The whole system is designed for Finance to remain a "Colossus bestride the world". It's bad enough that private finance has a monopoly on the creation of the life's blood of every economic agent, namely money, but it's insane that they are allowed a monopoly paradigm on the sole form and vehicle for its creation and distribution, namely DEBT ONLY.
If MMTers want to be serious about dealing with inflation and thus enabling fiscal deficits (monetary gifting to government agents) they will have to consider integrating monetary gifting DIRECTLY into the economy and the individual via a 50% Discount/Rebate policy at retail sale and the rest of the policy program of the new paradigm.
OK, Dan Davies tweets that there shouldn't be tax cuts for the wealthy during inflationary conditions. But we know that rich folks have a propensity to save, and so even if we do tax them appropriately during this time it will do little to affect inflationary pressures. The gov't would be clawing back money that wouldn't have been spent otherwise.
How about this idea? Fabulously wealthy people (anyone remember John Beresford Tipton?) love to give their money away once they're on "easy street." Why not give them the choice of being taxed or gifting their favorite non-profit organization? Neo-Nazi groups need not apply. They might argue that giving tax money away to the gov't is simply wasteful. OK, so don't do it. Give the equivalent amount of taxable money to the charitable organization of your choice. This idea already exists in the form of "tax deductible" contributions, but let's make it explicit (tax deductions on steroids) to amplify the magnanimous generosity of the wealthy making grants to those in need.
In other words, if we're going to take money away from rich folks, let's make sure we're not involved in some ridiculous charade of "reducing the deficit." Let's guarantee that the money is well spent.
There's actually a policy that enables this in my book. Taxation of income is not an effective anti-inflationary method. Now don't get me wrong, taxation is a legitimate and necessary function/right of government to help direct the economy in rational ways, but with 1) the new monetary paradigm that would not only end inflation forever but implement BENEFICIAL price and asset DEFLATION and 2) wed to the fact that sovereign fiat monetary systems don't actually require income taxes for funding...it frees us from well intentioned but unnecessarily high taxation.
If anyone gets tax cuts, it should be those in the lower brackets who could use it for food, shelter, healthcare, education, daycare, transportation ie basic human needs of these contemporary times.
Taxing very wealthy people and corporations would constrain asset price inflation and while not required, could be revenue neutral.
I agree with your sentiment in your 1st sentence, although it's true that income tax cuts don't amount to much if you don't make much money.
But I disagree with sentence #2. I frankly don't care if the price of a summer cottage on Martha's Vineyard shoots up by $200,000 this year. And while it's also true that taxing the wealthy will reduce the deficit (if that makes you feel better), it can't be used for revenue. Collecting federal taxes is an act of currency destruction. As soon as those tax receipts hit the Treasury's bank account at the Fed the money disappears in order to keep the books straight. The Treasury's source of "revenue" is the new money it creates "out of thin air" each year. As that "thin air" money is collected in taxes, the Treasury destroys it to keep inflation from going crazy. And then the process starts all over again the next year.
I understand taxation is akin to throwing these $ into a fire, it's about shifting the tax burden and who benefits.
Ideally tax $ would be shifted directly to some Authority, akin to existing housing authorities, which would avoid the cremation of these tax $'s by the Treasury.
You mentioned fire, so think of it this way. Imagine $50 billion in tax revenue for the state of New York (yes, it is "revenue" because it can and will be spent by Albany) that's denominated in paper currency. There's a fire, and that money is burned. Now this would never actually happen--just about everyone pays their taxes digitally. But suppose it did. NY would be out $50 billion.
Now suppose the IRS collects $1 trillion in taxes in the form of paper currency. This doesn't happen either, but bear with me. There's a fire and all of this money is burned. The Treasury wouldn't care because the money had to be destroyed anyway! It's true that the Treasury would be out for the cost of paper and ink to print more paper money, but that's pretty much the extent of the loss.
