An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Saturday, December 5, 2020
Why Joe Biden Can Stop Worrying and Start Spending Like Crazy — Robert Hockett and Aaron James
Where the money goes matters a great deal. Typical welfare-for-the rich deficits do little for their size. The most effective would of course be Job Guarantee type spending. Biden isn't stuffing his administration with deficit hawks. Who other than Neera Tanden?- who isn't the worst. His economic advisers Jared Bernstein, Heather Boushey are very progressive. The times require big deficits. Fearful thinking that Biden won't do it is just as bad as wishful thinking. We'll see what happens.
The article says some things very well, beautifully clear and concise:
Is it about how many promises you can literally make or about how many promises you can fulfill? Sure, you can overcommit—promise to do more than you’re actually capable of. You can also under-commit, keeping your options open and thereby impoverishing your life by sitting on your potential.
Money is like that. Nations can under-issue money and thereby impoverish themselves by under-committing. We call that deflation. Nations can also overissue money and thereby harm their own credibility, as any overpromiser does. We call that inflation.
If the Dems sing the same old song, then we are in for a Great Depression. Will they be that inept as politicians? Like I've said earlier, I think we are in for a change of epoch, the last one being the 70s-Reagan. The Dems have failed in their effort to elect Republicans, while the Republicans have changed to trying to elect Democrats, and succeeded.
Basically everybody that Biden is appointing is to the left of the corresponding Obama figure. Enough? I am not sure. But Biden, whether he likes it or not, is working in a real world that doesn't magically conform to his wishes. Unlike Trump, when push comes to shove, Biden might understand that - again Trump very clearly lost solely because of his coronavirus ineptitude and nothing else.
In the real world, you have to support people who are out of work and whose businesses are shut down. Did the Democrat controlled House act to get money into people's hands?
In the real world, there are 3 branches of the Federal government, state, and local governments. Each level has responsibility for handling a crisis.
MMT academics want to believe the Feds have unfettered jurisdiction. Sure, they can write checks, and that is how the other levels prefer it. YOU send us money, and WE decide what to do with it. Ideally, with no strings attached.
Bill Mitchell has written of the problem of intermediate levels of government that are financially constrained, yet implement most of the important policies.
Yeah this is why he is stuffing his admin with “fiscal sustainability!” people...
ReplyDeleteSeriously? People don't realize he's a well-known deficit hawk?
ReplyDeleteIt's called wishful thinking. Look it up.
ReplyDeletehttps://en.m.wikipedia.org/wiki/Wishful_thinking
ReplyDeleteIf you look back pre election the Dems were proposing like 2.8T in stimulus ... now they are reportedly talking about an 800b package....
ReplyDeleteALREADY cut their policy by 2T...
Where the money goes matters a great deal. Typical welfare-for-the rich deficits do little for their size. The most effective would of course be Job Guarantee type spending. Biden isn't stuffing his administration with deficit hawks. Who other than Neera Tanden?- who isn't the worst. His economic advisers Jared Bernstein, Heather Boushey are very progressive. The times require big deficits. Fearful thinking that Biden won't do it is just as bad as wishful thinking. We'll see what happens.
ReplyDeleteElection over, Dems in power, deficits matter. Same old song.
ReplyDeleteBiden/Harris would have to become a surprise FDR-type administration.
To paraphrase Pelosi: Ain't gonna happen.
The article says some things very well, beautifully clear and concise:
ReplyDeleteIs it about how many promises you can literally make or about how many promises you can fulfill? Sure, you can overcommit—promise to do more than you’re actually capable of. You can also under-commit, keeping your options open and thereby impoverishing your life by sitting on your potential.
Money is like that. Nations can under-issue money and thereby impoverish themselves by under-committing. We call that deflation. Nations can also overissue money and thereby harm their own credibility, as any overpromiser does. We call that inflation.
If the Dems sing the same old song, then we are in for a Great Depression. Will they be that inept as politicians? Like I've said earlier, I think we are in for a change of epoch, the last one being the 70s-Reagan. The Dems have failed in their effort to elect Republicans, while the Republicans have changed to trying to elect Democrats, and succeeded.
Basically everybody that Biden is appointing is to the left of the corresponding Obama figure. Enough? I am not sure. But Biden, whether he likes it or not, is working in a real world that doesn't magically conform to his wishes. Unlike Trump, when push comes to shove, Biden might understand that - again Trump very clearly lost solely because of his coronavirus ineptitude and nothing else.
In the real world, you have to support people who are out of work and whose businesses are shut down. Did the Democrat controlled House act to get money into people's hands?
ReplyDeleteIn the real world, there are 3 branches of the Federal government, state, and local governments. Each level has responsibility for handling a crisis.
MMT academics want to believe the Feds have unfettered jurisdiction. Sure, they can write checks, and that is how the other levels prefer it. YOU send us money, and WE decide what to do with it. Ideally, with no strings attached.
Bill Mitchell has written of the problem of intermediate levels of government that are financially constrained, yet implement most of the important policies.
“Personnel is policy”
ReplyDelete