An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
I am having a hard time reading how this "fiscal cliff" (metaphor: tip-off) is related to raising the "debt ceiling" (metaphor: tip-off)...
iow, "Fiscal Cliff" aside, I look at the real threat as us hitting this "debt ceiling" again (we are VERY close less than $200B) just like in mid 2011 and causing a big sell-off/slowdown until it was resolved in early August 2011...
If they solve the "cliff" does that automatically raise the "ceiling" or is the 'ceiling' going to become another moron pissing contest that we have to suffer thru again this year?
I am looking for insight into how these two issues are related and/or how govt policy that results over the next few weeks will address them BOTH but so far it only looks like the "cliff" is being addressed...
The "ceiling" might be actually more dangerous imo....
I think the ceiling and the cliff are two separate issues and i don't think solving one solves the other, so i agree with you that the ceiling is the bigger danger.
The debt ceiling won't be an issue according to these sociopaths.
According to Simpson-Bowles and their $3 dollars of spending cuts for every $1 of tax increases, as long as the yearly deficit targets are met then total debt will be allowed to grow "within those parameters".
Thus, if Greece is our guide, taxes will rise well beyond these wonks projections as the economy shrinks under this ridiculous, self defeating and self imposed austerity. When that doesn't work, government services will be slashed even more to meet these arbitrary targets.
Warren has a nice write up on Huff Post. You may want to double down on it. Also, for all those worried sick about printing money and inflation, we have now had four years of trillion dollar plus deficits and no inflation. Someone ought to notice that.
It's interesting how often we see the inflationista's haul out the QTM as their "proof" that money printing (money supply) causes inflation, yet none acknowledge the simple fact that all the variables in that equation are just that...VARIABLES. So raising the money supply tells you NOTHING about the direction of prices.
Didn't Reagan bring the inflation of the 70s under control? Didn't he create a massive deficit at the same time? Doesn't that disprove this inflation nonsense? Facts be damned! This is The Blaze!
There was this tv show where one of the characters says he is no longer allowed to do inventory at the store where he works because he can't count higher than 30. I feel like we are in a similar situation - Congress can't do it's job because it can't count higher than 16.4 trillion.
I had the CNBC on the XM yesterday and heard former Rep. Gephardt on and he sounded like he knew that both the "cliff" AND the "ceiling" were both significant issues (actually he sounded pretty lucid but I would note that he is no longer there....)
but he did not disclose any details about what the 2 sides were thinking as far as a policy end-game...
If they think that this is going to just work out like you point out (deficit will come down so they shouldnt have to raise the ceiling) they are VERY mistaken and the economy will suffer greatly...
Matt--I listened to Bowles and Simpson with Bartaromo yesterday. They both spoke of significant entitlement reforms under their awful plan. They didn't say cuts, rather reform. But there was a Democratic congressman on today @ CNBC who said the middle class will have to incur pain if the wealthiest have to. Not sure if he's a centrist or not. Good lord, I haven't heard one Democratic yet speak out that entitlements are off the table. Not one. That's very ominous.
The specifics of how this will work came form the B-S report itself and was distilled by someone at NC..I think. I'm paraphrasing, but it's close enough to how this is suppose to proceed. I'll find and link.
Obama is behind it and most of the party is behind Obama. Time for a giant letter writing, email, and petition campaign, and working to get enough progressive senators on board to tell the president no dice, that they will vote against him.
check out Table III-C you can see how the "debt" issued at the beginning of the the month was 16,222 and now it is only 16,205 so they have removed 17B of NFA so far this month and the market has taken a dump as entities have to liquidate other financial assets in order to obtain the $NFAs needed for settlement....
If they dont lift this ceiling we may be headed for a "liquidation only" marketplace just like we have been experiencing so far this month (S&P down 5%) as the non-govt is FORCED to liquidate in order to acquire the $NFA legally required for settlement of taxes and business transactions...
Matt -- The only linkage between the debt ceiling and the "fiscal cliff" is that the "fiscal cliff" was a result of the debt ceiling argument. And I agree, that the debt ceiling is the bigger threat, but I am deeply concerned about the Democrats TOTAL abandonment of the social safety net.
Malmo -- "Reform" is code for cuts. The politicians keep saying they won't make changes that affect current recipients or anyone over 55. However, one of the proposals is to change the way COLA's are calculated that would cause immediate and significant reductions in the benefits of current recipients.
And I would point out that europe doesnt face this problem because although they have the Maastricht Treaty it is non-binding... they dont have a hard "debt ceiling" so Countries deficits are allowed to naturally increase anyway no matter what the morons may decree...
WE CANT EVEN DO THAT IF THE DEBT CEILING IS NOT RAISED...
Without at least an injection thru Bank Loans (which is NOT happening btwper the H.8) it looks like those with liabilities may have to liquidate here in the US.
