I believe this is another opportunity that the so-called Progressives in Congress will squander away by not bundling their votes to extract some concessions from the establishment, corporate controlled Democrats. Pick two reform issues that are polling very well and insist that they be promoted by leadership and/or get a couple of ranking member appointments to the appropriate committees.
I’m grateful for your consistently sound economic analysis and superb interview presentations Stephanie. This regime continues to smash the Federal apparatus through incoherent, incompetent and transparent corrupt actions of course it warrants a downgrade in the bond market. Peter Navarro, ex-felon pardoned by FFOTUS (our current elected felon), remains a complete disaster whose tariff philosophy should never see the light of day again. Your macroeconomic prowess motivates me to MMT advocacy daily.
Take care, stay safe and continue the MMT fight my favorite Wise Owl.
Stephanie, you are obviously an intelligent person, but why aren't you advocating the same method for creating money THAT MMT HAS CORRECTLY IDENTIFIED and both the private banks and the government use, namely equal equal debits and credits that sum to zero, at retail sale with a 50% discount (credit) all of which is rebated (debited) back to the merchant?
That single policy doubles everyone's purchasing power by implementing beneficial deflation, simultaneously doubles the potential demand for every enterprise's goods and services which is the very definition of good economic times and with the rebate back to the merchant eliminates any moral dilemma because they get their full price?
Why? Look at the effects of that single policyStephanie, you are obviously an intelligent person, but why aren't you advocating the same method for creating money THAT MMT HAS CORRECTLY IDENTIFIED and both the private banks and the government use, namely equal equal debits and credits that sum to zero, at retail sale with a 50% discount (credit) all of which is rebated (debited) back to the merchant?
That single policy doubles everyone's purchasing power by implementing beneficial deflation, simultaneously doubles the potential demand for every enterprise's goods and services which is the very definition of good economic times and with the rebate back to the merchant eliminates any moral dilemma because they get their full price?
Why? Look at the effects of that single policy (there are numerous additional policies possible to rebut every objection anyone who has questioned it) ...will you PLEASE! It will fulfill everything MMT would like to see happen. (there are numerous additional policies possible to rebut every objection I have heard from anyone who has questioned it)
It will fulfill everything MMT would like to see happen.
Steve, You've made this argument numerous times here, so I'd like to try to understand your proposal. In 2024, the retail and food service industries in the U,S. amounted to $8.55 trillion (with no gov't rebate). OK, so Americans have demonstrated that they'll spend that much OUT OF POCKET. But if all of those purchases receive a 50% discount, then Americans will only dish out $4.25 trillion--leaving $4.25 trillion to spend on other stuff. And the gov't picks up the tab for the other $4.25 trillion. But if all the other stuff Americans buy also receives a 50% discount, then this implies that supplies will have to double to meet this new demand. And the gov't will have to shell out an additional $4.25 trillion. At least 4 concerns come to mind. 1) Can our economy meet a doubling of demand? 2) Why should business owners reap this windfall? 3) What's the point of your proposal if prices simply rise substantially--which is what will happen when supply falls woefully short of demand? 4) Will an annual infusion of $8.5 trillion in currency into our economy by the U.S. Treasury/Federal Reserve trigger runaway inflation?
1) Most people won't spend all of their saved money because like all people who make a lot of money they will invest with it. In my book in order to encourage and increase this I suggest a sliding scale required percentage of Gifted money be "taxed"/invested in eco-energy R & D and infrastructure bonds at 5-6% in order to further mitigate consumption.
2) Most productive facilities do not operate at 100% and with the doubling of demand only the stupidest CEO would not increase such seeing this happening.
3) Business owners should benefit nothing wrong with that...but with the new paradigm the EVERYONE FINALLY benefits. Thats part of what makes it a paradigm change.
4) As I have pointed out before here, your assumption that prices will rise is just your acculturation of "free" market theoretics which isn't free at all, but rather a chaotic framework of domination created and enforced by Finance's wielding of the monopoly monetary paradigm of Debt Only. Integrating the new paradigm of Gifting into the Debt Only system not only benefits all agents it will create known and enforceable barriers to inflation and other economic vices...creating ACTUAL freedom within barriers...which in the human world of ethics IS THE ONLY ACTUAL FREEDOM...NOT THE FETSHIZED DELUSION OF TOTAL FREEDOM THAT "FREE" MARKET THEORETICS ASSERTS.
