Last week, Reps. Michael Honda, Keith Ellison, Raul Grijalva, Jan Schakowsky, John Conyers, Barbara Lee and Lynn Woolsey stalwarts of the Congressional Progressive Caucus (CPC) begged for mercy from “the Gang of Eight” in a letter.
Here's what they said and my commentary on their “loser liberalism.”
”Thank you for your work - past and present - towards solving one of the greatest policy challenges facing us today: the unsustainable path of our national debt. We appreciate the bipartisan and collaborative spirit with which you've approached your negotiations. . . .”
Thanks vanguard progressives for embracing the major premise of the austerity ideology, namely that the national debt is on an unsustainable path. I'm here to tell you that this idea is false and also terribly harmful to progressive aspirations to end economic stagnation and get everyone, who wants to be, employed at a living wage. You can't win an argument if you start by agreeing with your opponent's false premise. Read more about These Folks are Soooo Clever . . .
Alan Grayson's e-mail on Moody's warning that it might reduce the US's AAA rating, suggested that Moody's was either threatening a downgrade because it wants to get the Bush tax cuts for the rich extended, or, alternatively, that “Moody's is living in what Aristophanes called "Cloud Cuckoo Land."” He says this because Moody's is upset about the possibility that the US may go over the so-called “fiscal cliff,” even though if it did, it would theoretically result in $560 Billion of deficit reduction annually, without further legislative changes, and it makes no sense on the surface for a rati Read more about Alan Grayson's Right; But He Misses the Larger Point
(This Open Letter to Bernie Sanders was posted on November 20. I'm very glad I can now post it here on my favorite political blog.)
Today, you told the “Democrats stop caving in . . . ” to the interests of corporations, the tea party, wealthy individuals, and the Republicans in Congress. The only problem with your fiery statement is that you began it by “caving in” to them yourself. You did this by immediately legitimizing their frame of reference by saying:
“Here is something we all can agree on: Federal deficits are a serious problem.”
Here are steps the President can take to win the battle for full employment over the opposition of the Republicans.
-- First, tell Americans that they have A RIGHT to a job at a decent wage with decent fringe benefits. If the private sector can't provide these jobs, then the Government must intervene to secure this right by implementing a Federal Job Guarantee (FJG).
My friend and MMT mentor, Warren Mosler offered this fine, simply stated speech to President Obama for September 8th.
My fellow Americans, let me get right to the point.
I have three bold new proposals to get back all the jobs we lost, and then some.
In fact, we need at least 20 million new jobs to restore our lost prosperity and put America back on top.
First let me state that the reason private sector jobs are lost is always the same.
Jobs are lost when business sales go down.
Economists give that fancy words- they call it a lack of aggregate demand.
But it’s very simple.
A restaurant doesn’t lay anyone off when it’s full of paying customers,
(Editor's note: I'm re-posting this here from moslereconomics.com with a follow-on commentary of my own with the permission of Warren Mosler)
From Warren Buffet to Alan Greenspan,
And from all the responses to the S and P downgrade by
economists and financial professionals from the 4 corners of the world,
THE WORD IS OUT!
The US government is the issuer of the US dollar.
So no matter how large the federal deficit might be: Read more about Connecting the Dots – Deficit Reduction Is Now Only About Inflation, Not Insolvency
Yesterday, must have been jobs day at The Washington Post since they ran two columns calling for job creation: one by Katrina vanden Heuvel and the other by Harold Meyerson. The crux of vanden Heuvel's column is: Read more about How do vanden Heuvel and Meyerson Expect Him to Get By "the Human Sacrifice Crowd"?
There have been many reactions to S & Ps action in downgrading the credit rating of the US, Apart from the widespread annoyance and repudiation of S & P and its procedures, there are some who are saying that it won't have much effect on interest rates. Others even saying that it is a “non-event,” and still others saying that S & P should be investigated and prosecuted on a number of grounds. However, I found two views of the “non-event” particularly interesting. Read more about Still Superman?
Last December, my friend beowulf had this to say at the time Moody's began to make noises about downgrading US debt. He said:
”I don’t think we’ll see Moody’s or any other rating service based in the US ever downgrade US Treasuries. It would cause a tremendous amount of financial loss and would leave Moody’s and its executives exposed to criminal prosecution. If I were Moody’s general counsel, I’d tell the CEO in no uncertain terms, Do Not Tug On Superman’s Cape.
