solvency

Well, the legislation implementing “The Buffett Rule” has been voted down in Congress as we all knew it would be. But so what? The Federal Government doesn't really need your money, since it can generate all the money it needs to pay off the national debt and also close any gap between tax revenues and Federal spending that Congress may want to legislate for the foreseeable future.

There's no problem of Federal solvency. There hasn't been since 1971, when the US went off the Gold Standard! The idea that we risk insolvency is just a fantasy of people who won't acknowledge that the US Government is the monopoly supplier of fiat currency to the non-Government sector of the economy, including all of the private sector.

However, even though your money isn't needed by the Government, it is very badly needed to help fund two things, I'll describe below. But, before I do that, since your patriotism has moved you to advocate for higher taxes for yourselves, I hope and expect that you will be motivated to spend the same amount in the two areas of activity where your money is most needed and would be much more effective in bringing the United States back to the state of a healthy democracy, than it would be if you and and other similarly situated patriots paid it to the Government in taxes.

I know you've frequently heard the Republican response to your proposals for higher taxes on very wealthy people like yourselves, namely that if you're so sure that higher taxes on the very wealthy are the right thing to do, then you can always contribute the additional money to the government, if you really want to. Well, my view is that you can equally well, and with much greater effect on restoring fair and effective functioning to our democracy, contribute that money directly to activities that will change key background conditions that are driving our democracy towards plutocracy right now. Here are the two areas of activity. Read below the fold...

It was very welcome to see The Washington Post cover MMT with a reasonably favorable post by Dylan Matthews, published on Ezra Klein's blog called “You know the deficit hawks. Read below the fold...

(Author's Note: This post updates Part One of a series reviewing Warren Mosler's book: The 7 Deadly Innocent Frauds of Economic Policy. The updating is prompted by a post by Hannah at DailyKos offering a “. . . a Review Sort of” of Warren's book. Read below the fold...

In a comment on another post of mine, Kelly Canfield, a blogger and commenter at FDL, asked me for the following.

What I would appreciate is a simple, 3,4 bullet point method as to why I should support, and more importantly, tell others that MMT is superior to the Keynes theories which I have pointed out and illustrated to others before this current situation.

I can easily explain that the private sector is not providing demand, and that the Fed sector should, and people would be better off with demand stimulus.

Explain to me how I EXPLAIN that MMT is superior to that basic premise, if it is?

Not sure I want to do that in three or 4 bullet points. But what I will do is to state what I think are some differences that are very significant for policy activism between a Keynesian approach employed by people like Paul Krugman, Brad DeLong, and Robert Reich and a Modern Monetary Theory (MMT) approach employed by people like Warren Mosler, L. Randall Wray, Bill Mitchell, Jamie Galbraith, Stephanie Kelton, Marshall Auerback, Scott Fullwiler, and Pavlina Tcherneva. So, here are some contrasts between the two approaches on seven important issues. Out of these contrasts, there should be much material for short explanations about why MMT is superior to Keynesian approaches. [Readers? -- lambert] Read below the fold...

An awful lot of Congresscritters lately have been threatening to refuse the raise the debt limit unless legislative programs whose funding has been previously authorized and appropriated is re-negotiated. Of course, new tea party representatives have been threatening this daily. But, the latest to join the tea-party parade is Senator Lindsey Graham who says:

GREGORY: Let me break a few of those things down because it’s important, the level of detail. Let me start with this. You talk about the budget. You talk about spending. How will you vote on the debt ceiling? Will you vote to raise it which is a vote that will come up in relatively short order?

Read below the fold...

In "All Together Now: There Is No Deficit/Debt Problem,” I warned against the message calling for deficit reduction that the President will probably deliver in his State of the Union Address next month. I argued that there was no deficit/debt problem and that it is essential to reject the President's framing of the issue and move on cope with the real problems of the economy and American Society. That piece stands alone. Read below the fold...

In a little more than a month, the President will give his State of the Union speech. There's every reason to believe that, in it, he will state that, in all sincerity, he believes that the United States Government has a deficit problem and a national debt problem that must be brought under control.

He will tell us that the Government is running out of money. He will also tell us that we need to raise money by either taxing or borrowing to get more, or that we need to make do with no more money by cutting government spending, and he may also tell us that we cannot borrow too much more without the bond markets raising our interest rates, imposing even more of a deficit/debt burden on us that our grandchildren will have to repay. Read below the fold...

By

Marshall Auerback

Hint: it’s not Republicans.

Social Security remains one of the greatest achievements of the Democratic Party since its creation 75 years ago. Although Republicans have historically fulminated against the program (Ronald Reagan once

onald Reagan">likened

Paul Krugman, well-known for his opposition to the austerity concerns of the deficit terrorists and his advocacy of additional Government stimulus to lower unemployment and end the recession, just ignited a paradigm conflict which promises to clarify for many, the issues dividing “deficit doves” like Paul, from economists who take a Modern Monetary Theory (MMT) approach to economics, which holds Read below the fold...

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...

This is the third and last in a series of posts based on youtubes from a speech in Milford CT by Warren Mosler. Warren is running for the Senate in CT in the Independent Party primary. Unlike both the Democratic and Republican candidates Warren really understands economics and his forté is explaining it to people. Here's a youtube following on the last one I blogged about. My earlier post covered Warren's policy proposals. This one considers the question “How are you gonna pay for it?”” Read below the fold...

Warren Mosler is running for the Senate in Connecticut in the Independent Party primary. Unlike both the Democratic and Republican candidates Warren really understands economics and he's really brilliant at explaining it to regular folks. Here's a youtube on why we never have to worry about having enough money to repay the Chinese, or ant other nations that are holding US Dollars. Read below the fold...

One characteristic of modern political and economic discourse is frequent asserting of beliefs about economics and money that have been variously described by some observers as 'myths', 'scares', Read below the fold...