I have yet to hear one mainstream economist, one that gets meaningful air time, even remotely allude to how our monetary system actually works, with the possible exception of Krugman. Just listened to Bernstein and Morici on The Cycle. They both talk like MMT doesn't exist. Have they ever heard about it from their ivory towers or are they so insulated that they've not crossed paths with it?
The more I see and hear from the pundits on this the more I realize the narrative is hopelessly slanted, and that the average person will be scared into supporting self defeating austerity as the only option available. Feels like the bottom of the ninth inning and we're down 20 runs. Makes me ill.
"Andrew Wilkow has made a huge name for himself in the world of conservative talk with his critically acclaimed radio show on SiriusXM Satellite radio, and now he brings his unique recipe of rational thought and indisputable facts to TheBlaze TV Plus."
"Time for a giant letter writing, email, and petition campaign,"
Or maybe just get a giant projector, and put the message up in big bold letters on the side of congress or the white house. something simple like...
Government Deficit = Private Savings
No time for much with the grand bargain in the works. We have to convince enough progressive senators to just say no. I don't think that putting pressure on the WH will do it, although the message needs to be sent strongly that if the grand bargain is struck the Democratic Party is on notice that there will be primary challenges against the Third Way DINOs in the coming elections in '14 and '16. Enough of this BS.
Just saw an article and film clip on Alternet of Bernie Sanders with a rather rousing speech against ANY reduction in Social Security, Medicare, or Medicaid.
I just watched your video rant on youtube. I have been a supporter of MMT, but people like you are a disgrace to the cause. It doesn't reflect well on a 50 year old man to sit in his basement with his iPhone on a tripod recording himself having a meltdown over some younger woman's boobs. Get a grip. Older men like you make me sick with your droopy balls. You must have to chase them away with a fly swatter mike
27 comments:
Mike,
Back to reality here...
I am having a hard time reading how this "fiscal cliff" (metaphor: tip-off) is related to raising the "debt ceiling" (metaphor: tip-off)...
iow, "Fiscal Cliff" aside, I look at the real threat as us hitting this "debt ceiling" again (we are VERY close less than $200B) just like in mid 2011 and causing a big sell-off/slowdown until it was resolved in early August 2011...
If they solve the "cliff" does that automatically raise the "ceiling" or is the 'ceiling' going to become another moron pissing contest that we have to suffer thru again this year?
I am looking for insight into how these two issues are related and/or how govt policy that results over the next few weeks will address them BOTH but so far it only looks like the "cliff" is being addressed...
The "ceiling" might be actually more dangerous imo....
rsp,
I think the ceiling and the cliff are two separate issues and i don't think solving one solves the other, so i agree with you that the ceiling is the bigger danger.
The debt ceiling won't be an issue according to these sociopaths.
According to Simpson-Bowles and their $3 dollars of spending cuts for every $1 of tax increases, as long as the yearly deficit targets are met then total debt will be allowed to grow "within those parameters".
Thus, if Greece is our guide, taxes will rise well beyond these wonks projections as the economy shrinks under this ridiculous, self defeating and self imposed austerity. When that doesn't work, government services will be slashed even more to meet these arbitrary targets.
Inmates are running the asylum.
Try to refrain from calling the attractive female staff bimbos. Ok?
Warren has a nice write up on Huff Post. You may want to double down on it. Also, for all those worried sick about printing money and inflation, we have now had four years of trillion dollar plus deficits and no inflation. Someone ought to notice that.
malmo
I you find any reports in the MSM (Politico, The Hill etc) that talks about that can you post them here please...
rsp,
Matt,
Heard them on CNBC yesterday. Might be linked over there? More particulars were at NC. I'll see if I can link them.
It's interesting how often we see the inflationista's haul out the QTM as their "proof" that money printing (money supply) causes inflation, yet none acknowledge the simple fact that all the variables in that equation are just that...VARIABLES. So raising the money supply tells you NOTHING about the direction of prices.
Didn't Reagan bring the inflation of the 70s under control?
Didn't he create a massive deficit at the same time?
Doesn't that disprove this inflation nonsense?
Facts be damned! This is The Blaze!
There was this tv show where one of the characters says he is no longer allowed to do inventory at the store where he works because he can't count higher than 30. I feel like we are in a similar situation - Congress can't do it's job because it can't count higher than 16.4 trillion.
Agreed Mike regarding QTM
Its like they never took a math class and dont live in the real world either.
Apparently we always spend money at a constant rate, and the supply of goods is always the same.
mal,
I had the CNBC on the XM yesterday and heard former Rep. Gephardt on and he sounded like he knew that both the "cliff" AND the "ceiling" were both significant issues (actually he sounded pretty lucid but I would note that he is no longer there....)
but he did not disclose any details about what the 2 sides were thinking as far as a policy end-game...
If they think that this is going to just work out like you point out (deficit will come down so they shouldnt have to raise the ceiling) they are VERY mistaken and the economy will suffer greatly...
rsp,
Matt--I listened to Bowles and Simpson with Bartaromo yesterday. They both spoke of significant entitlement reforms under their awful plan. They didn't say cuts, rather reform. But there was a Democratic congressman on today @ CNBC who said the middle class will have to incur pain if the wealthiest have to. Not sure if he's a centrist or not. Good lord, I haven't heard one Democratic yet speak out that entitlements are off the table. Not one. That's very ominous.
