In case you had any doubts that Obama was a fiscal hawk, a true fiscal conservative, who has done more to harm working people and the Middle Class than anyone before him (maybe with the exception of Bill Clinton, but he's close), then just look at who that backstabbing traitor in the White House wants as Speaker of the House. None other than Ayn Rand poster boy, Paul Ryan.
“The White House would like that idea,” Allen said during an interview with Laura Ingraham on her radio show today. “Because they would like one more win … what they’ve always told me is that they admire Paul Ryan for being a substantive, smart guy.
Yeah...right...a substantive, smart, guy. He thinks the government ran out of dollars.
Ryan, of course, is for cutting Social Security, ending Medicare and turning it into a voucher program and cutting taxes for the wealthy.
Obama never ceases to amaze how far to the right he can go and how deeply tied to the interests of the wealthy and big corporate he really is.
20 comments:
Perhaps it is purely a political decision. Paul Ryan might be able to bridge the gap between radical tea parties and more moderate republicans? I don't think Obama is endorsing Paul Ryan's political ideology, but he may believe that Ryan is a good choice to break up the disfunction in the Republican Party?
The best part of Ryan's so-called Medicare plan is that its nothing but Obamacare for seniors. They get a subsidy and get to "shop" for insurance in a "marketplace". You cant make this shit up. So instead of expanding medicare (a well liked and effective program) down the age cohorts, the Repubs want to expand Obamacare (which Repubs especially hate and is an ineffective program) up the age cohort.
Auburn one needs an advanced cognitive ability in systemic relationships and then an ability to assess equivalency in order to make the assessment you make here...
But I would say that Ryan's plan might actually be able to reduce govt spending by going away from a govt reimbursement scheme over to a "membership" type scheme where the providers can achieve scale economies based on how many members they have in the plan...
The way I look at the present scheme the providers cannot count on revenues because they have no true members in their network.... they are more or less just sitting there hoping someone with an illness or injury walks in off the street.... that is not very solid for business... vs. if you sign up 50,000 members for a year...
Might be like running a hotel vs an apartment building...
In his lame duck period Obama is pitching the donor class to fund his presidential library by ticking off their goodies list. It will only get worse as time ticks down on his administration.
Not the worst president ever through — yet. W still holds that title. But Obama is closing it.
Treating healthcare like a commodity is conservative foolishness based entirely on ideology. No developed country other than the US thinks it is good idea and conservatives want to take it even further over the cliff.
The liberal West is driving itself over a cliff, while China gets it.
BDL, Must-Read: Wi Yen: The Making of an Economic Superpower–Unlocking China’s Secret of Rapid Industrialization
"It's the demand, stupid." China gets that public sector can create demand at will fiscally.
At this rate, with them getting it and the West clueless, they are going to bury the West in record time.
Yep Tom, pretty sad the current state of affairs. They are so drunk of 'free market' and neoliberalism to the point they are throwing away all the competitive advantage over China and other nations.
Yeah and just letting our 20 somethings hovel in the same steel boxes that brought in the goods as part of the process that led to our economic demise....
Who needs the next dystopian novel cum movie series we have the real world as our stage...
I'm in a debate on youtube with a libertarian and a very anti libertarian, like me. Except the antis libertarian is mad at me for saying that governments borrow money from the private sector and then get the tax payer to pay the interest back. I said libertarianism was dead because governments can create the money, spend it into circulation through public services, and lower taxes as well. Taxes are only necessary to take excess money out of society if there is inflation, I said.
Anyway, the anti libertarian guy, whose side I'm on, went mad at me for saying that governments borrow from private sector and then tax us to pay back the interest. He said I was talking right wing BS. He has a lot of MMT stuff on his youtube site, so maybe he knows a lot more than me. He says the government creates the dollars and does need to raise the money from tax payer to pay the interest.
