Marco Rubio is broke. According to recently released disclosures, Republican Senator and possible Vice Presidential running mate to Mitt Romney, has a negative net worth of $422,000.
Being broke doesn't make you a bad person, but Rubio is running around giving stupid, bone-headed, prescriptions for the economy. He can't even take care of his own finances so why is he chiming in on with policies that will kill ours?
| "The bottom line is this president inherited a country with serious problems," Rubio said. "He asked the Congress to give him the stimulus and Obamacare to fix it. The Democrats in Congress gave it to him. And not only did it not work, it made everything worse." |
Sorry, Marco...it did work. See here.
Then he says this:
| “We are having a debt ceiling crisis on a daily basis, and here’s why,” said Rubio on Fox. ”Because this government every year is spending $1.5 trillion more than it takes in.”
“When is the United States federal government and when is this president going to begin to seriously address the fact that this is a government that spends $1.5 trillion a year more than it takes in? That has to be dealt with. That is not going to solve itself. It’s not going to go away on its own. And every year that goes by that it remains unresolved, the harder it becomes to solve. ” |
Okay, so where's the problem? That's $1.5 trillion of income and savings to the private sector. Why does he have a problem with that? Is his plan to strip $1.5 trillion of income from the private sector? That's better?? And it's been going on and on forever. Okay. So? Rates are at record lows.
Rubio apparently not only wants to stay broke, he wants every one of us to join him. No thanks, Marco. Shut up, please!
I've been reading MMT blogs for a year now and I still find the operational details of money creation confusing. (partly because we call different things: money, money things, Bank money, Reserves, M1, M2, etc etc). There are lots of different terms people use depending on what they are talking about.
ReplyDeleteCan anyone recommened the most thorough and comprehensive writing on this? Also, the more reader friendly the better.
Even though it's not MMT, JKH's piece Treasury and the Central Bank: A Contingent Institutional Approach was very good. In one of the comments section here Scott Fullwiler linked one of of his older papers on this topic and it was much more dense and less explanatory than JKH's.
What is the MMT equivalent of JKH's essay?
JK,
ReplyDeletedid you read "Soft Currency Economics" by Warren Mosler at moslereconomics.com yet?
rsp
Matt,
ReplyDeleteI did last summer when I first came accross MMT. I'll go back and read it again.
JK, I don't think that there is a better informal source than JKH, although unfortunately, his comments are scattered over many blogs stretching over some time. I wish I had had the foresight to evernote them when reading them, but, alas, I didn't. JP Koning had the foresight to create a a blogjust to record his comments at other places.
ReplyDeleteJKH does his best to break down accounting complexities into simple to understand models, and he has become very good at it. He could write an introductory book on central banking and Treasury procedure for ordinary folks that would be a great contribution.
Heretofore, there just hasn't been all that much interest in these arcane topics outside of the specialists who work in the field. Most economists haven't delved into it either.
To gain a good grasp of it seems to me to require a good understanding of financial accounting. Then one has to study the cb accounting manuals and familiarize oneself with the various reports that are published periodically. That's a big commitment unless one is working in a field in which there will be pay back.
However, some people who do know their way around in this labyrinth are willing to answer intelligent and informed questions, so jump into some reading and ask JKH, Scott, Warren, etc., who are available on the blogs.
Here are links to some US manuals. All governments publish them.
MODERN MONEY MECHANICS — A Workbook on Bank Reserves and Deposit Expansion — Federal Reserve Bank of Chicago
Financial Accounting Manual for Federal Reserve Banks
Treasury Financial Manual (TFM)
Tom,
ReplyDeleteThanks. I appreciate the thoughts and links.
JK,
ReplyDeleteAre you only interested in the process of 'money creation?
rsp
Matt,
ReplyDeleteIm interested in a lot of things:)
One of them is the "operational realities" of government finance and it relates to macroeconomic polcy options.
Why do you ask?
"Money Creation" would be limited and perhaps easier to explain or lead you to resources that would explain just that aspect....
ReplyDeleteWhat do you mean by "operational realities" can you be specific?
Do you not believe that the govt cannot 'run out of money'?
rsp,
Matt,
ReplyDeleteOf course the U.S.Government can't run out of money! To claim otherwise would be like to deny infinity in the realm of numbers :) How can't a currency issuer, that creates currency out of thin air, run out? Makes no sense.
When I ask about operational realities I want to know the 'mechanisms' of how government fiannce "operates"..
Does that make sense? I'm not talking about theory, I'm talking about "what happens" between Congress, the Treasury, the Fed, commercial financial institutions etc. when the U.S. goernment spends and taxes.
It's simple to say spending must come first, which makes logical and intuitive sense. But the "operations" are clearly more complicated.
Does that help clear up what I'm interested in?
btw, thanks for looking out.
Ugh!
ReplyDeletethe third line should say.. "How can a currency issuer…"
JK,
ReplyDeleteYou can watch the daily "income statements" here:
http://www.fms.treas.gov/dts/index.html
They have the TGA TTL accounts there. Total withdrawals and deposits, etc...
tsp