Monday, November 26, 2018

Bob Bryan — Trump is suddenly obsessed with the ballooning federal deficit after his signature legislative victories caused it to explode


Apparently the president doesn't get the connection between deficit spending and stimulus.

Business Insider
Trump is suddenly obsessed with the ballooning federal deficit after his signature legislative victories caused it to explode
Bob Bryan

8 comments:

Andrew Anderson said...

If the inherently risk-free debt of a monetary sovereign were priced properly (i.e. ethically), it would have negative yields/interest and there would be far less hysteria about deficit spending.

Noah Way said...

The prelude to a severe round of social austerity: social security, Medicare, Forest Service and Parks, etc., because "we can't afford it".

Andrew Anderson said...

because "we can't afford it". Noah Way

Yet we can apparently afford Interest on Reserves (IOR) when we should be CHARGING the banks for using the Nation's fiat. Likewise with the longer maturity debt of the monetary sovereign; the yields are going the wrong way! That debt should be a revenue EARNER, not a revenue CONSUMER.

Could it possibly be that if we had less welfare for the banks and the rich that less welfare would be needed by everyone else or at least more welfare would be available for those who need it?

Also, if a good defense requires a good offense then why are the exorbitant privileges of the banks ignored by the MMT folks? E.g., why are the citizens forced to use bank deposits when they could easily have debit/checking accounts at the Central Bank itself, if allowed?

Matt Franko said...

“why are the exorbitant privileges of the banks ignored by the MMT folks”

They bash banks all the time... they hate banks..

Ralph Musgrave said...

I agree with Andrew that interest on reserves is ridiculous. Leading MMTers (specifically Warren Mosler and Bill Mitchell) have actually advocated the "permanent zero rate of interest" idea for some time. That's the idea that the state (government and central bank) should not pay interest to anyone for anything. (Obviously interest rates for mortgages and similar will always be significantly above zero).

I actually had a paper published on that topic recently (which gives links to relevant Mosler and Mitchell artcles). See:

http://scholarpublishing.org/index.php/ASSRJ/article/view/5640/3406

Andrew Anderson said...

... they hate banks.. Franko

They sure love the government insurance of bank liabilities, including the liabilities the banks themselves create ("bank loans create bank deposits/liabilities for fiat").

Also, lender of last resort, etc., etc., etc.

Andrew Anderson said...

have actually advocated the "permanent zero rate of interest" idea for some time. That's the idea that the state (government and central bank) should not pay interest to anyone for anything. Ralph Musgrave

It's much more sinister than that. The Central Bank shall lend the banks unlimited amounts of fiat (aka "reserves") at 0%.

So what right does the CB have to create the Nation's fiat for private interests such as banks? None, I say.

Yes, I know it's for when inter-bank lending freezes during banking crisis but it's just another unjust kludge to a system of unjust kludges.

Nebris said...

Because he's a fucking moron.