5) Have we ever had 50% y/o/y inflation let along moment to moment inflation? No, because high inflation is generally caused by circumstances created by the current monetary paradigm and other externalities. If you allow the FED's recommended 2% inflation, make the discount percentage 52% and tax any blatant greedflation revenue garnered from such at a rate of 100% that would discourage anti-social actions. Also, if a CEO raises their prices by say 20% and their competitor doesn't raise their price just
how much market share will he take away from the anti-social CEO?
There seems to be almost universal misunderstanding about the effects of the deficit. Could you please write about how reducing the income of lower economic groups while cutting taxes to the rich is a drag on economic activity.
The "Deficit Myth"--whose 5 year anniversary Stephanie celebrates (rightly) -- came out with excellent timing. Covid struck, high deficits were advocated to deal with it, and inflation was low. The right message at the right time!
Now the deficits have gone crazy. Inflation is NOT a non-issue. It seems that Washington DC is still following the Deficit Myth's 2020 medicine -- more deficits are OK -- in 2025 when the patient has a different sickness. Isn't it time to take a new tack?
Isn't the exploding deficit a problem? Isn't elevated inflation and high interest rates bad for the poor and middle class? Won't an extension of these deficits lead to a further strengthening of the dollar and downward pressure on wages? Don't they discourage domestic investment and depress the auto and real estate sectors, etc.?
In short, shouldn't Democrats be deficit hawks too -- but with a different program to close the deficit: higher taxes on the top 0.1%? I'm thinking of higher taxes on income derived from wealth especially, e.g. on passive interest income and capital gains on financial (as opposed to real) assets?
The Democrats could "out hawk" Republicans on the budget deficit to get the message across that there are other ways to address the deficit problem than cutting the most important programs of the poor.
Can MMT shed light on when to transition from "Deficits are needed as short-term stimulus" to "Deficits must be reduced to help the economy for the long term"? Isn't the latter question the one that calls for a sequel to "The Deficit Myth?"
I believe this is another opportunity that the so-called Progressives in Congress will squander away by not bundling their votes to extract some concessions from the establishment, corporate controlled Democrats. Pick two reform issues that are polling very well and insist that they be promoted by leadership and/or get a couple of ranking member appointments to the appropriate committees.
I’m grateful for your consistently sound economic analysis and superb interview presentations Stephanie. This regime continues to smash the Federal apparatus through incoherent, incompetent and transparent corrupt actions of course it warrants a downgrade in the bond market. Peter Navarro, ex-felon pardoned by FFOTUS (our current elected felon), remains a complete disaster whose tariff philosophy should never see the light of day again. Your macroeconomic prowess motivates me to MMT advocacy daily.
Take care, stay safe and continue the MMT fight my favorite Wise Owl.
the Bloomberg interview was masterful
I quoted Bobby Kogan’s apt words from the article, https://www.americanprogress.org/article/the-house-republicans-budget-bill-guts-basic-needs-programs-for-the-most-vulnerable-americans-to-give-tax-breaks-to-the-rich/. “If enacted, this would be the largest transfer of wealth from the poor to the rich in a single law in U.S. history.” He deserves all credit. I do fully agree with his sentiment and should have used quotation marks to make clear, my use of his words. Nevertheless, grateful for the shoutout.
Big Billionaire Bill
Great piece and interview.
Where do you see the inflation risk? I'm thinking with benefits going to the top, the bill might extend the stock market rally/bubble.
Stephanie, you are obviously an intelligent person, but why aren't you advocating the same method for creating money THAT MMT HAS CORRECTLY IDENTIFIED and both the private banks and the government use, namely equal equal debits and credits that sum to zero, at retail sale with a 50% discount (credit) all of which is rebated (debited) back to the merchant?
That single policy doubles everyone's purchasing power by implementing beneficial deflation, simultaneously doubles the potential demand for every enterprise's goods and services which is the very definition of good economic times and with the rebate back to the merchant eliminates any moral dilemma because they get their full price?
Why? Look at the effects of that single policyStephanie, you are obviously an intelligent person, but why aren't you advocating the same method for creating money THAT MMT HAS CORRECTLY IDENTIFIED and both the private banks and the government use, namely equal equal debits and credits that sum to zero, at retail sale with a 50% discount (credit) all of which is rebated (debited) back to the merchant?
That single policy doubles everyone's purchasing power by implementing beneficial deflation, simultaneously doubles the potential demand for every enterprise's goods and services which is the very definition of good economic times and with the rebate back to the merchant eliminates any moral dilemma because they get their full price?
Why? Look at the effects of that single policy (there are numerous additional policies possible to rebut every objection anyone who has questioned it) ...will you PLEASE! It will fulfill everything MMT would like to see happen. (there are numerous additional policies possible to rebut every objection I have heard from anyone who has questioned it)
It will fulfill everything MMT would like to see happen.