Many Tea Party people criticise the government for borrowing from private banks and charging the tax payer interest. But they have a completely wrong take on it. And they want to privatise the whole thing and get the country on a gold standard. I think this anti libertarian guy is confusing their argument with mine. What do people think. Am I'm right, or an I wrong about government borrowing and tax?
@ nivekvb
If a currency issuer issues its own currency, why would government "need" to get its own currency from users of it?
The government giveth and the government taketh away.
Interest payments are a portion of fiscal. Just because they are legal obligations doesn't change matter. Welfare transfers like SS are also legal obligations and the currency issuer never needs to get its own currency to meet the obligations in undertakes.
Where illusions arise is when taxation is hypothecated as is FICA in the US. When FDR "offset" SS with hypothecated taxation he was aware it was merely a ruse to make it seem that taxes were paying for the program. It's still a ruse.
See Luther Gulick —MEMORANDUM ON CONFERENCE WITH FDR CONCERNING SOCIAL SECURITY TAXATION, SUMMER, 1941
Another illusion arises from the accounting. In double entry accounting all accounts must be in balance all the time. So all uses of funds have sources. Sources are said to "fund" uses. Spending is use and taxation is a source on the books. When spending exceeds taxation, then another source of funds must offset. This is done through securities issuance, which includes the interest obligation. When interest is paid it is funded the same way‚ taxation or "borrowing."
However, there is a big distinction between government providing the funding itself or taking funds from the economy that are created by private lending. It's clear from the accounting that this never happens. It's also clear from the payments system that only operates in government liabilities instead of bank liabilities, that this cannot be the case.
The currency that government issues enters non-government through spending, transfers and interest payments. There is no distinction in how these are funded. They are funded by the government creating its own liabilities. Non-government can only obtain government liabilities either from Treasury directing the cb to credit nongovernment accounts or nongovernment borrowing from the cb. The cb uses monetary operations to ensure that the payments system always has enough liquidity to clear and the overnight rate is within the target of the policy rate.
@nivekvb,
"He says the government creates the dollars and does need to raise the money from tax payer to pay the interest."
He's wrong, and you're wrong: "[...] is mad at me for saying that governments borrow money from the private sector and then get the tax payer to pay the interest back."
The federal government creates the dollars. AFTER Congress appropriates the spending according to it constitutional duty.
Let me reiterate.
1. Congress authorizes spending. ["appropriates”] THAT’S FIRST. No money action without Congress.
2. The US Treasury then authorizes the Federal Reserve to put money equal to the amount of spending into the US Treasury's General Account at the Fed. The Fed adds the money with keystrokes.
3. The US Treasury authorizes the Federal Reserve to pay the vendors that Congress authorized spending to. [The Federal Reserve does this by paying the Fed Reserve account of the vendor's bank at the Fed for 'onward forwarding' to the vendor.]
NOW THE NATION'S MONEY SUPPLY IS INCREASED BY THE AMOUNT OF SPENDING THAT CONGRESS AUTHORIZED. This money is now swilling around in the real economy.
4. Two weeks or so later--could be sooner, could be later--the US TREASURY ISSUES TREASURY SECURITIES IN THE AMOUNT OF SPENDING THAT CONGRESS APPROVED.
Got that? The US Treasury issues securities equal to the amount of the congressional spending.
5. The US Treasury auctions these securities off to the public, domestic and overseas, and all businesses, households, and commercial and foreign banks, investors, and govts. Note: The Federal Reserve, the US Central Bank, cannot buy them from the US Treasury, or public auction. This auction is called "borrowing from the public" in some circles--the ignoramus circles--because people are exchanging their commercial bank savings (FDIC insurance only goes to 250Gs) for 100% risk-free US Treasury bonds/notes; no different than you buying a CD at your bank. Except your local bank doesn’t call it "borrowing from the public,” or "borrowing from the customer."
They call it selling you a CD, or issuing CDs.
