I guess it falls to me to have to respond as no other Keynesians of any stripe seem to want to take a whack. He's clearly all but begging for a response.
[Scott Sumner:] "Yesterday I reported that RGDP growth in 2013 was running ahead of the pace for 2012, using either the official figures or the new Philly Fed GDPplus estimates.
Today we received another strong jobs number, which means that employment gains in the first ten months of 2013 are running at over 186,000/month, versus less than 183,000/month last year and 175,000/month in 2011."
"Given the predictions of the Keynesian model, anything even close to 2012 results would have been a win for MM. The Keynesian model predicted a sharp slowdown from the higher income/cap gains/dividends taxes, payrolls taxes, sequester, government shutdown, etc, etc. But we are running ahead of 2012, and even if the last two months are weak we will be essentially even."
"And yet on the Keynesian side of the aisle I hear a deafening silence. Where is the discussion of this great “experiment?” Could it be that academics and pundits only like to discuss experiments that validate their priors?
Warren Mosler to me via email:
Yoy takes out seasonals
A 12 month moving average IMO actually works much better.
ReplyDeleteMR. MM. RE. ABCT. FIT. NK. H.A.W.K. D.O.V.E. Oh, it doesn't matter what your out of paradigm ideology is! MMT wipes the floor with your candy asses! Team Bring It.
ReplyDeleteMatt Klein's analysis of the job market numbers was pretty slick. Nice little presentation, simple, easy to understand data & charts.... not trying to prove an economic model is right or fit projections.
ReplyDeleteVery well done by Klein.
ReplyDeleteMike N. has a nice comment about this over at Mike S' post...
ReplyDeleteGovt USD balance xfers to the non-govt is up YoY and WAAAAY up since the GFC...
ie in FY 2008, total withdrawals were $3.4T and in the FY 2013 just ended it is at $4.2T
So USDs injections are up almost $800b (25%) annually since before the GFC this is the only thing keeping the wheels on the wagon right now... WHO CARES about 'the deficit' imo....
Here's Sumner here attacking the 'Keynesian' position so-called: "The Keynesian model predicted a sharp slowdown from the higher income/cap gains/dividends taxes, payrolls taxes, sequester, government shutdown, etc, etc. "
OK, as far as this part: "sequester, government shutdown," Sumner doesnt even know what the heck is even going on the govt USD injections are UP yoy Mike has the data on that so checkmate there...
And as far as this part: "higher income/cap gains/dividends taxes, payrolls taxes,"
All this does is perhaps result in a change to the cet par 'deficit' ie non-govt SAVINGS and SO WHAT! Savings is a leakage anyway...
Here is MMTer Bill Mitchell on the deficit: "I would urge you to re-educate the audiences into realising that the deficit is irrelevant and they should be talking about the extra spending and jobs that are required. The deficit will be whatever it is – a win-win – the nation reduces unemployment and at the same time rids itself of a major neurosis (worrying about irrelevant sets of numbers)."
So checkmate again! (except for morons...)
rsp,
What is keeping dollar transfers from government higher despite the smaller deficit?
ReplyDeleteRyan,
ReplyDeleteGovt spending is not dependent on taxes...
Govt spends first and then collects the taxes...
So govt can spend whatever it may.
Rsp
"Govt USD balance xfers to the non-govt is up YoY"
ReplyDeleteWhat is a balance transfer to the non-govt then? I mean specifically, what is included? Bonds? expenditures? Transfer payments? Tax credits? Is it net of taxes?
Ryan,
ReplyDeleteIt includes imo everything except US Treasury Redemptions as a redemption is just moving previously injected USD balances from "the savings account to the checking account"...
Its not 'net of taxes' as that would violate the 'arrow of time', this process is 'asynchronous' (see Neil Wilson on this) as 'govt spends first and THEN collects the taxes'... so it is not correct to say 'deficit spending' as the deficit is measured ex post and spending is done during the here and now...
It includes both govt consumption and investment as well as xfers... ie TOTAL $NFA injection...
Here is the NIPA wiki on part of this: "In National Income Accounting, government spending, government expenditure, or government spending on goods and services includes all government consumption and investment but excludes transfer payments[1] made by a state."
So throw in the xfers and then you get to see what the govt is actually doing as far as USD injections into the non-govt sector.... this is the number that is actually UP (albeit a tiny amount) YoY...
consumption is being minimally sustained by this slightly increasing injection.
rsp,