Steve, You've made this argument numerous times here, so I'd like to try to understand your proposal. In 2024, the retail and food service industries in the U,S. amounted to $8.55 trillion (with no gov't rebate). OK, so Americans have demonstrated that they'll spend that much OUT OF POCKET. But if all of those purchases receive a 50% discount, then Americans will only dish out $4.25 trillion--leaving $4.25 trillion to spend on other stuff. And the gov't picks up the tab for the other $4.25 trillion. But if all the other stuff Americans buy also receives a 50% discount, then this implies that supplies will have to double to meet this new demand. And the gov't will have to shell out an additional $4.25 trillion. At least 4 concerns come to mind. 1) Can our economy meet a doubling of demand? 2) Why should business owners reap this windfall? 3) What's the point of your proposal if prices simply rise substantially--which is what will happen when supply falls woefully short of demand? 4) Will an annual infusion of $8.5 trillion in currency into our economy by the U.S. Treasury/Federal Reserve trigger runaway inflation?
1) Most people won't spend all of their saved money because like all people who make a lot of money they will invest with it. In my book in order to encourage and increase this I suggest a sliding scale required percentage of Gifted money be "taxed"/invested in eco-energy R & D and infrastructure bonds at 5-6% in order to further mitigate consumption.
2) Most productive facilities do not operate at 100% and with the doubling of demand only the stupidest CEO would not increase such seeing this happening.
3) Business owners should benefit nothing wrong with that...but with the new paradigm the EVERYONE FINALLY benefits. Thats part of what makes it a paradigm change.
4) As I have pointed out before here, your assumption that prices will rise is just your acculturation of "free" market theoretics which isn't free at all, but rather a chaotic framework of domination created and enforced by Finance's wielding of the monopoly monetary paradigm of Debt Only. Integrating the new paradigm of Gifting into the Debt Only system not only benefits all agents it will create known and enforceable barriers to inflation and other economic vices...creating ACTUAL freedom within barriers...which in the human world of ethics IS THE ONLY ACTUAL FREEDOM...NOT THE FETSHIZED DELUSION OF TOTAL FREEDOM THAT "FREE" MARKET THEORETICS ASSERTS.
5) Have we ever had 50% y/o/y inflation let along moment to moment inflation? No, because high inflation is generally caused by circumstances created by the current monetary paradigm and other externalities. If you allow the FED's recommended 2% inflation, make the discount percentage 52% and tax any blatant greedflation revenue garnered from such at a rate of 100% that would discourage anti-social actions. Also, if a CEO raises their prices by say 20% and their competitor doesn't raise their price just
how much market share will he take away from the anti-social CEO?
There seems to be almost universal misunderstanding about the effects of the deficit. Could you please write about how reducing the income of lower economic groups while cutting taxes to the rich is a drag on economic activity.
The “national debt” scares Elon Musk and breaks up his romance with the current occupant, according to the NYT:
On Monday evening, Mr. Musk still had concerns. He hinted at them on X, reposting a chart apparently showing the yearly increase in the national debt.
“Scary,” Mr. Musk wrote as a caption.
The "Deficit Myth"--whose 5 year anniversary Stephanie celebrates (rightly) -- came out with excellent timing. Covid struck, high deficits were advocated to deal with it, and inflation was low. The right message at the right time!
Now the deficits have gone crazy. Inflation is NOT a non-issue. It seems that Washington DC is still following the Deficit Myth's 2020 medicine -- more deficits are OK -- in 2025 when the patient has a different sickness. Isn't it time to take a new tack?
Isn't the exploding deficit a problem? Isn't elevated inflation and high interest rates bad for the poor and middle class? Won't an extension of these deficits lead to a further strengthening of the dollar and downward pressure on wages? Don't they discourage domestic investment and depress the auto and real estate sectors, etc.?
In short, shouldn't Democrats be deficit hawks too -- but with a different program to close the deficit: higher taxes on the top 0.1%? I'm thinking of higher taxes on income derived from wealth especially, e.g. on passive interest income and capital gains on financial (as opposed to real) assets?
The Democrats could "out hawk" Republicans on the budget deficit to get the message across that there are other ways to address the deficit problem than cutting the most important programs of the poor.
Can MMT shed light on when to transition from "Deficits are needed as short-term stimulus" to "Deficits must be reduced to help the economy for the long term"? Isn't the latter question the one that calls for a sequel to "The Deficit Myth?"
Why are we still repeating the Debt lie?
Almost everyone doesn't give a shit about facts like you, Michael, and Claudia discuss.
Which is why our hemisphere will become irrelevant