AFTER THE AUCTION, THE NATION'S MONEY SUPPLY IS TECHNICALLY RETURNED TO BALANCE; inflation averted and all that. This all happens at the level of the federal government, the US Treasury, before the rest of the financial system is involved.
6. The US Treasury offers to pay interest to the public on its CDs (treasury securities). (This was what enticed the original 1%-ers during the 1920s to save in treasury securities, not gold. Gold doesn’t pay interest.)
7. Once a year around the August 30 or 31, the Federal Reserve reports to the US Treasury the total interest owed for the upcoming year on all treasury securities outstanding (some 30 years old).
8. The US Treasury creates treasury securities "Out of thin air" in the amount of the interest owed, and sells these, too, at auction.
THE FEDERAL TAXPAYER PAYS ZIP.
9. The global daily trade in US treasury securities is around $750 billion+.
Correct operationally, but I would not put it that way. It is really the appropriation bill that creates the spending as soon as it passed. The respective agencies simply carry out the operations IAW law and regs.
We say that "Treasury spends" but that is not actually correct. Congress directs the Executive to execute the laws it passes iaw other law it has passed some of which leave the Executive a certain degree of leeway to make specific regs.
But Article 1, section 9, clause 7 (Appropriations Clause) of the US Constitution states clearly:
"No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
Article 1, section 8 gives the fiscal power to the Congress and section 10 denies it to the states.
"The federal government" under the Constitution consists of the legislative, executive and judicial branches. The federal government "acts" through these branches iaw the US Constitution (separation of power, checks and balances).
Agencies are simply means through which the federal government acts. The agencies do act. The DOD doesn't go to war, nor does the military. The power to declare war is vested in the Congress. Congress may delegate some of that power to the discretion of the president due to emergency conditions, of course, and the US has conducted undeclared "wars" in the past, of course. But president always go to Congress within a short time to get approval for emergency actions and extending them.
A lot of the misunderstanding of MMT arises from failure to understand the legal and institutional background, for example, the argument over consolidating the Treasury and central bank under the federal government when this is stated clearly in the Constitution and settled by precedent. The federal government spends and taxes through its monetary-fiscal authority which the US Constitution lays out specifically as a power of the legislative brach with the check and balance of a presidential veto, that can also be overridden.
The transactions involving spending are not even initiated by the Treasury but by other agencies iaw appropriations. The invoices are sent to Treasury and the Treasury directs the Fed to pay them. The Treasury and Fed are way down the ladder of the hierarchy in government wrt what actually happens but in economics they are treated as if at the top. That is just incorrect.
"Agencies are simply means through which the federal government acts. The agencies do act." should read: Agencies are simply means through which the federal government acts. The agencies do NOT act."
Agencies are merely agents of the federal government, which is constituted of the three branches of government under the Congress, President, and Judiciary iaw the US Constitution as the founding document.
The biggest con ever was the using the language of household budgets to describe US Govt monetary ops instead of the language of commercial bank ops. Like MRW said, for some weird reason owing only to ideology and propaganda, the Govt and public consider issuing a TSY CD as akin to a household taking out a mortgage. When in reality, the Govt issuing a TSY CD is exactly like a commercial bank issuing a CD. And nobody has ever said publicly that when Chase exchanges some of its demand deposit IOUs for some term deposit IOUs that Chase is actually borrowing its own IOUs. Nobody thinks that the money supply is "sterilized" when M1 money goes into M2 money, but when the Fedral Govt does the exact same thing, for some reason the money supply shrinks in its entirety and that money is said to be sterilized. I cant think of any examples of something more twisted by ideology and propaganda than this.
I thought I would just pop back and have a look and there were all these replies. It's much appreciated. I still have some questions, but I will have to study the replies first. It's more complex than I thought. Could anyone recommend a good video. The Tea Party Right have loads but they are awful (and childish).
