David F. Ruccio and Peter Radford on US Inequality

Real-World Economics Review Blog
USA 1966 to 2011: One inch (for the bottom 90 percent) versus 4.9 miles
David F. Ruccio

USA Inequality Update
Peter Radford

Clearly something is amiss in the land of opportunity.

The game is rigged.

Is that a problem?

You bet it is.

David Cay Johnston — Congress’ potential faulty tax logic

Read it at Reuters | Opinion
Congress’ potential faulty tax logic
By David Cay Johnston

David Cay Johnston: Sovereign Governments Can't Go Broke In Their Own Currency

Austerity supporters are selling the idea that governments, like families, must cut back when income shrinks. But economically, governments are not like families.

Firing teachers, cops and government clerks will, for sure, reduce public spending. But budgets, like the song of the Sirens, are only part of the story. Listen only to the alluring lyrics and, like the many voyagers before Odysseus, we will suffer disastrous consequences - in our case falling incomes and worsening economies.

The full economic story begins with this principle taught to every economics student: spending equals income and income equals spending. Cut spending and incomes must fall; cut incomes and spending must fall.

Those who disagree with this say that only private spending can create wealth and that government spending is inefficient. I think the first argument is wrong, but the second is often true, which is why citizens need to pay close attention to their government.
When private spending shrinks, then either government spending must grow to make up for it or the other side of the equation, income, must shrink.

If we increase spending today by borrowing, we create a claim on future income. Families with debt must divert part of their future income to interest and principal to service that debt or go bankrupt. Governments are different, provided they have monopoly control of their currency. By definition, no sovereign government can ever go broke in its own currency.

Read the whole thing at The Huffington Post

David Cay Johnston: Sovereign Governments Can't Go Broke In Their Own Currency

By David Cay Johnston | Reuters

(The author is a Reuters columnist. The opinions expressed are his own.)

Sound like MMT? It's no coincidence. I'm sure we will be hearing more like this from him.

David Cay Johnston on Occupy Wall Street

Pay close attention to the Occupy Wall Street demonstrations in New York and around the United States, especially if the protests endure through the cold months into the election year spring or if the New York police are ordered to violently end the demonstrations, which would ensure they spread.

The protests show signs of sparking a major change in U.S. politics by creating common ground among people with wildly divergent views. The key to their significance will be whether they foster a wholesale change in political leadership in 2013 or whether Americans return a vast majority of incumbents in both parties at all levels of government.

Occupy Wall Street differs fundamentally from the many demonstrations I have covered over more than four decades. Instead of people with similar specific interests -- anti-war, anti-rape, Tea Partiers -- these demonstrators come with widely varying views, experiences and backgrounds, yet unite around a common theme: bankers are ripping off America.

Two secondary themes also emerge in talking to some of the hundreds of people occupying Zuccotti Park. One is that the super rich own the politicians. The other is that the news media, almost across the board, view events through the eyes of the rich....

Read the rest at David Cay Johnston at Reuters via AlterNet, Occupy Wall Street

David Cay Johnston is an investigative reporter and author writing on economic, legal, and tax issues. He is acquainted with MMT but doesn't always write in paradigm.

Johnston thinks, "The key to their significance will be whether they foster a wholesale change in political leadership in 2013 or whether Americans return a vast majority of incumbents in both parties at all levels of government." I don't think so. I think that it is unlikely there will be major political change in the US as a result of the 2012 general election, since both parties are essentially corrupt.

I think that this kerfuffle going to persist for quite some time and expect it to extend perhaps across the entire decade of the twenty teens. I also expect it to be a global phenomenon that will result in systemic global change of some sort yet to be determined.

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