I asked Kelton whether she believes Donald Trump has changed the terms of economic debate. “Absolutely. When he passed the $1.9trn tax cuts in 2018, which everybody knew were going to increase the deficit, I saw Senator Sanders, and he said to me, ‘Is this you? Did you do this?’ And I replied, ‘It’s a good thing. It’s a good thing in that it’s going to show you can make use of the budget when you have power to carry out your agenda.’”...Credit where credit is due.
Of course, DJT had a compliant legislature, whereas when Democrats occupy the White House, congressional Republicans become fiscal conservatives.
New Statesman (UK)
MMT economist Stephanie Kelton: “Donald Trump changed the terms of economic debate”
New Statesman (UK)
MMT economist Stephanie Kelton: “Donald Trump changed the terms of economic debate”
George Eaton
16 comments:
George Eaton, author of that New Statesman article, asks: “But, once the illusion of significant budgetary constraints has been dispelled, how would governments resist the urge to splurge?” The answer is that MMT does not advocate the removal of all "budgetary constraints".
Under MMT, one option is for central banks to make it very plain to politicians (as they do at the moment) that if politicians spend what the central bank thinks is too much, then the central bank will raise interest rates so as to damp down demand. Politicians will then have to explain to mortgagors why interest on their mortgages has risen.
Another “budget restraining” option is for the central bank to control the SIZE OF the deficit, while politicians continue to control the NATURE OF the deficit. That option has been advocated by Positive Money for years and was recently given the thumbs up by Ben Bernanke.
Under MMT, one option is for central banks to make it very plain to politicians (as they do at the moment) that if politicians spend what the central bank thinks is too much, then the central bank will raise interest rates ... RM
Except MMT advocates a PERMANENT zero interest rate policy.
... so as to damp down demand. ibid
And if taxes are used to tamp down demand then they MUST fall on the non-rich since the rich don't consume enough to matter.
whereas when Democrats occupy the White House, congressional Republicans become fiscal conservatives. Tom Hickey
Actually, many Republicans are not opposed to deficit spending per se but on BIG government. Thus the near UNIVERSAL popularity of direct cash distributions to citizens since those don't increase the size of government.
Andrew. You're right: MMT does advocate a permanent zero rate. I should have remembered that. Though personally I'd go for Milton Friedman's variation on that, i.e. AIM FOR a permanent zero rate, while leaving open the option of using interest rate hikes in an emergency.
Kelton finally gives credit to Trump and his fiscal policies, however, she had to be asked and pulled out of her. All the while, as Trump expanded the fiscal flow, she and other leading MMTers were silent. They say they are apolitical, but their silence says otherwise.
No better way to validate your hypothesis than to point out the real world demonstration of it while it’s happening...
“ Of course, DJT had a compliant legislature,”
So do Dems right now what’s the problem? TDS much?
They say they are apolitical, but their silence says otherwise. Mike Norman
My theory is that supporting Trump's tax cuts would be way too much evidence that the MMT School are pro-rich (in addition to being pro-bank, which is undeniable).
So do Dems right now what’s the problem?
The GOP generally lines up behind the leadership in voting and they vote as a unified bloc, which is the basis of the party system.
That is not always the case with Democrats. Now the swing vote is only one. Joe Lieberman undermined Obama, and Manchin can do the same with Biden if he doesn't get what he wants.
Sen. Manchin holds key to Biden's progressive agenda
" Politicians will then have to explain to mortgagors why interest on their mortgages has risen."
That would be easy. Unelected people overriding the elected representatives.
Then the elected people sack the unelected wonks.
Which would be the correct approach. Having High Priests in central banks that politicians have to bend knee to is the wrong approach.
Certainly in England. We threw that game out in Henry VIII time when we sacked the Pope
The memorable Kelton/Trump victory against WeThePeople
Comment on George Eaton on ‘MMT economist Stephanie Kelton: “Donald Trump changed the terms of economic debate”’*
George Eaton reports: “I asked Kelton whether she believes Donald Trump has changed the terms of economic debate. “Absolutely. When he passed the $1.9trn tax cuts in 2018, which everybody knew were going to increase the deficit, I saw Senator Sanders, and he said to me, ‘Is this you? Did you do this?’ And I replied, ‘It’s a good thing. It’s a good thing in that it’s going to show you can make use of the budget when you have power to carry out your agenda.’”
Yes, of course, it was a good thing, because deficit-spending/money-creation has always been a good thing for the Oligarchy.#1 The 3-sector Profit Law Q≡(G−T)+(I−S)+Yd implies Public Deficit = Private Profit. Therefore, more deficit-spending/money-creation results in due time in a macroeconomic profit explosion.
The relationship between deficit and profit as given by the Profit Law, however, is either not well understood or deliberately obfuscated in the public debate. MMTers, of course, do not openly admit that they are working for the Oligarchy but pretend to fight as upright Progressives against austerity and for the welfare of WeThePeople. The result has been an utterly confused and confusing propaganda war.#2-#6
President Trump finally did what Stephanie Kelton and the other MMT agenda pushers have argued for in academia and on social media long before 2018: “What did we [the US] do? We spent trillions of dollars [to save the economy]. So do I feel vindicated? Hell yeah, I feel vindicated. It’s been apparent to anyone paying attention who has been getting this stuff right.”#7 Except for the fact, that MMT is refuted on all counts.#8
Without a doubt, President Trump's tax cut was a triumph for all the Oligarchy's women and men. In the meantime, MMT has been declared official doctrine.#9
However, the propaganda war goes on. As Stephanie Kelton announced: “We’re still going to have differences, but at least our debate won’t be bogged down by this threat of running out of money or bankrupting our children and grandchildren, all that stuff.”
Yes, the counterfeiter household never runs out of money and never stops stealing from the rest of society and will with an emphatic smile trick the children of WeThePeople into paying in all eternity interest to the children of the Oligarchy.
COV19 is a godsend for the Oligarchy. The Profit Law says, the bigger the public deficit the higher private profit.#10 Mr. Trump handed out a massive free lunch to the Oligarchy, Mr. Biden will even surpass him. Academic economists will cover the fraud and deceive WeThePeople with proto-scientific garbage. After all, serving the Oligarchy has always been the actual job of presidents and professors.
Egmont Kakarot-Handtke
References
We threw that game out in Henry VIII time when we sacked the Pope NeilW
Now if you'd only throw out privileges for private credit creation.
Or is it to be of, by and for government privileged usurers?
Yes, the counterfeiter household never runs out of money and never stops stealing from the rest of society Egmont Kakarot-Handtke
No, the monetary sovereign MAY and SHOULD create new fiat.
The problem then is how to do so without violating equal protection under the law.
One way is an equal Citizen's Dividend to replace all fiat creation for private interests such as banks and asset owners.
And you should not speak of theft when you'd provide the so-called "credit worthy" with loans from the Central Bank.
Andrew Anderson
You say: “No, the monetary sovereign MAY and SHOULD create new fiat.”
Of course, the Central Bank should provide additional transaction money if the economy and the wage bill are growing. This is exactly what CB's are for. Things go badly wrong, though, if the additional money is not injected on the supply side but on the demand side. In this, case the CB acts like a counterfeiter.#1 Creating money and buying stuff means stealing from the rest of society and pushing up the profit of the business sector, i.e. creating the insane distribution of financial wealth that you can observe by switching on your brain and looking out of the window.
Egmont Kakarot-Handtke
#1 Criminals and the monetary order
https://axecorg.blogspot.com/2019/10/criminals-and-monetary-order.html
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