Stories in The Washington Post and the New York Times have some in the blogosphere proclaiming that it's time to celebrate the death of the Grand Bargain, and others at least raising a question about its death. I'll go on record as saying that celebrating its death is definitely premature.
It is so because we've yet to go through the budget or continuing resolution-passing activities coming up in September, and also have yet to go through the debt ceiling conflict to come in October. Mainstream Washington commentators believe John Boehner is determined to avoid a government shutdown crisis of the budget/CR conflict and that one or the other will be passed before October 1. Assuming they're right, that still leaves the matter of the debt ceiling “crisis,” which the same commentators are saying will happen because Boehner has to promise his tea party caucus a chance to coerce the Administration, if he's going to get their acquiescence on the budget/government shutdown matter.
So, they think, we are looking at a debt ceiling crisis around October 15, when Jack Lew says the Government will run out of borrowing authority, and he will be reduced to juggling $50 Billion in available cash to both repay debt and pay for the other obligations of Government legislated by Congress. The position on the debt ceiling being taken by the Administration now is that it will not negotiate over it, and that it's demanding a clean bill raising the debt limit to pay for spending Congress has already approved. Read more about Declaring the Grand Bargain Dead Is Premature
With the end of the Summer break, now comes the return of the debt limit dance. From Treasury Secretary Jacob Lew's letter to John Boehner:
“Congress should act as soon as possible to protect America’s good credit by extending normal borrowing authority well before any risk of default becomes imminent.
“Based on our latest estimates extraordinary measures are projected to be exhausted in the middle of October. At that point, the United States will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day, The cash balance at that time is currently forecasted to be approximately $50 billion.
“. . . A cash balance of approximately $50 Billion would be insufficient to cover net expenditures for an extended period of time. And, on certain days, net expenditures could exceed such a cash balance.
“. . . Protecting the full faith and credit of the United States is the responsibility of Congress because only Congress can extend the nation’s borrowing authority . . .“
OK. So, only Congress can extend the nation's borrowing authority. But it doesn't follow from that fact that protecting the full faith and credit of the United States is the sole responsibility of Congress. Read more about Jack Lew: Avoiding Default Is Your Responsibility Too
On August 21, Chris Hedges wrote a great post called “Bradley Manning and the Gangster State.” It is consonant with my own thinking, and, more importantly, it makes one focus on the most important issue facing democracy today: “Is there a democracy in the United States anymore, or have we already evolved into a form of totalitarianism?” And if we have, then is there any return from this, a counter-evolution or revolution, that will restore our political liberties and our ability to change our political regime?
”The most spied upon, monitored and controlled population in human history”
Here's Chris's opening statement:
”The swift and brutal verdict read out by Army Col. Judge Denise Lind in sentencing Pfc. Bradley Manning to 35 years in prison means we have become a nation run by gangsters. It signals the inversion of our moral and legal order, the death of an independent media, and the open and flagrant misuse of the law to prevent any oversight or investigation of official abuses of power, including war crimes. The passivity of most of the nation’s citizens—the most spied upon, monitored and controlled population in human history—to the judicial lynching of Manning means they will be next. There are no institutional mechanisms left to halt the shredding of our most fundamental civil liberties, including habeas corpus and due process, or to prevent pre-emptive war, the assassination of U.S. citizens by the government and the complete obliteration of privacy.”
Some may object to the passionate and evaluative tone of this opening, and may want to quibble about whether Americans are “the most spied upon, monitored and controlled population in human history,” seeing this as glossing over the extreme conditions existing at the height of the Nazi, Stalin, and Mao regimes in Germany, the USSR, and China. But nevertheless it is hard to deny that in the areas of concern to the National Security Surveillance State, including not just foreign policy, “homeland security,” and the big media, but also in maintaining the dominance of the FIRE, Energy, military/industrial, and health insurance sectors of the economy, this statement is, sadly, true. Read more about Are We There Yet?
The Five Worst Reasons Why the National Debt Should Matter To You: Part Four, The Three Real Reasons
This is the concluding post in a four part series on the “Top” reasons why the national debt should matter. In Part One, I considered “Fix the Debt's” claim that high levels of debt cause high unemployment and argued that this is a false claim. In Part Two, I followed with a review of the historical record from 1930 to the present and showed that it refutes this claim throughout this period, and that there is not even one Administration where the evidence doesn't contradict “Fix the Debt's” theory. In Part Three I showed that the other four reasons advanced by “Fix the Debt” also had very little going for them. In this part, I'll give reasons why the national debt does matter, and why we should fix it without breaking America, or causing people to suffer. Read more about The Five Worst Reasons Why the National Debt Should Matter To You: Part Four, The Three Real Reasons
The Five Worst Reasons Why the National Debt Should Matter To You: Part Three, The Other Four Worst Reasons
In Part One of this series, I considered “Fix the Debt's” claim that high levels of debt cause high unemployment and gave a few reasons why this is a false claim. Read more about The Five Worst Reasons Why the National Debt Should Matter To You: Part Three, The Other Four Worst Reasons
In Part One, of a critique of the most important of "Fix the Debt's" reasons for "Why the National Debt Should Matter To You," I asserted that high debt levels haven't caused high unemployment in the United States, and that, if anything causation was in the other direction. I didn't want to disturb the flow of the argument there with a relatively lengthy survey of some of the numbers in the historical record since the 1930s. But let's test the idea that High debt causes fewer jobs and lower wages in the United States by looking at that record now. Read more about The Five Worst Reasons Why the National Debt Should Matter To You: Part Two, the Record Since 1930
The Five Worst Reasons Why the National Debt Should Matter To You: Part One, High Debt Levels and Jobs
I came across a post from the “Fix the Debt” campaign last month called “The Top Five Reasons Why the National Debt Should Matter to You.” It's a post full of debt/deficit lies that cry out for correction. That's what I'll provide in this series. Read more about The Five Worst Reasons Why the National Debt Should Matter To You: Part One, High Debt Levels and Jobs
I found a segment on MCNBC's Up With Steve Kornacke show revealing for what it did not say. The segment started off with a clip from a Recent Town Hall of John McCain's. Senator McCain took a question from a woman who said, with more than a little emotion. Read more about “Makers and Takers:” They're Projecting Again!
