone thinks its actually a debt when its really just money created and distributed and 2) the government/monetary authority rebates the 50% discount that retailers grant to consumers which accomplishes a) beneficial macro-economic deflation for everyone (you can buy $100 worth of sweet potatos for $50 and Buy a $60k Tesla for $30k...JUST DO THE MATH ON EVERY PURCHASE THAT EVERYONE MAKES) and b) the rebate aspect of the policy makes the retailer whole on their overheads and profit margins.
If you're not analyzing and looking at things on the paradigmatic level you're just blabbering around with a shit load of complexities that the paradigmatic level resolves and hence you become an erudite dunce.
If you scroll down you will see my apology for misunderstanding that you do indeed comprehend the paradigm of Debt Only so please lets just proceed.
I'm familiar with Kucinich's proposal and I'm okay with what it suggests. Its problem is in what it doesn't suggest, namely an immediate, direct to the individual set of policies that simultaneously resolves the economic AND THE POLITICAL PROBLEMS facing us. Paradigm changes don't occur all the time, but a linked multi-systemic change is the signature of a mega-paradigm change of which there have probably only been three in the entire history of the human species...so lets go mega because why not?
Its wonderful to get such participation on this subject and its core problem (the current monetary paradigm and lack of consciousness of the necessity of paradigmatic analysis). I really hope that you Stephanie will offer your input.
The government has no need to "borrow", the requirement that Treasury securities be issued in an amount equal to the difference between spending and tax revenue is a vestige of the days when we were on a gold standard that should repealed, as should the debt limit.
Correct. If you just create money and distribute it strategically (a universal dividend to every adult and with a 50% Discount/Rebate policy at retail sale) you solve all of the problems and ignorance of the current paradigm of Debt Only.
Steve - The problem with a UBI or universal dividend is that while it provides more money for people to spend, it does nothing to provide the additional real resources to be purchased by that additional money. As a result, it can be inflationary. I think Bill Mitchell has written the best analysis on this: http://bilbo.economicoutlook.net/blog/?p=44133
John, You're correct that we need to coordinate the productiove system, but 1) a 50% discount at retail sale is going to implement beneficial deflation because we've never had y/oy inflation of 50% let alone moment to moment 50% inflation, 2) a doubling of purchasing power doesn't ipso facto translate into a doubling of consumption/economic through put because not everyone is going to eat twice as much or buy twice as many pairs of shoes as they did before the 50% discount and 3) once a mass movement communicates the obvious and tremendous benefits of the new paradigm's policies that awareness and its logical political effects will be perceived by the decision makers of savvy business and additional productive capacity will become the reality relatively quickly.
Seems a conundrum among your held understandings .... manifest.
It is of course NOT a vestige of the good old gold days - whenever one thinks they were relevant to anything. Not at all.
Every sovereign government CAN issue sovereign debt.(borrow).
If and How the sovereign does so is legislatively and autonomously determined.
Read the Statute establishing the Treasury.
Having said, that, John Zelnicker , who claimed to want to ignore my comments because he went somewhere, and saw nothing. You have both exactly stated the law, Under Deficit Spending in Budget, the government MUST borrow, or it cannot pay the Bills) and denied that law exists (claiming the law establishing Treasury's authorities only exist because of gold) in one swell foop.
Nice work.
That's how old the law is, John. Were we on a gold standard in 1791 ?
Thank you for your response, John Zelnicker. I agree that no measure is perfect and that Congress already has the power to spend what it deems necessary. However, the entire point of the American Constitution, as I understand it, is to put restrictions on the powers of the government.
Giving Congress the right to print and spend as much money as it "deems necessary" is a lot of power and a giant potential for abuse. I guess looking at unemployment and inflation numbers and making spending decisions does make more sense than an aribtrary debt ceiling. It would be nice if the US government acted as an "employer of last resort" as it makes a lot more sense to be paying people to work than not to work.
In short, I guess what you are trying to say is that Congress already has the power to spend what it wants to and the arbitrary debt ceiling does nothing to curb this power but only muddies the conversations. I am finding it difficult to disagree with this.
As with any economy there are no perfect measures and they are all estimates.
