Republican Tax Plan (a nothingburger with cheese)

[Magox]

Magox,

If you left "MMT" out of your post, the argument doesn't change at all. In other words, the end of the $ as reserve currency will happen regardless of whether we accept MMT or not. When will china, Japan, et al decide to no longer hold US treasuries?

 

A few other things. As I've said, taxes are also necessary to transfer purchasing power from the private sector to government. While MMT focuses on money, any good MMTer will emphasize real resources as the ultimate constraint on production and growth. We are getting closer to the point where additional claims by the government will be inflationary if not accompanied by a reduction of private sector claims (taxes).

 

Our current system of government finance operates as MMT claims, however we don't actively use it as Abba Lerner suggested through his theory of functional finance published in 1943, before any current MMTers were born. He stated we could use fiscal policy to achieve full employment (or reduce inflation) by increased deficit spending. The treasury should sell bonds to the extent they satisfy investor appetites, then print money to "fund" the difference. If inflation is the worry, then reduce deficits through higher taxes and lower spending. Note, the important idea is that deficits should be counter-cyclical, declining (and even in surplus) when at full employment, and rising when the economy slows. With the right set of policies, the deficit and debt would remain at sustainable levels over time.

 

There are of course problems. How do you actively manage the federal budget? You certainly don't want to be constantly toying with tax rates. It can manage demand-side inflation only. Relatedly, if we pursued a policy of full employment, then it would strengthen labor's bargaining position over time, and we certainly can't have workers getting uppity and demanding higher pay...

 

At the heart of MMT, and questions of fiscal policy in general, is political control of the economy To the benefit of a particular class.

 

Right, I eventually do believe that the US won't have the same role as it has today as the sole world's reserve currency. The difference however is if you continue a hyper money creation policy that two things would occur aside from the eventual loss of status of being the top dog.

 

A) The length and period of holding the belt as the world champ will be lessened. In other words we would lose our reserve currency status sooner than if we practiced more sound economic policy.

 

B) The fall would be from a higher place. Meaning, that unwinding of this mass exodus would be extremely painful more painful than a gradual degradation of a more orderly protracted exit.

 

In any case, both you and DS seem to be straddling with your positions. What sort of taxation are we looking at? What sort of Debt to GDP would be acceptable? What kind of spending are we talking about? We talking about spending to fuel growth via stimulus measures or are we talking about spending for social safety nets, health, etc?

 

For all I know, it seems as if you are essentially ok with the status quo, because in essence that is what we are already doing. Or are we talking about dramatically expanding the balance sheet?

[TPS]

 

Right, I eventually do believe that the US won't have the same role as it has today as the sole world's reserve currency. The difference however is if you continue a hyper money creation policy that two things would occur aside from the eventual loss of status of being the top dog.

 

A) The length and period of holding the belt as the world champ will be lessened. In other words we would lose our reserve currency status sooner than if we practiced more sound economic policy.

 

B) The fall would be from a higher place. Meaning, that unwinding of this mass exodus would be extremely painful more painful than a gradual degradation of a more orderly protracted exit.

 

In any case, both you and DS seem to be straddling with your positions. What sort of taxation are we looking at? What sort of Debt to GDP would be acceptable? What kind of spending are we talking about? We talking about spending to fuel growth via stimulus measures or are we talking about spending for social safety nets, health, etc?

 

For all I know, it seems as if you are essentially ok with the status quo, because in essence that is what we are already doing. Or are we talking about dramatically expanding the balance sheet?

It all comes down to my last point, politics. If one acknowledges that we are constrained by resources, not money, then we have to answer questions about where to direct those resources by government spending more money: bombs or healthcare? We could print the money to fund future obligations of SS and Medicare, but we wouldn't have enough resources to create the output to satisfy the financial claims (money) created (inflation would be the result). For me, the real problem with MMT is the political hurdle to accept that government does not need to borrow to spend. Once you get to that point, then the issues of how to put those resources to work, to what extent should government be involved, etc. come into play. And, absolutely, what you spend on has different impacts on long run growth.

 

And remember, government isn't printing paper when it spends; the Fed is electronically crediting the demand deposit of those who receive the spending. The spending is inflationary only if we can't produce more goods (real resources) to meet the increased spending.

[Tiberius]

And there you go

 

 

 

Trump and Schumer agree to pursue plan to repeal the debt ceiling

President Trump and Chuck Schumer, the Senate's top Democrat, have agreed to pursue a deal that would permanently remove the requirement that Congress repeatedly raise the debt ceiling, three people familiar with the decision said. Trump and the Senate minority leader discussed the idea Wednesday during an Oval Office meeting. One of the people familiar described it as a “gentlemen’s agreement.”