This is off topic, but I just heard Thom Hartman announce that you will be appearing for an interview on his show within the next couple of weeks. I can't tell you how happy I was to hear this as I have made requests of this on a few occasions (not that I had any influence!). I hope this can become a regular thing for he has a huge viewer/listenership that can benefit from the MMT perspective and dispel those myths you so eloquently wrote about in your book. I am especially interested in you getting your message out about Social Security and how to overcome its "solvency" issues. I am so tired of the constant scare tactics to cut or suspend it. Keep up the great work.
This budget is an extension of the entire brand of laissez faire capitalism that has failed again and again. The state here is taking capital and grit agoto those who can’t deploy it productively. They are subsidizing the price of oil, fracking to increase supply where fracking makes little if any sense and cutting taxes on those that have failed to invest in the technologies that are needed to prevent the costs of global warming from escalating. It is a bloody disaster for the UK and will bankrupt the country.
It seems that conservatives have a fixed delusion that forces them to return to the same disproved "solution." Like kids in a candy store they can't stop stuffing themselves despite adequate proof that it's making them sick. We're going to come up with a radical new system that's just like the old one.
The UK wants to imitate previous American administrations by cutting takes and increasing spending, financed though borrowing. The error is the USA is backed by the petrodollar which makes the dollar the world currency. The £ has no such backing.
The whole system is designed for Finance to remain a "Colossus bestride the world". It's bad enough that private finance has a monopoly on the creation of the life's blood of every economic agent, namely money, but it's insane that they are allowed a monopoly paradigm on the sole form and vehicle for its creation and distribution, namely DEBT ONLY.
If MMTers want to be serious about dealing with inflation and thus enabling fiscal deficits (monetary gifting to government agents) they will have to consider integrating monetary gifting DIRECTLY into the economy and the individual via a 50% Discount/Rebate policy at retail sale and the rest of the policy program of the new paradigm.
https://www.amazon.com/dp/B07PLNJLRN/ref=sr_1_1?keywords=wisdomics-Gracenomics&qid=1552358772&s=books&sr=1-1-catcorr
OK, Dan Davies tweets that there shouldn't be tax cuts for the wealthy during inflationary conditions. But we know that rich folks have a propensity to save, and so even if we do tax them appropriately during this time it will do little to affect inflationary pressures. The gov't would be clawing back money that wouldn't have been spent otherwise.
How about this idea? Fabulously wealthy people (anyone remember John Beresford Tipton?) love to give their money away once they're on "easy street." Why not give them the choice of being taxed or gifting their favorite non-profit organization? Neo-Nazi groups need not apply. They might argue that giving tax money away to the gov't is simply wasteful. OK, so don't do it. Give the equivalent amount of taxable money to the charitable organization of your choice. This idea already exists in the form of "tax deductible" contributions, but let's make it explicit (tax deductions on steroids) to amplify the magnanimous generosity of the wealthy making grants to those in need.
In other words, if we're going to take money away from rich folks, let's make sure we're not involved in some ridiculous charade of "reducing the deficit." Let's guarantee that the money is well spent.
There's actually a policy that enables this in my book. Taxation of income is not an effective anti-inflationary method. Now don't get me wrong, taxation is a legitimate and necessary function/right of government to help direct the economy in rational ways, but with 1) the new monetary paradigm that would not only end inflation forever but implement BENEFICIAL price and asset DEFLATION and 2) wed to the fact that sovereign fiat monetary systems don't actually require income taxes for funding...it frees us from well intentioned but unnecessarily high taxation.
If anyone gets tax cuts, it should be those in the lower brackets who could use it for food, shelter, healthcare, education, daycare, transportation ie basic human needs of these contemporary times.
Taxing very wealthy people and corporations would constrain asset price inflation and while not required, could be revenue neutral.
I agree with your sentiment in your 1st sentence, although it's true that income tax cuts don't amount to much if you don't make much money.
