Submitted by letsgetitdone on Tue, 04/16/2013 - 1:53pm
Deficit spending by the government is merely the counterpart of private sector saving. What government deficit spending does is to permit the private sector to achieve its level of desired saving. When the latter changes, government spending ought to be adjusting in the opposite direction to offset it (unless the current account balance happens to do the job). Read below the fold...
Submitted by letsgetitdone on Wed, 03/27/2013 - 12:33am
The Sector Financial Balances Model:
Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0
is an accounting identity that provides a focus for macroeconomic analysis, explanation, and prediction by economists applying the Modern Money Theory (MMT) approach. It leads to a very critical line of thinking about the budget deficit projections produced for our consumption by the Congressional Progressive Caucus (CPC), Congressional Budget Office (CBO), the House, and the Senate. The US has recently had a sharp decline in its balance of trade deficit. It now stands at about 3% of GDP; which means that the rest of the world has a surplus, a balance of +3% of US GDP in its annual trade with the United States.
Assuming that surplus is unlikely to shrink anymore, we can see from the equation that unless the Government balance is less than -3% of GDP, the Domestic Private Balance in the United States economy will not be positive (a surplus, and addition to nominal financial wealth) and is very likely to be negative (a deficit, a subtraction from nominal financial wealth). So, the private sector taken as a whole will be losing rather than gaining Net Financial Assets (NFAs), every year for as long as the situation lasts. Read below the fold...
Submitted by letsgetitdone on Tue, 04/05/2011 - 12:28pm
Ah.... my fellow Americans, be very, very, afraid of the terrible Social Security crisis that will sink us as a nation. According to Government projections, we won't be able to pay full Social Security benefits, in 2037 and beyond, unless we cut benefits now, because the Social Security “Trust Fund” will be short of money. Read below the fold...
Submitted by letsgetitdone on Wed, 09/08/2010 - 1:38am
Submitted by letsgetitdone on Fri, 08/13/2010 - 11:19pm
Submitted by letsgetitdone on Wed, 08/11/2010 - 10:44pm
Submitted by letsgetitdone on Thu, 08/05/2010 - 1:05pm
The Washington Post editorial page has been one of the primary MSM outlets for aggressive deficit terrorism. There is an axis of deficit terrorism in Washington DC today. It runs from Hooverite Republicans such as Judd Gregg and Mike Spence, to Blue Dog Democrats like Evan Bayh and Kent Conrad, to media organizations like CNN, WaPo, and the Peter G. Peterson funded The Fiscal Times, to foundations like The Peter G. Peterson Foundation, and Peterson-funded think tanks like AmericaSpeaks, to the Congressional Budget Office (CBO), to high-level Administration people like OMB Director designate Jack Lew, and judging by his speech and actions, to Barack Obama himself. This axis has been laying down a carpet of continuous propaganda for many months now distracting attention from the immediate problem of getting people back to work, and toward doing something about an assumed long-term problem, that some argue is fictional, and that many others think may, but, will most probably not, occur
Last Saturday, the WaPo added to its place in progressive infamy with an editorial that managed, in a few short paragraphs, to repeat many of the false arguments the deficit terrorists use to scare Americans into thinking that we really have to cut Government spending as soon as we can or we will be facing unbearable suffering in future years. This post will review that editorial in detail. It begins: Read below the fold...
Submitted by letsgetitdone on Wed, 07/28/2010 - 2:22am
The debates between the deficit doves and the deficit owls continued at New Deal 2.0 (ND20) today. Jeff Madrick, a dove, gives us a post entitled: “Stimulate Now: On Inflation and Deficits.” In this post, I'll evaluate Jeff's views paragraph by paragraph.
”Some have suggested that if a country nears the point that it must consider default, that is, it can’t generate enough tax revenues to pay debt and meet other minimal commitments, then all it need do is create reserves if it has a sovereign (aka ‘fiat’) currency.”
Maybe Jeff is right that “some have suggested . . .” the above, but I've never seen anyone do that. The economists I read who write about the capabilities of Governments sovereign in their own currencies say that such countries can't be forced to default, that they can only do so voluntarily, and that if they do, it's only because their decision makers don't understand that they can't be forced into default by international markets any external authorities. Read below the fold...
Submitted by letsgetitdone on Sun, 07/04/2010 - 3:12pm
In my previous three posts analyzing the June 26th AmericaSpeaks Community Conversation event I attended in Falls Church, VA, I presented the steps in the decision process used for the event, and discussed the pre-conference phase and the first four steps. Read below the fold...
Submitted by letsgetitdone on Sun, 06/27/2010 - 11:11pm
After going to one of the AmericaSpeaks community conversations yesterday, I'm even more confident that the deficit crisis being promoted by the Peter G. Peterson Foundation, AmericaSpeaks, the National Commission on Fiscal Responsibility and Reform, and the Obama Administration, as well of much the world's global elite is a fantasy. There is no truth to it, and it is a dangerous fantasy, because if one believes it, then that can be a self-fulfilling prophecy. Read below the fold...
Submitted by letsgetitdone on Mon, 05/17/2010 - 12:02am
Warren Mosler and Joseph M. Firestone
Paul Krugman agrees that “We're Not Greece.” But he only appears to have a glimmer of an understanding of the most important reason why this is so. We hope this commentary on his op-ed piece improves his understanding, and that of other deficit doves who appear to disagree with the deficit terrorists, but who in the end share their false basic assumptions about deficits, national debts, fiscal responsibility, and fiscal sustainability.
It’s an ill wind that blows nobody good, and the crisis in Greece is making some people — people who opposed health care reform and are itching for an excuse to dismantle Social Security — very, very happy. Everywhere you look there are editorials and commentaries, some posing as objective reporting, asserting that Greece today will be America tomorrow unless we abandon all that nonsense about taking care of those in need.
Read below the fold...
Submitted by letsgetitdone on Mon, 05/10/2010 - 12:41pm
Submitted by letsgetitdone on Sun, 01/31/2010 - 3:12pm
The corporatist-centrist politicians, such as Judd Gregg, Kent Conrad, Evan Bayh, no longer afraid of a total collapse of the world economy, are using deadly innocent frauds, scare, myths, and lies about the deficit and the national debt to undermine the possibilities of progressive change in the United States. Read below the fold...
Submitted by letsgetitdone on Thu, 12/17/2009 - 11:32am
When I was young the United States had some liberals of courage in the Senate. People like Estes Kefauver, Paul Douglas, Hubert H. Humphrey, Herbert Lehman, Wayne Morse, Richard L. Neuberger, Maurine B. Neuberger, Eugene McCarthy, Mike Mansfield, Ernest Gruening, Pat McNamara, Phil Hart, Frank Church, George McGovern, Albert Gore, Sr., Ralph Yarborough, Warren Magnuson, and William Proxmire. These liberals could be counted on to go to the mat for most liberal causes. They said what they meant, and meant what they said. They compromised. Read below the fold...
Submitted by gob on Sat, 08/01/2009 - 7:44pm
This just in from my local single-payer activism source on Thursday's DC trip (which I missed because of illness, isn't it ironic). This just goes to show what what happens when you refuse to be ignored. Names have been removed to protect the heroic from their employers. This is the aftermath of a meeting with Spector's aide:
Read below the fold...