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.
Sort of. Right here and here.
"Those who said he wants to buy debt and default on it are "crazy," he added.Read more: http://www.politico.com/story/2016/05/trump-no-debt-default-222957#ixzz48ArXoQE9 Follow us: @politico on Twitter | Politico on FacebookMeanwhile here is YahooCNBCSchiff:https://finance.yahoo.com/news/donald-trump-just-exposed-americas-210000595.html
I guess Schiff didn't read Trump's clarification before he shot off his mouth.
Paying off debt at discount would leave a positive NFA balance @ private sector but without the added income from rolling over the debt, hence torturing us over here with complains from Matt Franko as the private sector would be receiving on absolute numbers less income.However, if Trump comes with a better plan to tackle the cohort of savers Matt alludes to maybe he could spare us... meanwhile, we must keep in mind welfare queens living off bonds (foreign nations, corporations and the wealthy) and the bulk of middle class savers(because the poor objectively don't have any savings) alike thought the completely inadequate channel of centrally planned interest rates from the central bank, sight.
The debt doomsday crowd created an instant marketing scheme the next day Tom... At least Trump clarified on the Sunday shows...Too bad the MMT top-enders have surrendered their academic credentials and thrown in with Bernie who is not on the record with an equivalent statement and have thus now rendered themselves Schiff enablers...
Just establish foreign official reserve accounts at the Fed that yield NO interest...
You need to come up with a MATURE and NON-SOPHOMORIC transition plan that takes into account past policies like ERISA, SS, Medicare, etc...
Agreed, unfortunately Matt is right, people thinks that just because they saved some money in the past they are trained to expect free income regardless of risk taking. Until this is not the case any more (certainly won't be the case for future generations) we have to manage those affected or risk a higher suicide rate and increasing drug abuse from this cohort, as it's already happening.Maybe we could pay them investment classes with Mike Norman? Good business opportunity there Mike...
You need to come up with a MATURE and NON-SOPHOMORIC transition plan that takes into account past policies like ERISA, SS, Medicare, etc...It's called targeted transfer payments.
Agreed, unfortunately Matt is right, people thinks that just because they saved some money in the past they are trained to expect free income regardless of risk taking. Until this is not the case any more (certainly won't be the case for future generations) we have to manage those affected or risk a higher suicide rate and increasing drug abuse from this cohort, as it's already happening.The ability to this through fiscal is already available. It just needs to be used.No one has seriously recommend using monetary policy to benefit savers directly. That is not in the Fed's mandate, for example. It is not what cb's were instituted to do. Is any actually arguing that the Fed's mandate should be changed to include taking care of the interests of savers in setting interest rate policy?
@Tom maybe Matt, not sure..."targeted transfer" is what I have advocated too in the past, IDK how the USA system exactly works but over here is just the only right way to do it, apparently is also possible in USA no problem... This has been, more or less, the standard procedure until we started 'running out of money'.Otherwise (over here) you just are picking winners amongst private pension plans, sure there is a lot of (ex-)middle class who would benefit from this (disclaimer, I've family who would benefit from this, not personally), but is basically as Aurburn said elsewhere, give 4€ to rich welfare queens so 1€ falls to the targeted segment of the population.But as I said, not sure how it applied in the case of USA (although I'm sure the US govt has plenty of toools, or if not could create them, to put the money where it's needed, if there wa a real interest on doing this, instead of continuing with the status quo).
Donald Trump will do QE? Will Hilary now declare she'll be doing it too but more effectively? We assume Sanders will. What a potentially unexpected turn-up for a US Presidential election!See Appendix 2:-http://www.financeforthefuture.com/GreenQuEasing.pdfand the effect of its previous implementation in the UK:-http://www.taxresearch.org.uk/Blog/2012/07/13/the-untold-truth-about-quantitative-easing-is-it-simply-cancels-debt-and-that-means-national-debt-is-now-just-45-1-of-gdp/
Well tptb dont look at them as savers they look at them as "investors" or "lenders"... "banks intermediate!" etc...btw Trump has imo never still made this connection between savings and "the debt"... so this right there disqualifies him for "in paradigm".... until he would exhibit otherwise...MMT top ender lefties in the Bernie campaign should let Bernie get out in front of Trump in this regard as Trump has already revealed that we cant go bankrupt because we just issue the munnie... now Bernie can raise Trump one and make the connection with savings...Bernie could say, "Trump is right but here is what he still doesnt know... yada yada...."
Agree on what Bernie should do. He's not going to win the nomination at this point, but has already established his credibility. Time to use some of that political capital, or risk letting the Trump faction take over.
