Friday, June 21, 2013

Warren Mosler — Friday update- deficits matter, a lot!



Macro outlook. Fiscal drag increasing. No obvious offset from other sectors. Potential contraction looming.

The Center of the Universe
Friday update- deficits matter, a lot!Warren Mosler

5 comments:

Matt Franko said...

G-T doesn't include transfer payments so if G-T is shrinking, and govt
provides direct Transfers to the non-govt to consume and perhaps save (a little), the deficit can be seen as shrinking while the economy can be humming along thru govt transfer's direct support of C by the non-govt...

Let taxes fall where they may and let ex post G-T fall where it may who cares?

It's the G that is important plus the Transfer Payments (which no economist even accounts for btw) that directly support C by the non-govt (consumption) that are more important than ex post G-T imo...

Govt SPENDS FIRST and THEN collects the taxes... its the "SPENDS FIRST" that matters...

rsp,

Jonf said...

Warren said have a nice weekend. That's about all I like about his outlook. The placebo effect of the fed seems to be gone.

Jose Guilherme said...

G-T doesn't include transfer payments

It does, because T is taxes net of transfers - transfers are negative taxes.

Matt Franko said...

Jose,

Is that not 'net taxes'?

Rsp

Jose Guilherme said...

Matt,

Precisely.

Higher transfers are equivalent to lower net taxes - and higher deficits.