GOP sees higher rates and higher taxes as the enemy…
Cuts to Medicare and Social Security are off the table.
— Kevin McCarthy (@SpeakerMcCarthy) February 6, 2023
Defaulting on our debt is not an option.
But neither is a future of higher taxes, higher interest rates, and an economy that doesn’t work for working Americans. pic.twitter.com/KhLEEhaNNx
Democrats = Higher taxes + higher interest rates… GOP = lower taxes + lower interest rates
Once they are in office, GOP policy will change. Don't claim I didn't warn you...
ReplyDeleteTrump gets back in DAY ONE will demand Fed go back to zero where it was for Obama for 8 years…
ReplyDeleteTax cuts for me, but not for thee...
ReplyDeleteWell, each has conflicting policy, with monetary and fiscal policy working at odds.
ReplyDeleteNot clear which approach is more regressive -- it depends on the relative amounts, the design of each (e.g. who are the short terms vs medium-term beneficiaries), effects of rate changes on the income channel. i think the details matter, but this also strikes me as a strong argument in favour of Mosler's permanent ZIRP or Smithin's fixed low real interest rate.
Hmmm. Didn’t know Warren switched to GOP now…
ReplyDelete“ permanent ZIRP”
ReplyDeleteThat would be stabilization of the risk free policy rate and would foment disaster as every good MMTer knows “stability creates instability!”…
So you have to have the Fed move the rates all up and down and all over the place in order to have any chance of economic stability…
The reason you need ZIRP in the vertical circuit isn't just technical. It's political.
ReplyDeleteThere can be no 'debt explosion' if there is no interest paid on the balancing items in the accounts. It ends the argument, because it costs government no more if the 'deficit' is big or small.
The debate can then be over onto whether government is getting value for money for what it is buying. Which is how you respond to the 'cause inflation' argument. You ask the hyper-ventilator whether government is paying too much for something and where it can get it cheaper. Then when they can't go down that route, you ask them to put their name down to pay more tax by handing over all their savings.
GOP will not introduce elements of MMT by stealth.
ReplyDelete