[Deranged Rhino]

So Pelosi and Schumer are Nazi appeasers now. Got it.

[DC Tom]

Yeah, my wife thinks having a no-limit Amex card is a great idea, too...

 

 

One of the people familiar described it as a “gentlemen’s agreement.”

Between Trump and Schumer? There's some irony for you...

[Doc Brown]

 

And there you go

 

 

 

Trump and Schumer agree to pursue plan to repeal the debt ceiling

President Trump and Chuck Schumer, the Senate's top Democrat, have agreed to pursue a deal that would permanently remove the requirement that Congress repeatedly raise the debt ceiling, three people familiar with the decision said. Trump and the Senate minority leader discussed the idea Wednesday during an Oval Office meeting. One of the people familiar described it as a “gentlemen’s agreement.”

 

Well. Although amusing, I feel bad for our grandchildren.

[Tiberius]

Well. Although amusing, I feel bad for our grandchildren.

Why? You actually think the debt limit ceiling did anything other than allow right wing politicians to grandstand?

[/dev/null]

So Pelosi and Schumer are Nazi appeasers now. Got it.

Collaborators

[Dr.Sack]

Looks like Trump is drinking TPS & Dr.Sack's homebrewed MMT Kool-Aid. Deficits don't Matter, but not the way Commodore Cheney explained.

[grinreaper]

So Pelosi and Schumer are Nazi appeasers now. Got it.

I know, both of them could again become majority leaders under Hillary in the new Vichy government..

[Nanker]

Maybe this is the real meaning of covfefe

[DC Tom]

Looks like Trump is drinking TPS & Dr.Sack's homebrewed MMT Kool-Aid. Deficits don't Matter, but not the way Commodore Cheney explained.

 

Yeah, the biggest idiot in the country has your backs. It's a real feather in your cap.

[B-Man]

So Pelosi and Schumer are Nazi appeasers now. Got it.

 

Why? You actually think the debt limit ceiling did anything other than allow right wing politicians to grandstand?

 

Looks like Trump is drinking TPS & Dr.Sack's homebrewed MMT Kool-Aid. Deficits don't Matter, but not the way Commodore Cheney explained.

 

 

DON SURBER: A Deal Made Possible By Antifa’s Collapse.

 

The Democratic leaders cut a deal with Hitler, didn’t they?

 

Should not people be on the streets rioting in reaction to Neville Schumer and Nancy Chamberlain selling them out to the Devil?

 

I mean when it comes to demonizing and marginalizing people, no one has been called more crude names than The Donald.

 

And yet, here he was graciously allowing Schumer and Pelosi to visit him in the Oval Office and cut a deal to get aid to Houston without a political catfight.

 

The reason is the Democrats need this win. August was horrible for them. They revealed what ugly, hateful, mean, spiteful, and nasty people they are through their Antifa henchmen. . . .

 

Most Americans think little of the Confederate statues. Risking a civil war to tear them down seems unusually dumb even for Democrats.

 

It’s over.

 

The election is finally over.

 

Democrats finally have accepted the results.

 

Trump saw this, and cashed in on Wednesday. He is playing the Democratic Party leadership against the Republican Party leadership that for nine months have blown him off.

 

 

 

 

 

Hmm.

[Dr.Sack]

 

Yeah, the biggest idiot in the country has your backs. It's a real feather in your cap.

I don't identify with either party, I'm just happy to see the debt ceiling get raised.

[DC Tom]

I don't identify with either party, I'm just happy to see the debt ceiling get raised.

 

I didn't affiliate you with a party.

[grinreaper]

 

I didn't affiliate you with a party.

Well, a wake is sort of a party you know.

[Dr.Sack]

 

I didn't affiliate you with a party.

I understand your gold holdings will go down in value now.

[Tiberius]

Beginning to look like there will be no tax cut bill out of this Congress. All those Republicans that pretended to hold their noses and voted for Trump won't even get that. Nothingburger with cheese

[Dr.Sack]

Beginning to look like there will be no tax cut bill out of this Congress. All those Republicans that pretended to hold their noses and voted for Trump won't even get that. Nothingburger with cheese

Never say never. If the SCOTUS pick showed one thing it's when the GOP wants something they can deliver. I think Roe v. Wade is next.

[DC Tom]

Never say never. If the SCOTUS pick showed one thing it's when the GOP wants something they can deliver. I think Roe v. Wade is next.

 

Roe v. Wade is the real third rail of American politics. It's not going away.