14th Amendment, Sect. 5
Yesterday, we actually ran over the debt ceiling of $14.294 Trillion by $50 Billion or so, which means that the Treasury has issued $52 Billion more in debt instruments than is allowed by Congress's debt ceiling, which, in turn, means that the current Administration stands in violation of the Law. In reply to this, some will say that the debt ceiling is unconstitutional so the President doesn't need to observe it. However, in the present context, I don't think that's true. Here's my argument. Read more about President Obama: Stop Breaking the Law; Use Coin Seigniorage
An Open Letter to Bernie
If you're really tired of the bullying then I think you need to stop believing in and start denying the basic premise the Republicans, the Blue Dogs, most Democrats and the Administration are all using to bully you and us into agreeing to spending cuts in key discretionary programs and entitlement programs, and also into not moving for more spending on jobs, better entitlement programs, including Medicare for All, and better discretionary programs we need to solve our many national problems. That premise is that the United States of America, the issuer of its own fiat currency, and the ultimate source of all US Dollars can run out of the money needed to continue to deficit spend and to pay its bills. Read more about Bernie Says: “. . . We're Tired of Bullying . . .”
I don't really mean to single out Gallup here. Well, I guess I do; but they're certainly not the only guilty party in the polling industry of doing what I'm about to rail against. Let's begin by stipulating that public polls cannot escape ideological and selection biases in how they frame questions and alternative closed end response choices. Nevertheless, if poll results are to be considered even minimally descriptive of public opinion, they must make a concerted effort to include multiple frames and not exclude response choices that go beyond the dominant ideology. After all what good are polls that channel opinion in pre-determined directions compared to those that allow respondents to express their own tendencies? Read more about Gallup Scores Another for the Plutocracy
As the United States Government approaches “running of money” to pay its bills, news articles and pronouncements by politicians about the debt ceiling dispute focus on several things. First, they talk about the dire consequences of defaulting on our obligations. Second, they talk about the need for spending cuts that will put us on a long-term path to balancing the budget, getting a Government surplus, and improving the debt-to-GDP ratio. Third, they talk about the debt ceiling preventing the Government from issuing further debt instruments to “fund” paying for its obligations. Read more about Brinksmanship On the Debt Ceiling
(Author's Note: In December I posted a piece on Moody's threat to downgrade the US's Rating in International Bond markets. I argued that Moody's action was foolish. Today, Standard and Poor's actually revised the US ratings outlook from stable to negative, but continued its sovereign credit rating at ‘AAA/A-1+’. Read more about Standard and Poor's: Bring It On!
(Author's note: I've offered this idea a couple of times over the past few months here, with surprisingly little reaction. I'm trying once again, because I'm persuaded that much of the leverage that conservatives and Republicans have over our fate is due to the belief that most people hold that federal deficits, the national debt, and the GDP ratio are important, and that we must bring them under control to avoid Government insolvency. In addition every one seems to believe that the existence of the debt is due the to the profligacy of the Government, its monumental waste, and the lack of courage of its politicians who spend too freely to please constituents, gain campaign contributions, and help themselves to stay in office. None of this is true. The current existence of the National Debt, and also of a non-zero public debt-to-GDP ratio is the inevitable result of a technical decision that Congress has made about how the Treasury should finance its spending. This post talks about that decision, points out that its consequence is the National Debt, and also points out that the very existence of the National Debt is the fault of Congress.)
It is Congress's fault that we have a national debt at this point in our history. And also Congress can largely get rid of this debt over a 10 year period any time it wants to.
The national debt exists today because when the nation went off the Gold Standard in 1971 and adopted its fiat currency system, Congress did not repeal its mandate, very appropriate when our currency was convertible to Gold on demand, in least in theory, requiring that the Government back all its deficit spending with already existing borrowed dollars whose convertibility was covered by our holdings of Gold. This Congressional mandate to borrow funds by issuing debt instruments when the Government deficit spends, is what has caused the national debt to persist.
Had Congress repealed it when President Nixon took the country off the Gold Standard, and had we ceased to issue debt at that time, then the Government would have re-paid all of our 1971 debts as they came due, and our national debt today would be zero and our debt-to-GDP would now be at 0%.
The Congressional mandate to issue debt when the Government deficit spends has no useful function today, and the interest income it provides for mostly wealthy investors and foreign Governments who buy Treasury Securities is simply a form of welfare for the rich. In fact, it is welfare that will cost the Treasury almost $12 Trillion over the next 15 years if we continue the policy of issuing debt instruments. Read more about Once Again, the National Debt Is Congress's Fault