One good measure is whether or not we are at full employment, defined by MMT as everyone who is able and willing to work has a job paying a socially-inclusive wage. See Bill Mitchell: http://bilbo.economicoutlook.net/blog/
Statistically this means getting the unemployment and underemployment rates as close to zero as possible. According to Mitchell, that's about 1-2%, which is made up of people switching jobs, etc. That irreducible part is frictional unemployment.
The participation rate is also important. This is defined as the percentage of the noninstitutionalized population over the age of 16 who are employed or looking for work. It can be increased by finding jobs for "discouraged workers" who have stopped looking for work because they can't find anything suitable.
Your bridge across the Gulf reminds me of one proposed by a Congressman from Alaska who proposed a bridge from the mainland to a small island that was called the "Bridge to Nowhere". It never passed Congress, fortunately.
I don't trust Congress at all, but they can already spend whatever they deem necessary. However, they won't spend to increase industrial capacity except for weapons makers as they still believe that deficits are bad and need to be reduced In addition, it would take industrial planning, i.e., targeting spending to specific industries and companies. They won't do that (again other than with weapons) because that's what the Soviet Union did and Russia does and that's anathema to our government. Bad commies and all that, ya know.
Industrial capacity is determined by the Federal Reserve which reports monthly on Industrial Production and Capacity Utilization.
There are plenty of true believers who think that the free market will indeed magically bring about the best result. As we have seen over the past 40+ years, that's a myth. The most productive era in the past 100 years was the post-war period up until President Carter when top individual tax rates were 74-91% and many industries were heavily regulated. Carter started the deregulation movement by deregulating the airlines and you can see the result in the recent Southwest debacle over the holidays.
"I don't trust Congress at all, but they can already spend whatever they deem necessary. "
Have you re-written the Constitutions APPROPRIATIONS clause?
Actually, NO, Congress cannot spend unless it is authorized (IN THE BUDGET) for both spending and appropriation - which means "money" (from taxes and debt-proceeds) already in the Treasury account.
Just saying.
The Money Apprentice
Joe - Congress is the body that authorizes both spending and appropriation. Your statement that they can't spend what they deem necessary doesn't make sense.
John,
Congress does it all.
It has authorized the spending, AND it has authorized the appropriation of the FUNDS IN THE TREASURY - not already appropriated.
Do you read the Appropriations Bills?
They conform to the same Constitutional limitations.
Were there no Debt-Ceiling, no problem.
BUT, more important, were Congress to grant itself the money-creation powers that the Constitution permits ( see Greenbacks), then the smartest kids in the room would not be advocating for more government BORROWING - just because their banker-guru says so.
Thanks.
The Money Apprentice.
When necessary, like now, CHANGE THE LAW. The whole "problem" with both the national "debt" and the biggest economic problem since forever, inflation, is solved by integrating the new paradigm of Gifting into the Debt Only system.
That is accomplished by 1) the government/treasury simply creating and distributing the money to fund the government with MONEY, NOT presto-change-o Treasuries...so everyone thinks its actually a debt when its really just money created and distributed and 2) the government/monetary authority rebates the 50% discount that retailers grant to consumers which accomplishes a) beneficial macro-economic deflation for everyone (you can buy $100 worth of sweet potatos for $50 and Buy a $60k Tesla for $30k...JUST DO THE MATH ON EVERY PURCHASE THAT EVERYONE MAKES) and b) the rebate aspect of the policy makes the retailer whole on their overheads and profit margins.
If you're not analyzing and looking at things on the paradigmatic level you're just blabbering around with a shit load of complexities that the paradigmatic level resolves and hence you become an erudite dunce.
Steve,
I really do not enjoy your unfounded and petty asides.
Let me know if I should elaborate.
LOL.
Paradynamic. WOW .
Shifting the lever, eh?
I already left this link once.
So.
The National Emergency Employment Defense Act. of 2011.
https://www.congress.gov/bill/112th-congress/house-bill/2990/text
Does all you're asking for, except the silly and unnecessary rebates ........ better done through raw material Parity Pricing, and more.
Take a look in the mirror, head.
The Money Apprentice
If you scroll down you will see my apology for misunderstanding that you do indeed comprehend the paradigm of Debt Only so please lets just proceed.
