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Wednesday, August 29, 2018

Deficit is the highest in 6 years. Where are all the MMT gods??

The deficit is now $766 bln, the highest in 6 years and the highest in 5 years as a %  of GDP. Where are all the MMT gods touting this as bullish? Mosler's still bearish. He's been bearish for 4 years. Missed the entire rally.

Kelton? Still criticizing Trump.

Federal Deficit

Federal deficit


BTW...at Mike Norman Economics we look at FLOWS. It gave us the bullish signal a long time ago.
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10 comments:

  1. Ryan HarrisAugust 29, 2018 at 9:41 AM

    MMT is a useful economic model, seems like once Wray left and Mosler retired the remaining people became more interested in using the model as a means to promote political careers than the political economics itself.

    Too bad in a way for the MMT analysis that gets bandied about like Mosler or Kelton clearly doesn't go very deep any more -- missing all the interesting things.

    ReplyDelete
  2. finaslegendarystoriesAugust 29, 2018 at 9:52 AM

    well said RH...many questions re: MMT today (lack of good paying blue collar jobs, and resulting increased consumer debt) go unanswered, including my questions on Twitter responding to Aussie Prof. Bill Mitchell...is anybody paying attention, with exception of Mike Norman? But, WTF do I know, so I follow Ocasio-Cortez for entertainment purposes...

    ReplyDelete
  3. lastgreekAugust 29, 2018 at 9:54 AM

    How much of this "deficit" was used in the public (Tom, Dick and Harriet...) interest?

    ReplyDelete
  4. lastgreekAugust 29, 2018 at 10:08 AM



    Stephanie Kelton, Stony Brook University professor of public policy and economics, discusses the impact of U.S. tax cuts and infrastructure spending on employment and the economy with Bloomberg's Joe Weisenthal on "What'd You Miss."

    (Source: Bloomberg)
    https://www.bloomberg.com/news/videos/2018-03-19/why-u-s-deficit-spending-is-a-good-thing-video

    ReplyDelete
  5. Ralph MusgraveAugust 29, 2018 at 10:23 AM

    The basic MMT position is that the size of the deficit doesn't matter as long as the economy has spare capacity, i.e. as long as the deficit does not exacerbate inflation too much. In contrast, when the economy IS NEAR or at capacity, a country needs to be careful on the size of the deficit. In particular if it has an independent central bank, the CB will simply negate what it sees as an excessive deficit with interest rate rises. To judge by Kelton's pronouncements, it's not entirely clear to me that she gets that point, though I could be wrong there.

    ReplyDelete
  6. Matt FrankoAugust 29, 2018 at 11:24 AM

    Oh no now more bad news:

    https://www.businessinsider.com/us-gdp-q2-2018-second-estimate-2018-8?r=UK&IR=T

    “Gross domestic product, the value of every good and service produced domestically, rose at an annual rate of 4.2%, the Commerce Department said, revised up from 4.1% in the advance estimate. It remained the fastest pace of growth in nearly four years.”

    This really sucks...

    ReplyDelete
  7. AXEC / E.K-HAugust 30, 2018 at 8:15 AM

    Secret Champagne for the MMT gods
    Comment on Michael Norman on ‘Deficit is the highest in 6 years. Where are all the MMT gods??’

    Michael Norman wonders: “The deficit is now $766 bln, the highest in 6 years and the highest in 5 years as a % of GDP. Where are all the MMT gods touting this as bullish? Mosler’s still bearish. He’s been bearish for 4 years. Missed the entire rally. Kelton? Still criticizing Trump.”

    The embarrassment is this. MMT is about deficit-spending/money-creation. Deficit-spending/money-creation is money-making for the oligarchy. The macroeconomic Profit Law clearly states that Public Deficit = Private Profit.

    This, however, is an economic policy that cannot be sold to the people. So, the MMT gods developed a smart communication strategy:

    • They made the profit effect disappear in their monetary theory with the help of a false balances equation.#1

    • They put potential positive employment effects of deficit spending in the foreground.

    • They tell people that public debt is not really debt but private saving.#2

    • They tell people that debt does not really matter but is only some digits on an account.

    • They tell people that budget-balancers are either retarded Swabian housewives or Neoliberal austerity sadists.

    In brief, MMTers sell deficit-spending/money-creation as a social benefit, with Stephanie Kelton as the pepped-up Mother Theresa of Late Capitalism.#3

    Now, as it happens, Mr. Trump has realized the highest public deficit in 6 years. Michael Norman of Wall Street is very excited about this, and rightly so. Mr. Trump is the straightforward implementer of MMT.#4 The embarrassment of the MMT gods consists of the obvious PR disaster that Mr. Trump did not care to put on the social fig leaf which is of overall importance for the political credibility of MMTers.#5

    But, in the end, only success counts. While Wall Street’s Michael Norman can openly rejoice,#6 the academic MMT gods click glasses with Mr. Trump behind closed doors with Stephanie Kelton chiding Mr. Trump for unthinkingly busting the social cover of the MMT deficit-spenders/money-creators.

    Egmont Kakarot-Handtke

    #1 MMT and the magical profit disappearance
    https://axecorg.blogspot.com/2017/08/mmt-and-magical-profit-disappearance.html

    #2 For details of the big picture see cross-references
    http://axecorg.blogspot.com/2017/07/mmt-cross-references.html

    #3 The Kelton-Fraud
    https://axecorg.blogspot.com/2018/07/the-kelton-fraud.html

    #4 Keynes, Lerner, MMT, Trump and exploding profit
    https://axecorg.blogspot.com/2017/12/keynes-lerner-mmt-trump-and-exploding.html

    #5 MMT and grassroots movements
    https://axecorg.blogspot.com/2018/01/mmt-and-grassroots-movements.html

    #6 “… at Mike Norman Economics we look at FLOWS. It gave us the bullish signal a long time ago.”

    ReplyDelete
  8. Matt FrankoAugust 30, 2018 at 2:29 PM

    “the academic MMT gods click glasses with Mr. Trump behind closed doors”

    Ah yes now we have the “neo-neoliberal conspiracy!!!”

    You Art Degree people have officially jumped the shark...

    ReplyDelete
  9. djrichardAugust 30, 2018 at 6:02 PM

    Has the yield curve inverted yet? No? Then BTFD b****es.

    ReplyDelete
  10. AXEC / E.K-HAugust 31, 2018 at 9:43 AM

    Matt Franko

    You say: “Ah yes now we have the ‘neo-neoliberal conspiracy!!!’”

    No conspiracy, merely the peaceful pluralism of scientific incompetence and political corruption.

    MMT: The one deadly error/fraud of Warren Mosler
    https://axecorg.blogspot.de/2017/11/mmt-one-deadly-errorfraud-of-warren.html

    Down with idiocy!
    https://axecorg.blogspot.com/2017/12/down-with-idiocy.html

    MMT is idiocy and fraud
    https://axecorg.blogspot.com/2018/03/mmt-is-idiocy-and-fraud.html

    Cryptoeconomics ― the best of Bill Mitchell’s spam folder
    https://axecorg.blogspot.com/2018/01/cryptoeconomics-best-of-bill-mitchells.html

    How Bill Mitchell stalks Jeremy Corbyn
    https://axecorg.blogspot.com/2018/08/how-bill-mitchell-stalks-jeremy-corbyn.html

    Egmont Kakarot-Handtke

    ReplyDelete