Anyway, I mentioned to this guy that Ellen Brown says the same as me on her site and I copied and pasted it. He said that if I take junk alternative medicine from her then I deserve to be confused. I thought that was a bit unfair because she is a very nice lady who means well. But the UK Positive Money group says the same thing too and I copied and pasted that, but he did not reply.
Now the first time I came across the fractional reserve system was in the Money As Debt, The Truth About Money, cartoon which blew my mind because I had no idea before then about this. I realised the ruling class were having one over on us, and that there was a way of having both social welfare and moderate fair capitalism together. The divide between them was false, because the ruling class wanted it all. Anyway. I watched the video again the other day and the guy who made it said the same as me about government borrowing from the private sector, which creates the money, not the government, and then taxing us for the interest. So I'm not the only one who is confused.
Anyway, I will study it all and come back, and if you can recommend a good vid it would be much appreciated. Many thanks.
Ellen Brown and PM groups are out of paradigm, even if mean well. EB may be closer to truth, but still out of paradigm AFAIK.
I agree MMT is weak at pedagogy using memes and videos compared to fringe groups (gold bug libertarians), but that's because it's easier to teach simple false concepts than reality, which tends to be more complex. Humans don't like complexity, they like grand explanatory narratives with not blurry lines where you can draw the lines between 'the good' and 'the bad'.
All what you mention is built around the idea of grand narratives, be them right wing nut-libertarians/gold bugs, or "money as debt!" conspiracy theories etc. The truth is much more painful: people is too stuck with their cognitive biases, grand narratives, ideological biases and lack of systemic understanding drowning us all into an spiral of stupid policy where intellectual misery can thrive.
You are on the good path though, keep the good fight up.
Maybe a quote from saltwater economist Mike Woodford can be of some help in that YouTube debate:
"A government that issues debt denominated in its own currency is in a different situation than from that of private borrowers, in that its debt is a promise only to deliver more of its own liabilities. (A Treasury bond is simply a promise to pay dollars at various future dates, but these dollars are simply additional government liabilities, that happen to be non-interest-earning.)
There is thus no possible doubt about the government’s technical ability to deliver what it has promised"
I agree with Bill Mitchell,Sovereign Currency issueing countries should end interest bearing debt issuance, as it is corporate welfare for the richest and foreigners and the financial sector.
Instead deficit spending could be facilitated by the Central Bank.Known as Overt Monetary Financing or what Stephanie kelton called Overt Monetary Financing of Government.
There was the handbag economics in the UK because Margaret Thatcher countries should be run like family budgets where you need to tighten your purse and not life beyond your means. Many people in the UK would believe it, but I argued that without borrowing you would never own your own home, most small businesses would never start, and most businesses would never expand. I knew nothing about MMT in those days.
When it came to running a business I have to admit I had trouble arguing with right wingers. It made sense to me that you would soon go out if business if you employed too many staff and paid them too much wages. After all, when I went shopping I always made sure I bought the cheapest.
So I started to argue instead that maybe society would be better off with 80% to 90% efficiency where people lives were easier rather than going at 100% all the time making it unbearable. But even a left wing journalist I liked started saying that the Right have won the argument on economics, but not on social issues. So I said this a few times to some people too, even though I hated it.
But now I read a MMT and find that not only are the Right wrong about how country should be run, but wrong about business too, in the sense that if wages get too low then the bottom falls out of the market. People just can't afford to buy anything, then you get a recession. It's much more fun arguing with the Right nowadays, except they usually don't, or can't, think too deeply about things so it might go other their heads. Mom's purse makes more sense.
I agree with Bill Mitchell,Sovereign Currency issueing countries should end interest bearing debt issuance, as it is corporate welfare for the richest and foreigners and the financial sector.
Instead deficit spending could be facilitated by the Central Bank.Known as Overt Monetary Financing or what Stephanie kelton called Overt Monetary Financing of Government.
Tom @ October 13, 2015 at 2:34 PM. Good one. Thanks.
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