But I disagree with sentence #2. I frankly don't care if the price of a summer cottage on Martha's Vineyard shoots up by $200,000 this year. And while it's also true that taxing the wealthy will reduce the deficit (if that makes you feel better), it can't be used for revenue. Collecting federal taxes is an act of currency destruction. As soon as those tax receipts hit the Treasury's bank account at the Fed the money disappears in order to keep the books straight. The Treasury's source of "revenue" is the new money it creates "out of thin air" each year. As that "thin air" money is collected in taxes, the Treasury destroys it to keep inflation from going crazy. And then the process starts all over again the next year.
I understand taxation is akin to throwing these $ into a fire, it's about shifting the tax burden and who benefits.
Ideally tax $ would be shifted directly to some Authority, akin to existing housing authorities, which would avoid the cremation of these tax $'s by the Treasury.
You mentioned fire, so think of it this way. Imagine $50 billion in tax revenue for the state of New York (yes, it is "revenue" because it can and will be spent by Albany) that's denominated in paper currency. There's a fire, and that money is burned. Now this would never actually happen--just about everyone pays their taxes digitally. But suppose it did. NY would be out $50 billion.
Now suppose the IRS collects $1 trillion in taxes in the form of paper currency. This doesn't happen either, but bear with me. There's a fire and all of this money is burned. The Treasury wouldn't care because the money had to be destroyed anyway! It's true that the Treasury would be out for the cost of paper and ink to print more paper money, but that's pretty much the extent of the loss.
Thanks for your explanation, I appreciate it.
This is off topic, but I just heard Thom Hartman announce that you will be appearing for an interview on his show within the next couple of weeks. I can't tell you how happy I was to hear this as I have made requests of this on a few occasions (not that I had any influence!). I hope this can become a regular thing for he has a huge viewer/listenership that can benefit from the MMT perspective and dispel those myths you so eloquently wrote about in your book. I am especially interested in you getting your message out about Social Security and how to overcome its "solvency" issues. I am so tired of the constant scare tactics to cut or suspend it. Keep up the great work.
Would love to see analysis in the results of tax cuts on the rich and bubbles: housing, company valuations, stock market, PE investments, etc.
I'd be willing to bet it's almost a perfect correlation or very close to it.
This budget is an extension of the entire brand of laissez faire capitalism that has failed again and again. The state here is taking capital and grit agoto those who can’t deploy it productively. They are subsidizing the price of oil, fracking to increase supply where fracking makes little if any sense and cutting taxes on those that have failed to invest in the technologies that are needed to prevent the costs of global warming from escalating. It is a bloody disaster for the UK and will bankrupt the country.
It seems that conservatives have a fixed delusion that forces them to return to the same disproved "solution." Like kids in a candy store they can't stop stuffing themselves despite adequate proof that it's making them sick. We're going to come up with a radical new system that's just like the old one.
From Monarchy to Oligarchy.
Next up, World control by The Ruling Elite, using Special Drawing Rights when the global economy is very near collapse
The comments on the Reagan Tax cuts are wrong . the GDP advanced briskly, unemployment dropped and wages accelerated and the country was better off .
You must be a trust fund baby who benefited because that's about all who seriously benefited.
I will admit, hamburger flippers, clerks and waitresses also benefited.
The UK wants to imitate previous American administrations by cutting takes and increasing spending, financed though borrowing. The error is the USA is backed by the petrodollar which makes the dollar the world currency. The £ has no such backing.
The dollar peaked in the 90's as reserve currency reaching 71%.
Currently it's at 59% and sinking. When, not if, there are Petro-Yuan it will get much worse.
https://www.imf.org/en/Blogs/Articles/2021/05/05/blog-us-dollar-share-of-global-foreign-exchange-reserves-drops-to-25-year-low
https://www.visualcapitalist.com/cp/how-reserve-currencies-evolved-over-120-years/