Tuesday, December 29, 2020

Bill Mitchell —Is the $US900 billion stimulus in the US likely to overheat the economy – Part 1?

Comments made last week by the former Clinton, Obama and now Biden economist Lawrence Summers contesting whether it was sensible for the US government to provide a $US2,000 once-off, means-tested payments was met with widespread derision and ridicule from progressive commentators. There were Tweets about eviction rates, bankruptcy rates, poverty rates, and more asserting that the widespread social problems in the US clearly meant that Summers was wrong and a monster parading as a progressive voice in the US debate. I didn’t see one response that really addressed the points Summers was making. They were mostly addressing a different point. In fact, the Summers statement makes for an excellent educational case study in how to conduct macroeconomic reasoning and how we need to carefully distinguish macro considerations from distributional considerations, even though the two are inextricably linked, a link that mainstream macroeconomics has long ignored. So while Summers might have been correct on the macro issues (we will see) he certainly wasn’t voicing progressive concern about the distributional issues and should not be part of the in-coming Administration. This is Part 1 of a two-part analysis. In Part 2 we will do some sums. In this part, we will build the conceptual base....
Bill Mitchell – billy blog
Is the $US900 billion stimulus in the US likely to overheat the economy – Part 1?
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

18 comments:

Matt Franko said...

“although the frameworks we use to conduct that sort of analysis is ridden with conceptual and measurement problems which means that we are doing art rather than science.“

No not there... right here you are doing Art rather than Science:

“fact, the Summers statement makes for an excellent educational case study in how to conduct macroeconomic reasoning “

As soon as you bring reasoning into it you are doing Art rather than Science...

Science is opposing Reason...

You either get an Art Degree and are trained to reason or you get a Science Degree and are trained to test and make corrections...

Matt Franko said...

Or maybe “Science is not equivalent to Reason”? iow they are two different methods...

I think they are somewhat opposed ... or to be viewed in contrast...

Calgacus said...

Science is opposing Reason

That is the craziest thing I have ever seen on this blog.
And you have stiff competition from AA, EKH etc.

Is there anybody else on the planet who has ever agreed?
They're the same. Science is applied reason. Reason is the search for science.
Even in your crazy framing of science as only testing and correcting (testing WHAT?)- if you're speaking English, that's a form of reasoning. That's why it's called "scientific reasoning".

Peter Pan said...

Reasoning in the absence of evidence i.e. non-empirical

Matt is an empiricist?

Matt Franko said...

"scientific reasoning" = oxymoron (figure of speech) created by Art Degree people never trained in Science....

Matt Franko said...

Reasoning is via dialog...

so you have two people reasoning... 1 is saying "we're borrowing from our grandchildren!" 2 is saying "no were borrowing from China!"....

Neither is testing anything...

How is that Science?????

Matt Franko said...

When you use Reason you have to choose either the grandchildren or China...

It doesnt work...

Matt Franko said...

Or maybe a 3rd Art Degree person shows up and says "no, were borrowing from the future!"..

so then it has to be either grandchildren, China or the future... ok ...

Still doesnt work...

Matt Franko said...

our 'Reason' is dialog in the original Greek:

https://biblehub.com/greek/1261.htm

dialogismos: a reasoning
Original Word: διαλογισμός, οῦ, ὁ
Part of Speech: Noun, Masculine
Transliteration: dialogismos
Phonetic Spelling: (dee-al-og-is-mos')
Definition: a reasoning
Usage: a calculation, reasoning, thought, movement of thought, deliberation, plotting.

No testing is involved .... you just reason back and forth...

Doesnt work...

Matt Franko said...

I guess it might work in Art...

Peter Pan said...

Evidence says its neither. Sounds reasonable to me...

Matt Franko said...

"Evidence says its neither."

You only point to evidence that supports your thesis in the reasonings... not exculpatory evidence... iow you dont argue against yourself... you leave that to the others in the reasonings..

And again NOBODY is testing anything or making predictive statements in this process.. that is not part of it...

Its to me the opposite of Science (I'm trained in Science though)... or contrary to Science.. or in contrast to Science...

Matt Franko said...

In music you have the Art people saying "Jazz music!" then you have the Art people saying "folk music!".... then you have someone like Dave Matthews listening to both of those people and then synthsizing the 2 music theses into his jazz-folk fusion type of music...

ok probably works there... but you start doing your material systems work that way and youre going to blow yourself up... or the structure is going to collapse ... or maybe you burn yourself or electrocute yourself...

It doenst work... we can see this everyday with these people...

Peter Pan said...

I'm not arguing against myself, this is what MMT summarizes.

Matt Franko said...

Well if you mean that by: “ Evidence says its neither. ”

You’re still not saying what it is... you can’t define something by just saying what it is not...

That would just be an under defined antithesis...

MMT just dabbles in Science when it suits them... won’t commit...

It’s really against the rules of the dialogic method.,, that’s probably why they irritate all the other Art Degree people so much... they are not followowing the Art Degree rules exactly...

Peter Pan said...

Shall I present the evidence to them on a silver platter?
They can do their own learning.

Greg said...

“Shall I present the evidence to them on a silver platter?”


Ooooooh stop holding out on us Pete..... we just aren’t smart enough to find it......please show us the way! It doesn’t have to be on a silver platter.......maybe a Holy Book.

Greg said...

“You only point to evidence that supports your thesis in the reasonings... not exculpatory evidence... iow you dont argue against yourself... you leave that to the others in the reasonings..”

And again NOBODY is testing anything or making predictive statements in this process.. that is not part of it...

Its to me the opposite of Science (I'm trained in Science though)... or contrary to Science.. or in contrast to Science...”


First off, your only half trained by your own admission. You missed the most important parts apparently You know the jargon and know how to add and subtract and do algebra and think “I’ve got this science stuff down”. I have taken an opportunity this week while on a staycation to read on some new things and I want to thank you for some of you ramblings about Land Grant Colleges. They spurred an interest to learn more about them and as I suspected you are only about half right in some of the more specific claims you have made about them. Matt, you gotta finish the work!! Go back get the rest of that Masters of science and it might close the circle for you. You are part way there.... I see a desire to approach things in an intellectually honest way but an unwillingness to do all the work necessary.

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