The Peter G. Peterson Foundation (PGPF) and its allied army of associated deficit hawks want the Congressional Budget Office (CBO), the General Accountability Office (GAO), and the Office of Management and Budget (OMB) to do fiscal gap accounting and generational accounting on an annual basis and, upon request by Congress, to use these accounting methods to evaluate major proposed changes in fiscal legislation. Generational Accounting is an invalid long-range projection method that doesn't take into account inflation, the projected value of the Government's capability to issue fiat currency and reserves in the amounts needed to fulfill Congressional appropriations, and re-pay its debts, the projected non-Government assets corresponding to government liabilities, the likely economic impacts of Government spending, surpluses, and deficits, the impact of accumulating errors on projections, and the biases inherent in pessimistic AND contradictory assumptions. It is a green eye shade method that ignores both economic and political reality.
If you want America to end deficit terrorism and austerity, and to have the fiscal policy space it needs to begin to restore the American Dream, then you need to defeat proposed policies or legislation which puts building blocks in place to bias fiscal policy towards austerity and the economic decline it will surely produce for ourselves, our children, and for their children. Proposed policies and legislation of this kind must be defeated for the following seven reasons. Read below the fold...
Some time ago, in the pages of USA Today, Duncan Black, better known to some as Atrios voiced the immediate need for increased Social Security benefits of 20% or more even if it means raising taxes on high incomes, or removing the payroll tax cap on salaries.
Black is right about the need for increased benefits; but legislating that increase doesn't require increasing taxes. In fact, Congress should both increase benefits and remove the payroll tax entirely.
But how is that possible without greatly increasing “the national debt”? The answer to that one is easy. Don't tax or borrow to pay for it. Just mint a single one oz. platinum coin at the beginning of each fiscal year with a face value large enough to cover expected the cost of SS payments. Doing it that way will both take care of retirement needs and also provide a huge shot in the arm for employment, since the increase in Social Security benefit payments and the ending of the payroll tax won’t be offset by tax increases elsewhere that will depress aggregate demand. Read below the fold...
The MMT Uptake Problem
Proponents of the Modern Monetary Theory (MMT) approach to macroeconomics have had many successes since the approach was first synthesized in coherent form by Warren Mosler. There have been successful predictions of economic conditions: much work showing that the historical record accords with the MMT point of view, rather than the views of other approaches and paradigms, and also many instances where representatives of other approaches to economics have suddenly begun to use economic views first put forward by MMT economists.
So, it's surely true that MMT has been making progress in its quest to become the dominant economic paradigm guiding macroeconomic and fiscal policy in nations. But for some of us writing about issues relating to MMT progress seems painfully slow. A big part of the reason for slow progress is the difficulty of getting MMT views into the mass media consistently, which is seen as a necessary step in getting them popular currency. Read below the fold...
Before the “no” vote on Scotland's independence, The New York Times, carried a post by Neil Irwin in the Upshot making the point that the then upcoming vote “shows a global crisis of the elites.” He argues that the independence drive reflects “. . . a conviction — one not ungrounded in reality — that the British ruling class has blundered through the last couple of decades.” He also thinks that this applies to the Eurozone and the United States to varying degrees, and is “. . . a defining feature of our time.”
Irwin then updated his first post last night, expanding it and recognizing the victory of the “no” votes in the referendum. His new post did not add anything essential to his “global crisis of the elites” diagnosis, so the references and quotations below come solely from his pre-vote post. But the points made apply equally well to his update.
To summarize his argument, for decades now, the elites in major modern, industrial nations have committed leadership blunders and created great discontent among the citizens of their nations, to the point where their polices have contributed to damaging their economies seriously, and the rise of popular resistance embodied in extremist parties and independence movements. Elites have had vast power, but have not lived up to their responsibilities to serve the people of their nations. Discontent with their actions and results is so high that many are questioning the legitimacy of the very governing institutions that claim to serve them, and are exhibiting a greater and greater willingness to do something about these institutions and the policies that they and the elites are generating. Scotland is but one example of that, and his implication is that more examples are in the offing.
It's significant, some might say even remarkable, that Irwin's article appeared in The New York Times, since it is a flat out criticism of elite leadership over a number of decades and a warning to elites to improve their performance or deal with the consequences. But I think it still misses the most important question. That question is whether there is a global crisis of elites or a global crisis of democracies? I'm afraid I think that the crisis of elite leadership is only a symptom of the underlying cause of a broader global crisis of democracy. Read below the fold...
Unlike some I still have a thin shred of hope in the power of the ballot because I don't think people are stupid as a whole, just slow to learn and easily influenced.
We've had 40 years at least to prove that neo-liberal, trickle-down, perfect market economics do not work. They have demonstrated failure in tangible ways that show up at your dinner table every day as you CCPI substitute pet food for people food and wear out your cheap off shored rags in weeks and not years. Your quality of life is declining and it's harder to disguise.