A commenter at DailyKos on my previous post on drawing the line in identifying whistle blowers said, among other things:
What I really find interesting is that Greenwald isn't even allegeding any wrong doing or illegal activity, just that the NSA 'has the capability' well no shit sherlock the government could do lots of things that doesn't mean it does or will.
Here's a memorable piece of video on Xkeyscore, featuring Piers Morgan, Glenn Greenwald, James Risen, and Jeffrey Toobin.
Risen and Greenwald get set up by Morgan pretty well to make Toobin look clueless, and silly, in his insistence that Snowden's done a very valuable thing for American democracy, but nevertheless must pay the price for releasing classified material. This is a village meme running around Washington, New York, and evidently, London, these days. Read more about Where Do You Draw the Line?
The first two Parts in this series began answering the question “what would u have him do?” It arose in the context of a Post at Naked Capitalism by Michael Hudson with some additions by Yves Smith. A commenter, objecting to the criticism of the President's Knox College speech, issued the challenge in connection with the President's promised effort to restore prosperity to the middle class and the poor.
In Part I, “Necessary First Moves,” I offered and described two of these: ending the filibuster, and using High Value Platinum Coin Seigniorage (HVPCS) to fill the Treasury General Account (TGA) with $60 Trillion in reserves. In Part II, I offered a number of proposals aimed at getting to full employment.
These included: a full payroll tax holiday; a guarantee of annual entitlement spending without regard to “trust fund” balances; State revenue sharing grants of roughly $1600 per person; and a Federal Job Guarantee program establishing jobs in local communities at a living wage with full fringe benefits. This third and last part will offer proposals for doing some economic and social justice to begin to right the wrongs the neoliberal globalizing political/economic/ideological system has inflicted on the American middle class and those living in poverty. Here are the proposals. Read more about What Would You Have the President Do? Part III, Doing Some Economic and Social Justice
Responding to a Post at Naked Capitalism by Michael Hudson with some additions by Yves Smith, a commenter, objecting to the criticism of the President's Knox College speech, issued the challenge ”What would u have him do?” in connection with his promised effort to restore prosperity to the middle class and the poor. In this series I'm giving my answer to that question. In Part I, “Necessary First Moves,” I offered and described two of these. Ending the filibuster, and using High Value Platinum Coin Seigniorage (HVPCS) to fill the Treasury General Account (TGA) with $60 Trillion in reserves.
The purpose of the first was to prepare the way for substantive policies by removing the Republican minority's power to tie up legislation. The purpose of the second, was to neutralize austerian fiscal responsibility justifications for subjecting every policy proposal to a deficit neutrality test, and for opposing deficit spending on grounds that it adds to the national debt and imposes heavy risks that the bond markets will demand very high interest rates on US debt. Of course, HVPCS gets rid of both the debt and bond market concerns for good.
Neither of these two policies, however, addresses substantive needs such as creating and maintaining full employment. This post is about the policies for getting to full employment I want the President to propose and try to implement. All of these policies have been previously proposed by MMT economists including Warren Mosler, Randy Wray, Bill Mitchell, Stephanie Kelton, and others. Read more about What Would You Have the President Do? Part II, Getting to Full Employment
There were varying reactions to the President's recent speech at Knox College this week. My reaction was that the speech was deeply dishonest in light of the President's previous policies, actions, and results, and I intended to do a critique, but Michael Hudson and Yves Smith beat me to it. Read more about What Would You Have the President Do? Part I, Necessary First Moves
One of the most important parts of the collective effort to spread the good news about the Modern Money Theory approach to macroeconomics is popularization of MMT views. Read more about The Smart Bunny's Guide to Debt, Deficit and Austerity: A Review
In October 2011 Marc Lavoie, a post-keynesian economist, very friendly to Modern Money Theory (MMT) wrote a paper presenting a friendly critical look at MMT. In his conclusion, Lavoie states that “. . . the neo-chartalist analysis is essentially correct . . . “ affirming his substantial agreement with MMT's analysis of banking operations and fiscal realities in nations with non-convertible fiat currencies, with floating exchange rates and no debts in currencies they do not issue, as well as MMT's analysis of Eurozone viability. But he goes on to say (p. 25):
“There is nothing or very little to be gained in arguing that government can spend by simply crediting a bank account; That government expenditures must precede tax collection; that the creation of high powered money requires government deficits in the long run; that central bank advances can be assimilated to a government expenditure; or that taxes and issues of securities do not finance government expenditures.”
So, Lavoie questions the wisdom of MMT economists and writers making certain counter-intuitive statements he perceives as certainly questionable, perhaps untrue, and also confusing to people, economists and decision makers trying to understand MMT writings. He considers these statements an important barrier to understanding, and he wants this 'baggage' to be discarded because he thinks it hurts MMT and post-keynesian efforts to get important new approaches to economics accepted. Read more about Lavoie's Critical Look at Modern Money Theory: A Reply