Wednesday, January 4, 2017

Ellis Winningham — Balanced Budget Amendment Idiocy – An Economic Suicide Pact

The Balanced Budget Amendment Task Force, better known as “Task Force Stupid”, is once again living up to their name. The tile of their thoroughly idiotic petition that you can ignore here says: “Email the Idaho Legislature in Support of a U.S. Balanced Budget Amendment! Destroy the U.S. Economy!” What follows is the technical reason why the Balanced Budget Amendment Task Force is run by complete morons.
Ellis Winningham — MMT and Modern Macroeconomics
Balanced Budget Amendment Idiocy – An Economic Suicide PactEllis Winningham


Six said...

The Balanced Budget Amendment ... the worst possible solution to a nonexistent problem. Hooray!

Penguin pop said...

Talk about creating a complete disaster from nothing. Thanks, American politicians.

Andrew Anderson said...

.. to a nonexistent problem. six

Not quite. To avoid welfare proportional to wealth, inherently risk-free sovereign debt should yield no more than 0% with shorter maturities having more negative yields.

Note that this implies the most negative interest on reserves (NIOR) since those have 0 maturity wait.

Ryan Harris said...

"FISCAL SPACE This largely meaningless phrase will be on every finance minister’s lips in 2017. It’s shorthand for the amount of extra debt a government can take on to fund tax cuts or investment. The problem is that it is almost impossible to measure. A country’s capacity for borrowing depends not just on its current deficit and debt, but also on assumptions about future growth and interest rates, and whether the extra spending will boost potential output. So free-spending ministers will say they are taking advantage of fiscal space, while champions of austerity will insist no such space exists. In the end, governments will do what they wanted to do anyway. – Peter Thal Larsen"
Ten Buzzwords For 2017

You can see how the pushback and diminution of MMT jargon is proceeding apace by skeptics. One by one, key concepts are being tossed out with dubious political talking points.