Tuesday, January 22, 2013

News from the front — civil war front, that is.

Liberalism has returned in force, Senate Minority Leader Mitch McConnell (R-Ky.) said on Tuesday, reviewing the president's Inaugural Address.
"One thing is clear from the president's speech: The era of liberalism is back. His unabashedly far-left-of-center inaugural speech certainly brings back memories of the Democratic Party in ages past," he said. "If the president pursued that kind of agenda, obviously it's not designed to bring us together, and certainly not designed to deal with the transcendent issue of our era, which is deficits and debt."
The Huffington Post
Mitch McConnell On Obama Inauguration Speech: 'The Era Of Liberalism Is Back'
Ryan Grim

At a Ways and Means Committee hearing on Tuesday, Rep. Jim McDermott (D-WA) blasted Republicans for refusing to raising the federal debt ceiling unless Democrats agreed to budget cuts.“I have to tell you, listening to this hearing is like we are living in Alice in Wonderland,” McDermott said. “Here we are hearing from witnesses telling us how to use default creatively or use it to get some leverage or something — and the simple talking about it here is destructive.
“The whole world is watching this hearing. It is the first hearing on this issue. The whole point of a society is to create and run a government to make order for people. People don’t like chaos and this hearing is about how to create chaos to get what you can’t get politically with votes....
“They want everyone who is lucky and doing well to just do well,” McDermott continued. “And if you aren’t doing well, well you’ve got to deal with it, it’s your problem. It is social Darwinism. It is survival of the fittest put into public policy.”
The Raw Story
Rep. McDermott slams GOP for using debt ceiling to push ‘social Darwinism’ 
Eric W. Dolan

Are Governors Scott Walker, Rick Scott, Jan Brewer, John Kasich, Rick Perry, Rick Snyder, Nikki Haley and others conspiring to hijack our Constitution on July 4th, 2013? The conservative think-tank, Goldwater Institute, is moving lobbyists into position to mobilize legislatures throughout our nation with a Compact for America devised by their lead attorney Nick Dranias.
The Compact for America has set a timetable to convene a single issue constitutional convention this summer using Article V of the US Constitution to railroad the revised Balanced Budget Amendment in to the Constitution.
Article V of the Constitution allows states to assemble and propose amendments. It takes 34 states to request an Article V convention. The proposals that pass are then sent through Congress for a majority support. Then the amendment or amendments are sent out to the states for ratification. If 38 states agree, the amendment becomes part of the Constitution.
The Compact for America guarantees that the process will exclude the input of the other states and restricts the delegates to the Balanced Budget Amendment discussion under threat of pre-written instructions to state Attorney Generals.
The Compact for America defines that the states will choose the governor of that state as the only delegate to the convention. The number of red states gives the Goldwater Institute a much easier path to victory. There is no election or presidential action that will stop this effort. The campaign relies on the cooperation of state legislatures and governors, not popular support. Popular opposition will have little effect as well. There is no way to stop the governors and other delegates from passing the amendment. The Compact for America makes sure they collectively use their power to impose their will on the Constitution without debate of any other issue or consideration of any language changes in the amendment itself. It is all rigged in advance.
Is THIS Grounds for Revolution?
Daniel Marks

Nick Dranias responds to Daniel Marks piece in the comments at FDL. When I posted a link to Compact for American previously here at MNE, Nick also came by and the record is in the comments there. He is polite, articulate, persistent, and presents his case well, but he is wrong when it comes to the monetary economics and understanding of public finance. We disagreed about the economic implications of a balanced budget approach in comparison with a sectoral balance approach to the appropriate fiscal stance and functional finance approach to fiscal policy.

Fiscal Policy in a Stock-Flow Consistent (SFC) Model by Wynne Godley and Marc Lavoie (Levy Institute, April 2007)

Functional Finance and the Federal Debt by Abba P.Lerner (Social Research,  Vol. 10, No. 1, February 1943)

The Seven Deadly Innocent Frauds of Monetary Policy by Warren Mosler (2010)

Soft Currency Economics II by Warren Mosler (1994, 2012)

Understanding Modern Money: The Key to Full Employment and Price Stability by L. Randall Wray (1999)

Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems by L. Randall Wray (2012)


Roger Erickson said...

What would happen if we followed "Kentucky's" advice, and simply privatised fiat?

Uh ... same thing as what's already happened? This guy's some kind of stool pigeon. Wall St. already owns his country, and he want's Civil War so he can get more of it?

I'm embarrassed for him, and Kentucky, and the USA.

beowulf said...

I don't know what's more astonishing, a sitting federal judge is on Compact for America's advisory council or that Larry freakin' Lessig is

I've been waiting for someone to bring up the Balanced Budget Amendment. They can knock themselves out, I'm a step ahead of them . :o)
"Section 1. Balanced Budget Requirement. Total outlays of the government of the United States shall not exceed total receipts of the government of the United States at any point in time unless the excess of outlays over receipts is financed by public debt...
total receipts... means all tax receipts and other income of the government of the United States, excluding proceeds from its issuance or incurrence of any type of debt or liability".

Naturally, the Trillion Dollar Coin blows right past this.

"At such times as the Secretary of the Treasury determines appropriate, but not less than annually, any amount in the Fund that is determined to be in excess of the amount required by the Fund shall be transferred to the Treasury for deposit as miscellaneous receipts..." 31 USC 5136

Also there's a flaw in their definition of "general revenue tax" that will completely unravel the requirement of a two-thirds majority in both Houses to raise taxes.... but I'll keep that under my hat. Don't want to give out too much free legal advice. :o)