Tuesday, August 29, 2017

Barry Ritholtz — Born-Again Fiscal Hawks Turn Into Doves

Funny how some folks stop caring about federal deficits after an election.…
This sort of behavior is intellectually dishonest, hypocritical, economically counterproductive and, at times, even dangerous. It has been going on for too long....
But Ronald Reagan (and you thought I was referring to Barack Obama) ignored the critics. His deficit spending and tax cuts helped stimulate the economy and led to an economic recovery that lasted for the better part of a decade. 1
This is further support for the playbook laid out by John Maynard Keynes in "A Treatise on Money," written almost 90 years ago: The government acts temporarily to replace missing corporate and household demand during recessions by increasing spending.
Both Reagan and Obama had the big concept right; the time for stimulus through the combination of deficits and tax cuts is during a bad downturn. When private-sector demand crashes, the government can replace it temporarily with the proper programs....
Bloomberg View
Born-Again Fiscal Hawks Turn Into Doves
Barry Ritholtz

16 comments:

Matt Franko said...

It's never temporary ... do some accounting...

Noah Way said...

More Reaganomics bullshit. It wasn't the tax cuts, which were offset by various tax increases. It was massive deficit spending. Reagan triple the debt in two terms. The tax cuts just made the disgustingly rich obscenely rich.

Matt Franko said...

TGA withdrawls are continuously increased that creates the growth :

https://www.chartsninja.com/charts/single/6956

No such thing as "pump priming!" (metaphor) try some accounting...

Steve said...

'do/try some accounting,,,' But only for the years '98-'04? (Some very bad years in there from '05-'17-NO deposits!) WORTHLESS

try this:

https://www.fiscal.treasury.gov/fsreports/rpt/mthTreasStmt/backissues.htm

Matt Franko said...

"Worthless"

So Steve if you eat and shit in the same day you think you are starving right?

Matt Franko said...

Are you continually constipated?

Matt Franko said...

"Deficit too small!" = "hold it in!"

Andrew Anderson said...

The debt of a monetary sovereign, being inherently risk-free, should yield at most 0% minus administrative costs. Thus all sovereign debt should have NEGATIVE yields with the shortest maturities, private and foreign sector account balances* at the central bank (aka "reserves" in the case of depository institutions) and physical fiat, aka "cash" (zero wait to maturity) costing the most (most negative interest/yield) and the longest maturity, eg. 30 yr. US Treasury Bonds costing the least.

If this were the case, besides avoiding welfare for the banks and the rich, then the National Debt would generate revenue via an inescapable tax and be self-extinguishing! Then, the creation of new National Debt, at least in the form of account balances at the central bank, would be a continual need just to prevent the supply of fiat from shrinking to ZERO**.

*exception: Individual citizen accounts at the central bank should be provided negative-interest-free accounts up to, say, $250,000.

**except for fiat held in negative-interest-free accounts at the central bank.

Six said...

I wanna play, too!

If you never eat and you shit every day, are you a magic shit factory?

I feel smarter already.

Matt Franko said...

You guys are getting NOWHERE!

Here comes trickle down / supply side and it's going to get better... what will the excuses be???

Tom Hickey said...

Have to get through the debt ceiling first. Trump seems to be sabotaging himself by demanding that payment for the wall be included.

Six said...

"You guys" are also getting NOWHERE! Congratulations.

Six said...

The biggest obstacle we face is the "You guys" mentality. Ego trumps progress and we end up with binary "You guys" arguments. And we get nowhere.

Matt Franko said...

Shit like "Deficit too small!" and "neoliberal conspiracy!" "the banksters did it!" "$29 trillion!" , etc...is getting you nowhere...

How about some science for a change?

Matt Franko said...

" vampire squid!", "occupy!", "inequality!", etc, etc, etc... none of these here things are going to get you anywhere...

Six said...

You're right, Matt. Do you know what will get us somewhere? This:

"So Steve if you eat and shit in the same day you think you are starving right?"

You are what you hate. Bravo.