I'm familiar with Kucinich's proposal and I'm okay with what it suggests. Its problem is in what it doesn't suggest, namely an immediate, direct to the individual set of policies that simultaneously resolves the economic AND THE POLITICAL PROBLEMS facing us. Paradigm changes don't occur all the time, but a linked multi-systemic change is the signature of a mega-paradigm change of which there have probably only been three in the entire history of the human species...so lets go mega because why not?
Its wonderful to get such participation on this subject and its core problem (the current monetary paradigm and lack of consciousness of the necessity of paradigmatic analysis). I really hope that you Stephanie will offer your input.
The government has no need to "borrow", the requirement that Treasury securities be issued in an amount equal to the difference between spending and tax revenue is a vestige of the days when we were on a gold standard that should repealed, as should the debt limit.
Correct. If you just create money and distribute it strategically (a universal dividend to every adult and with a 50% Discount/Rebate policy at retail sale) you solve all of the problems and ignorance of the current paradigm of Debt Only.
Steve - The problem with a UBI or universal dividend is that while it provides more money for people to spend, it does nothing to provide the additional real resources to be purchased by that additional money. As a result, it can be inflationary. I think Bill Mitchell has written the best analysis on this: http://bilbo.economicoutlook.net/blog/?p=44133
There are other articles and podcasts, too.
John, You're correct that we need to coordinate the productiove system, but 1) a 50% discount at retail sale is going to implement beneficial deflation because we've never had y/oy inflation of 50% let alone moment to moment 50% inflation, 2) a doubling of purchasing power doesn't ipso facto translate into a doubling of consumption/economic through put because not everyone is going to eat twice as much or buy twice as many pairs of shoes as they did before the 50% discount and 3) once a mass movement communicates the obvious and tremendous benefits of the new paradigm's policies that awareness and its logical political effects will be perceived by the decision makers of savvy business and additional productive capacity will become the reality relatively quickly.
Steve,
"If ........."
Greenbacks.
Debt-free. Spent into circulation as permanently-circulating (until Clinton).
Modern version.
https://www.congress.gov/bill/112th-congress/house-bill/2990/text
Pass that.
No more debt-ceiling problems.
Ever.
Just saying.
The Money Apprentice.
Yes, but the distributed money must be done strategically so as to resolve the problems of the current paradigm od Debt Only.
Seems a conundrum among your held understandings .... manifest.
It is of course NOT a vestige of the good old gold days - whenever one thinks they were relevant to anything. Not at all.
Every sovereign government CAN issue sovereign debt.(borrow).
If and How the sovereign does so is legislatively and autonomously determined.
Read the Statute establishing the Treasury.
Having said, that, John Zelnicker , who claimed to want to ignore my comments because he went somewhere, and saw nothing. You have both exactly stated the law, Under Deficit Spending in Budget, the government MUST borrow, or it cannot pay the Bills) and denied that law exists (claiming the law establishing Treasury's authorities only exist because of gold) in one swell foop.
Nice work.
That's how old the law is, John. Were we on a gold standard in 1791 ?
Hyperbole. The glue that holds MMT together.
You need to try harder.
The Money Apprentice
You're right, I couldn't resist.
However, you are misinterpreting what I said. 'Nuff said.
Thank you for your response, John Zelnicker. I agree that no measure is perfect and that Congress already has the power to spend what it deems necessary. However, the entire point of the American Constitution, as I understand it, is to put restrictions on the powers of the government.
Giving Congress the right to print and spend as much money as it "deems necessary" is a lot of power and a giant potential for abuse. I guess looking at unemployment and inflation numbers and making spending decisions does make more sense than an aribtrary debt ceiling. It would be nice if the US government acted as an "employer of last resort" as it makes a lot more sense to be paying people to work than not to work.
In short, I guess what you are trying to say is that Congress already has the power to spend what it wants to and the arbitrary debt ceiling does nothing to curb this power but only muddies the conversations. I am finding it difficult to disagree with this.
See Prof. Kelton's latest post that was published since your comment:
https://stephaniekelton.substack.com/p/these-are-the-times-that-try-mens