Governments around the world don’t need to raise taxes in order to transform their economies and avert climate disaste
Ann Pettifor hasn't come around to the idea of MMT yet, but it's good news the New Green Deal could pay for itself.
So where should the money come from? There are fundamentally only two sources of financing. The first is borrowing (credit). This is achieved by applying for a loan, or issuing a bond. The second is existing savings.
To raise the money for a green deal, governments would have to draw on their equivalent of a giant credit card, but would also be able to take advantage of investment by savers. Thankfully, the creation of millions of jobs will generate the income and tax revenues needed to repay any borrowing. As Sanders argues, the whole thing will pay for itself.
The Guardian
Ann Pettifor - The beauty of a Green New Deal is that it would pay for itself
16 comments:
Her article is BS. She claims the GND can be funded simply by money created out of thin air (by central or commercial banks). Obviously if an economy is nowhere near capacity, that's possible. But unemployment (at least in the US and UK) is currently lower than it's been for decades. Thus it is extremely debatable as to how much of free lunch there is out there in the form of "print and spend".
She said,
So where should the money come from? There are fundamentally only two sources of financing. The first is borrowing (credit). This is achieved by applying for a loan, or issuing a bond. The second is existing savings.
A lot more fiat could be created "out of thin air" for the general welfare if the ability of the banks to create deposits "out of thin air" for the private welfare of themselves and for the so-called "credit worthy" were curtailed by eliminating their government privilege.
but would also be able to take advantage of investment by savers.
Since the debt of monetary sovereigns like the US is inherently risk-free, savers would not be investing but receiving welfare proportional to account balance.
I totally agree with Andrew Anderson. Interest on govt debt (and for that matter interest on reserves) comes to the same thing as rewarding people (at the taxpayer's expense) for hoarding $100 bills under their mattresses.
We are either at or very near full employment. So where is the new labor coming from?
They’re gonna outlaw urinalysis and hire all the remaining unemployed drunks and dopers to operate all the heavy construction equipment ....
I'll ask her.
”We are either at or very near full employment. So where is the new labor coming from?”
Still lots of underemployment:
Matt doesn’t understand that when he sees a figure about the spread or death by alcoholism in a country or continent it is an estimated figure covering working and non working population of all ages.
So it’s of course totally false that unemployed people is either drunk or on drugs therefore cannot be employed.
Such a statement by Matt only says something about Matt’s way of thinking and the lack of depth it has. Is it because of Matt’s training?
I'm eternally grateful to S400 for pointing out that at low levels of unemployment there are still some unemployed and underemployed. Anyone who has got thru a basic introductory economics text book has grasped that point.
Unfortunately it just ain't possible to organise labour markets (absent JG) in such a way that every single person who loses a job on Friday is guaranteed a job that ideally suits them by Monday morning.
That's what I thought.
I cant ask her are there are too many replies in the thread. Maybe on another occasion.
Good that your grateful. It needs to be pointed out again and again no matter how many introductory economic books you’ve read.
The situation with today’s underemployment has to do with many other things than organising labour in a way that you going from loosing a job and going to a new job next day.
The question is if the the economy is near full capacity. It’s not and underemployment is one of those factors another is that a far too large amount is still completely outside the labour market all together and third is the open unemployment figures are still too high.
Now go and read the introductory courses again and again so you remember this so I can use my time better than educating you on basics.
So where is the new labor coming from? jonf
Warren Mosler says that the purpose of Federal taxation is to cause unemployment so there's one "solution" though it looks a great deal like "tax and spend" (except it might be in the form of "spend and tax") - hardly a popular solution.
Otoh, proper, responsible de-privileging of the banks would likewise free up labor from the private sector for use by the public sector but without increasing taxes.
There's a lot to be gained from proper de-priviliging of the banks - including a Citizen's Dividend, greater deficit spending for a given amount of price inflation, a risk-free payment system in addition to the one that must work through private banks, AND a much more equitable society.
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