This is not the inevitable increase of entropy, it's the result of management decisions made by our government to enrich our elites at the expense of everyone else.
Fortunately conditions like this do not persist. Whenever there are too many of us and not enough of them there is a revolution. The propaganda becomes repetitive and unbelievable, the cognitive dissonance too much to overcome.
You are not alone. Millions of people see the same things you do, think the same things you think. Including the elites, that's why they are worried and are investing so heavily in more propaganda and more coercive tools for the suppression of mass sentiment. Submit to the charms of illusion or the iron boot of oppression, it matters not as long as you submit.
But ultimately they are dependent on your voluntary submission. They make the calculation that they can distract you with bright and shiny objects or so disillusion you that apathy seems rebellion.
My cynicism is dark and deep, but not that deep. Nope, I'm actually an optimistic sort of guy- not that it does any good.
I think that politicians, who remain at least nominally subject to a process of public approval, and pundits/media news people, who are more directly and immediately dependent on their audience, are open to influence from the populace and ignore it at their peril.
Ways to show that are by showing up at the polls and voting Third Party, changing your registration to a Third Party, or by voting for Third Party candidates like Teachout and Wu in major party primaries. If nothing else you can make Chuck Todd's head explode which is always fun.
I approach this incrementally and pragmatically. If we continue to vote for the lesser of two evils, it is still evil. If the current conditions persist more radical solutions than mine will gain urgency.
If I seem like a centrist, I AM! My beliefs are rooted in the core of New Deal Democracy and Keynesian Economics. It is Andrew Cuomo and his corrupt crony capitalism and double dealing 'bi-partisanship' that prop up the corpse of the New York Republican Party as a Boogieman too scary to dare deserting a Democratic Party that has abandoned every principle and promise.
I am not afraid.
I'd prefer that it not come to pitchforks and torches because I'm more comfortable not being poked and fire has a disturbing tendency to spread beyond your magical circle of intent, but you use the tools you have and if you doubt their efficacy in a modern environment I invite a closer study of recent developments where overwhelming power has not produced the desired results. Humans are a recalcitrant and obstinate lot.
Should you live and vote in New York as a registered Democrat I invite you today to take positive action and indicate your disapproval of Andrew Cuomo and Kathy Hochul.
Vote for Zephyr Teachout and Tim Wu.
It is really the very least you can do. Read below the fold...
I'm interrupting my series on Government Real Fiscal Responsibility to being you this special post, on something Chris Hayes said relating to Real Fiscal Responsibility. Back in February of 2014, he tweeted:
— All In w/Chris Hayes (@allinwithchris) March 1, 2014
Recently, that tweet along with an image has been making the rounds on Facebook as an Alternet photo. The sound bite in the tweet looks great, after the manner of a logical truism.
But, logically, it doesn't follow, because one can easily say that as long as the Government implicit in the statement isn't a currency issuer, but a currency user who must acquire its funds by taxing or borrowing alone, that Government can involuntarily run out of funds. And it is conceivable that funds might be raised to fund a war, while that same Government might not have the funds available to take care of the people who fought for the nation, without defaulting on its obligations. Read below the fold...
This, the fifth post in a series evaluating the fiscal responsibility/irresponsibility of the Governments of the United States (mostly the Congress, the Executive Branch, and the Federal Reserve) by Administration periods, beginning in 1977 to 1981 with the Jimmy Carter period, will cover the performance of the Government on the environment and climate change aspect of “public purpose.” Posts 1, 2, 3, and 4, discussed some basic definitions and assumptions of the series and evaluated Government performance relating to economic stagnation, living wage full employment, price stability/inflation, implementing universal health care, and educational reform.
I've explained why fiscal responsibility is closely connected to the idea of public purpose, in this post prior to beginning the series. You'll want to read it, if you want to know what I mean by “public purpose,” and see what else that pregnant term includes, apart from enhancing the environment.
In the first post, I also claimed that the Government of the United States has been fiscally irresponsible in every Administration period since 1977, because its fiscal policies have largely worked against key aspects of public purpose. The first 4 posts supported that claim across 5 aspects of public purpose, as will this one. Future posts in this series will attempt to document it across additional aspects of public purpose. Read below the fold...
If you're reading this you've landed near but not at the beginning of my very lengthy series evaluating the fiscal responsibility/irresponsibility of the Governments of the United States (mostly the Congress, the Executive Branch, and the Federal Reserve) by Administration periods, beginning in 1977 - 1981 with the Jimmy Carter period. My first post explained why I chose to start my evaluation with the Carter period, and also laid out my related definitions of fiscal sustainability, and fiscal responsibility.
It explained why fiscal responsibility is closely connected to the idea of public purpose, which I laid out in this post prior to beginning the series. You may want to consult that post, if you want to know what I mean by “public purpose.” I also claimed that the Government of the United States has been fiscally irresponsible in every Administration period since 1977.