Raising interest rates is enormously unpopular with those borrowing munnie, like for houses, vehicles and durable, which is just a about everybody in the US. Higher rates increase the monthly nut and many people are already tapped out, so it would also result in reduced sales unless the savers spent what they received, which is unlikely because they are savers.
We could just regulate the rates Tom... same as the MMT "JG wage" would regulate that rate...
That Bernie has some MMT advisers does not mean he understands or agrees with (all?) MMT. Would be nice if he went in the open and said so.But at this stage you guys are crazy if think than a politician would acknowledge this stuff in public, you won't earn votes by promoting MMT ideas. People chooses to believe on the fairy tales of the mainstream and secretly want a pseudo-gold standard (like the euro).Bill M. is on Spain and a lot of the economists involved have links with one of the left political party (I may end up voting them now that I know), he has spoken with the leader of the party and has been in contact with his brother, lead economists (as did Wray), do you guys think they come out in the press saying stuff MMT would say? No, because they are not insane... They take doveish positions towards the debt and deficits, euro, austerity etc. but they will never present themselves openly with this positions because the public backlash is brutal, deep inside people wants to believe that their taxes actually pay for shit, period.Something like what Trump said is the closest a politician will come out in public talking about the national debt... but he didn't come out saying "because we print money we can just spend all we want as long as there is no real resources constraints", so people only understands the implications half way ("ok, we cna print our money, never need to default", but they don't follow to the last conclusion). And they don't quite understand it completely because the total amount shouldn't matter (what would you buy the debt at a discount at all instead of just keep rolling it over, makes no sense unless is a part of a more complex and deeper plan to just eliminate all the national debt and replace it with other scheme).It took my ages to convince close people, bombarding them over and over with the same messages until they acknowledged that debt doesn't fucking matter, and this was rational people you can argue with or are open to this information... no mini-Schiffs like a HUGE chunk of the population on both sides of the political spectrum are.
Why regulate rates wrt to economic conditions? Is there any solid evidence that rates affect the Fed mandate? It's a dogmatic belief based on false assumptions about monetary economics. Moreover, the Fed is authorized to conduct monetary policy to meet its mandate, not to favor special interests (like savers).The problem with using interest rates in economic policy is that there are winners and losers.The Fed should set the interest rate to zero and, if the government chooses to issue long-term bonds, it should also manage the yield curve to keep long terms yields low and stable since they are used as a benchmark for credit extension.As Keynes observed in the GT, the driver of the economy is investment and the driver of investment is effective demand. Low and stable rates encourage investment borrowing (inside money-net zero), and effective demand can be supported by fiscal policy accommodating demand leakage to saving (outside money -$NFA). This is Keynes's program in a nutshell.
makes no sense unless is a part of a more complex and deeper plan to just eliminate all the national debt and replace it with other schemeFor Trump's purposes, there is no need for some scheme. He is playing to the popular belief that governments are like households and being debt-free is the ideal. Voters love this and eat it up.The "buy back the debt at a discount" gambit is a brilliant political move. On the other hand, the platinum coin was an object of ridicule.
Sure people will buy into the notion of Trump being smart and re-negotiating the National Debt because he's a billionaire right? Of course, it will sail right over the top of their heads that he's effectively cancelling debt simply by getting someone in the Fed to press a few computer buttons. But heigh-ho smarts have always been in short supply!
It really depends on who says it. A whole lot of people are listening to Trump, and even though they don't understand the details, they believe that he will "pay off the debt" without raising their taxes.This is exactly the opposite of what the VSP have been telling them — the growing size of the debt will raise their taxes.But they believe Trump, or at least a lot of them do.Of course, the VSPs are going to try to convince them that Trump is wrong, but these people are already largely discredited in the eyes of the people they are trying to convince.It's all about persuasion. The ancient Greeks called it "sophistry."
But if Sanders publicly agrees with Trump on this, that might raise the issue to the point of serious disccussion. And that would be the beginning of the end of the deficit hysterity.
"But if Sanders publicly agrees with Trump on this, that might raise the issue to the point of serious disccussion. And that would be the beginning of the end of the deficit hysterity."Well it would seem they have more in common than perhaps they both realised but any rapprochement is dangerous for them both given the stupidity and viciousness in business, media and political circles. It will be interesting to see what transpires. Let's hope you are right and they can find a joint way of putting the deficit hysteria to bed once and for all.
"It took my ages to convince close people, bombarding them over and over with the same messages until they acknowledged that debt doesn't fucking matter, and this was rational people you can argue with or are open to this information"I still don't understand why people don't get it. I've had long conversations where I was saying that US controls its currency and can never run out. The same person said the next day: what's going to happen to US debt? It is a huge problem? when I said: don't you remember what we talked about yesterday? He said: Oh yeah, you think It can just default? So it is pretty much pointless.
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