The specifics of how this will work came form the B-S report itself and was distilled by someone at NC..I think. I'm paraphrasing, but it's close enough to how this is suppose to proceed. I'll find and link.
Obama is behind it and most of the party is behind Obama. Time for a giant letter writing, email, and petition campaign, and working to get enough progressive senators on board to tell the president no dice, that they will vote against him.
You can see the effects of that policy simulated over the first part of this month:
https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=12111400.pdf
check out Table III-C you can see how the "debt" issued at the beginning of the the month was 16,222 and now it is only 16,205 so they have removed 17B of NFA so far this month and the market has taken a dump as entities have to liquidate other financial assets in order to obtain the $NFAs needed for settlement....
If they dont lift this ceiling we may be headed for a "liquidation only" marketplace just like we have been experiencing so far this month (S&P down 5%) as the non-govt is FORCED to liquidate in order to acquire the $NFA legally required for settlement of taxes and business transactions...
I dont think this is generally realized...
rsp,
Matt -- The only linkage between the debt ceiling and the "fiscal cliff" is that the "fiscal cliff" was a result of the debt ceiling argument. And I agree, that the debt ceiling is the bigger threat, but I am deeply concerned about the Democrats TOTAL abandonment of the social safety net.
Malmo -- "Reform" is code for cuts. The politicians keep saying they won't make changes that affect current recipients or anyone over 55. However, one of the proposals is to change the way COLA's are calculated that would cause immediate and significant reductions in the benefits of current recipients.
And I would point out that europe doesnt face this problem because although they have the Maastricht Treaty it is non-binding... they dont have a hard "debt ceiling" so Countries deficits are allowed to naturally increase anyway no matter what the morons may decree...
WE CANT EVEN DO THAT IF THE DEBT CEILING IS NOT RAISED...
Without at least an injection thru Bank Loans (which is NOT happening btwper the H.8) it looks like those with liabilities may have to liquidate here in the US.
Rsp,
"I must be a masochist!"
Did you mean to say a narcissist?
Hey, are you going to be regurgitating some of Mosler's work again?
Mike,
Best way to deal with the QTM is to restate the equation.
QP = VM
That really winds them up because they read the equality as implication.
Stating it in a fashion that implies the quantity of output helps move the money around drives them nuts.
I have yet to hear one mainstream economist, one that gets meaningful air time, even remotely allude to how our monetary system actually works, with the possible exception of Krugman. Just listened to Bernstein and Morici on The Cycle. They both talk like MMT doesn't exist. Have they ever heard about it from their ivory towers or are they so insulated that they've not crossed paths with it?
The more I see and hear from the pundits on this the more I realize the narrative is hopelessly slanted, and that the average person will be scared into supporting self defeating austerity as the only option available. Feels like the bottom of the ninth inning and we're down 20 runs. Makes me ill.
"Time for a giant letter writing, email, and petition campaign,"
Or maybe just get a giant projector, and put the message up in big bold letters on the side of congress or the white house. something simple like...
Government Deficit = Private Savings
It's not great that people have to resort to gimmicks, but it might get the message out a little more.
"Andrew Wilkow has made a huge name for himself in the world of conservative talk with his critically acclaimed radio show on SiriusXM Satellite radio, and now he brings his unique recipe of rational thought and indisputable facts to TheBlaze TV Plus."
Hahahahahahahahaha.
tom, there is this http://americablog.com/2012/10/lame-duck-social-security-reference-post-how-to-take-action-now.html
are you sure that the site is called blaze, and not blazed?
"Time for a giant letter writing, email, and petition campaign,"
Or maybe just get a giant projector, and put the message up in big bold letters on the side of congress or the white house. something simple like...
Government Deficit = Private Savings
No time for much with the grand bargain in the works. We have to convince enough progressive senators to just say no. I don't think that putting pressure on the WH will do it, although the message needs to be sent strongly that if the grand bargain is struck the Democratic Party is on notice that there will be primary challenges against the Third Way DINOs in the coming elections in '14 and '16. Enough of this BS.
Thanks for providing the link, dave. All the info is there.
Just saw an article and film clip on Alternet of Bernie Sanders with a rather rousing speech against ANY reduction in Social Security, Medicare, or Medicaid.
http://www.alternet.org/economy/bernie-sanders-fiery-speech-do-not-cut-social-security-medicare-or-medicaid
I just watched your video rant on youtube. I have been a supporter of MMT, but people like you are a disgrace to the cause. It doesn't reflect well on a 50 year old man to sit in his basement with his iPhone on a tripod recording himself having a meltdown over some younger woman's boobs. Get a grip. Older men like you make me sick with your droopy balls. You must have to chase them away with a fly swatter mike
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