In my second post, I began by examining the problems of ending economic stagnation, and providing full employment at a living wage, and, I hope, by showing that the Government, during the Carter period, failed to solve either problem because of its commitment to deficit reduction, and budget balancing, in the service of hoped for inflation moderation. The third post in the series, examined how the US Government failed in its efforts to create and maintain price stability, and also failed to provide a solution to the problem of providing the right of receiving health care to every American in need. So, thus far in the first three posts in the series we've seen how the Government during the Carter period failed to 1) end economic stagnation; 2) failed to create and maintain full employment; 3) failed to maintain price stability; and 4) failed to maintain price stability. It did not fail however, to reduce the Federal deficit, which is not in itself an aspect of public purpose, but a presumed means of preserving government solvency, and avoiding inflation. So, I suppose congratulations are due the Government for solving a faux problem and failing to directly address the real ones.
So, from 1977 – 1981, the Government of the United States is thus far 0 for 4 when it comes to achieving real fiscal responsibility through fiscal policy in accordance with key aspects of public purpose. The remaining posts in this series will continue to document the claim that all the US Governments since 1977 have been fiscally irresponsible. In this, the fourth post in the series, I'll evaluate the Government's efforts at educational reform during the Carter period. Will the Government go 0 for 5? We'll see! Read below the fold...
Here's the third post in my series evaluating the fiscal responsibility/irresponsibility of the Governments of the United States (mostly the Congress, the Executive Branch, and the Federal Reserve) by Administration periods beginning in 1977 with the Jimmy Carter period. My first post explained why I chose to start my evaluation with the Carter period, and also laid out my related definitions of fiscal sustainability, and fiscal responsibility.
It explained why fiscal responsibility is closely connected to the idea of public purpose, which I've laid out here. I also claimed that the Government of the United States has been fiscally irresponsible in every Administration period since 1977.
In my second post, I began by examining the problems of ending economic stagnation, and providing full employment at a living wage, and, I hope, by showing that the Government, during the Carter period, failed to solve either problem because of its commitment to deficit reduction, and budget balancing, in the service of hoped for inflation moderation. The remaining posts in this series will continue to document the claim that all the US Governments since 1977 have been fiscally irresponsible. This, one, the third in the series, will examine how the US Government failed in its efforts to create and maintain price stability, and also failed to provide a solution to the problem of providing the right of receiving health care to every American in need. Read below the fold...
This post continues my series evaluating the fiscal responsibility/irresponsibility of the Governments of the United States (mostly the Congress, the Executive Branch, and the Federal Reserve) by Administration periods beginning in 1977 with the Jimmy Carter period. My first post explained why I chose to start my evaluation with the Carter period, and also laid out my related definitions of fiscal sustainability, and fiscal responsibility.
It explained why fiscal responsibility is closely connected to the idea of public purpose, which I've laid out here. I also claimed that the Government of the United States has been fiscally irresponsible in every Administration period since 1977. The remaining posts in this series, and they will be many, will document that claim with analysis.
In this second post, I begin my evaluation of the extent of fiscal responsibility or irresponsibility of the Federal Government during the Carter Administration by covering two of the primary problems reflecting public purpose, and what the Federal Government did or did not do about them with its fiscal and monetary policies. The two are: ending economic stagnation, and creating full employment at a living wage. Read below the fold...
This is the first in a lengthy blog series that will evaluate the US Government's record on Real Fiscal Responsibility, Administration period by Administration period, since the Administration of Jimmy Carter in 1977. In evaluating the US Government's record, it’s important to state clearly that I will be evaluating more than just each Administration and its activities.
The record of fiscal responsibility is not the product of the Executive Branch alone. It is the outcome of the interaction of the Executive with the two Houses of Congress and the Federal Reserve System, even on occasion the interaction of one or more of these with the Supreme Court. All bear joint, though not equal responsibility for the record of Government fiscal responsibility or fiscal irresponsibility, as the case may be, during each Administration period. Read below the fold...
This pilot project and the radio/video shows it will produce and place on the web is for everyone tired of hearing economic commentary from those who got everything wrong. For decades, the doctrine of "Fiscal Responsibility" interpreted as long-term deficit reduction and Government austerity has had a secure place in American politics. This doctrine is the economic equivalent of the medieval notion that patients must be bled to cure them of disease. And this truth is reflected in the economic history of the United States at least since 1976, when we first began to practice ideology-based austerity in its modern form by planning for deficit reduction and balanced budgets in order to decrease the debt-to-GDP ratio.
Yes, there were short periods of expansive GDP growth during the Reagan and Clinton Administrations, but when one compares job creation and growth rates across the decades, one can see from Table One, that new job creation and GDP growth during the 70s, 80s, 90s, and the first 10 years of this century don't compare to the 40s, 50s, and 60s of the 20th century. By comparison we've been experiencing a stagnant economy in varying degrees for more than 40 years now. Read below the fold...