Wednesday, April 6, 2016

The deficit is now $73 billion larger than last year and growing.

The deficit for the fiscal year is now $535 billion. That is $73 billion above same time last year. (Figures compiled right from the Daily Treasury Statement.)

Federal Deficit

The deficit is rising, folks. What are all the "deficit is too small" people going to say when they find out? (Maybe send this to them, not that they will change their tune.)

You only get this info here and you know it.


Michael Norman said...

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Geoff said...

Hey Mike, given that you have sort of split from the MMT folks who focus almost exclusively on the govt deficit, maybe you should change the name of your report!

The Keynes Trader???

Michael Norman said...

"MMT" still has good caché. And what I am doing still is MMT.

Footsoldier said...

It's all MMT in the end Geoff.

MMT Top enders agree that by increasing spending ( the flows) then the deficit will increase.

Why Mike is so angry and what he points out is some top MMT enders have been predicting another Minsky moment for a long time and still do. However, the spending and now the increased deficit contradicts this view and has done for quite a while now.

It's a very, very interesting debate.

In my view as I've said before we should still work as a United front to get some power. There's way too many examples in history of grass roots movements and ideas being divided and conquered. Which ultimately means the original message gets diluted ot lost.

We are all on the same side after all and finally after a long time we are actually getting somewhere.

Footsoldier said...

I always think to myself what would the Neoliberals do ?

In this case I think they would debate this behind closed doors with each other and thrash it out to come to some consensus.

Then they would throw $trillions at the consensus to move their ideas forward.

We could learn a lot from how they got so much power.

Michael Norman said...

Foot and everyone else,

I have had this convo with Mosler and he doesn't want to listen. I tried. What can I tell you. Their wrong view discredits them and MMT.

TofuNFiatRGood4U said...

"The deficit is rising, folks. What are all the "deficit is too small" people going to say when they find out?"

$73 billion YoY is minuscule. What's the size of the output gap? Still over $1T? (Still, by implication, emasculating labor.) What else can correct that problem in short order, if you don't use federal deficit spending?

Are you talking about trading the market, or driving the economy to full employment?

Mosler has certainly talked about the stock market in the past, be he has also been talking about the lack of full employment (2.5% unemployment and 70% participation), and where he does not specify, I always assume his focus is on the latter.

I agree with Geoff--you are not talking normal MMT here. Wray, Kelton, Fulwiler, Tcherneva, Mitchell--I can't imagine any of them agreeing with you.

Perfectly fine with me if you want to say you're a 'modified' MMT site ... it worked for Volker and Monetarism after his first year at the FED (switching from a target of quantity of money, to the price of money, according to Mosler).

(I'd appreciate more details on that episode from your readers).

Charles DuBois said...

Higher deficits create higher private sector income. But for the economy and the markets it is the increase in private spending (consumption, investment) which counts. The higher govermment spending gets mostly spent by the recipients. The currently higher tax revenues come partly out of savings (for the "1%" etc) which does not reduce their spending. Hence, at times like these, the increase in spending is generally more useful to follow than the deficit per se.

TofuNFiatRGood4U said...

I understand and agree with you comment re: tax efficiency.

But without targeted deficit spending directed at the lower classes (via social security tax abatement or via a JG, etc), mass unemployment will never end.

From their perspective, the deficit is very much too small.

Bob said...

Are you talking about trading the market, or driving the economy to full employment?