Atlanta Fed reduces Q2 GDP forecast once again, as I said they would

 Back in April, the Atlanta Fed's first GDP forecast for Q2 was 4.2%. I said that was ridiculous based on the year-over-year drop in net government transfers. I said they would have to revise that lower, probably equal to Q1 GDP of 1.6% if that. And sure enough, they did...FIVE TIMES, until they got it down to 1.5%-1.6%.

Then, because of one strong retail sales report in May, they boosted it back up to 3.2%. Once again, I said they'd have to bring that down because the year-over-year drop in net government transfers had gotten worse. And sure enough, they did. Now they have it at 2.1%, which probably has to decrease even more.

I don't know what their model is, but mine is very simple, more accurate, and timely. Net government transfers are the first derivative of all economic activity.

Dems warn Trump could “stoke inflation!”…

 

Dems doubling down on their current moron monetarist thesis that a plurality of voters will prefer the current regressive high interest rate policy over some other less regressive Trump fiscal/monetary policy…

Sixteen of the world's most notable economists — all Nobel Prize winners — are warning that former President Donald Trump could stoke inflation if he wins the presidency in November and moves forward with his economic plans. https://t.co/JRbXTuje2F

— CBS News (@CBSNews) June 26, 2024

Watch this Movie — Bethesda 1971

The Daily Kos is influential "on the left." This is good review of "Finding the Money" and hopefully it will wake more folks up to the fact that affordability is not the issue but rather the availability of real resources.

Daily Kos
Watch this Movie
Bethesda 1971

Everything you want to know about MMT — Lars P. Syll

One of the positive contributions of MMT, especially from a European point of view, is that it makes it transparently clear why the euro-experiment has been such a monumental disaster. The neoliberal dream of having over-national currencies just doesn’t fit well with reality. When an economy is in a crisis, it must be possible for the state to manage and spend its own money to stabilize the economy.

Lars P. Syll’s Blog

Everything you want to know about MMT
Lars P. Syll | Professor, Malmo University

Print Money in Structured Manner to Plug Deficit Instead of Raising Taxes, Economist Tony Mwiti Advises Kenyan President William Ruto — Muyela Roberto

MMT without naming it.

Tuko (Kenya)
Print Money in Structured Manner to Plug Deficit Instead of Raising Taxes, Economist Tony Mwiti Advises Kenyan President William Ruto
Muyela Roberto

Trump floats concept of eliminating the income tax and replacing it with tariffs

 

Even libertarian douchebag and alleged STEM degree Massie on board….  Would need a big GOP sweep to get it passed….

I guess the tax elimination is going to over ride the debt doomsday thesis of these libertarian morons in their pea brains….  Hard to understand how their brains work….

I’d  take it…  we could get rid of the tax but they would still be stupid…

Can’t have everything…

👍

Most intriguing policy idea from the GOP meeting at the Capitol Hill Club this morning:

Trump briefly floated the concept of eliminating the income tax and replacing it with tariffs. 🧐 pic.twitter.com/hw0k8gwlGa

— Thomas Massie (@RepThomasMassie) June 13, 2024

IMF: Dollar’s "stealth erosion" in global reserves by other currencies—Serkan Arslanalp, Barry Eichengreen, Chima Simpson-Bell

Taking a longer view, over the last two decades, the fact that the value of the US dollar has been broadly unchanged, while the US dollar’s share of global reserves has declined, indicates that central banks have indeed been shifting gradually away from the dollar.

BNE
IMF: Dollar’s "stealth erosion" in global reserves by other currencies

Serkan Arslanalp for the IMF, Barry Eichengreen, Chima Simpson-Bell

MMT — the key insights — Lars P. Syll

As has become abundantly clear during the last couple of years, it is obvious that most mainstream economists seem to think that Modern Monetary Theory is something new that some wild heterodox economic cranks have come up with. That is actually very telling about the total lack of knowledge of their own discipline’s history these modern mainstream guys like Summers, Rogoff and Krugman have.

New? Cranks? Reading one of the founders of neoclassical economics, Knut Wicksell, and what he wrote in 1898 on ‘pure credit systems’ in Interest and Prices (Geldzins und Güterpreise) soon makes the delusion go away….

Lars P. Syll’s Blog

MMT — the key insights
Lars P. Syll | Professor, Malmo University

Senior mainstream economist now admits central banks are not as independent as many believe — Bill Mitchell

The UK Guardian published quite an odd article the other day (May 30, 2024) by Mr GFC Spreadsheet Fudge Man Kenneth Rogoff – Why policymakers are more likely to risk high inflation during periods of economic uncertainty – which essentially claims that economic policy has been conducted for several years by institutions that do not meet the essential requirements that are specified by the mainstream New Keynesian macroeconomic approach, upon which the institutions have claimed justification. If that makes sense. He now claims that the eulogised principle of ‘central bank independence’, which is a mainstay of the New Keynesian justification that macroeconomic counter stabilisation policy should be left to monetary authorities and that fiscal policy should play a supporting but passive role, no longer exists as policy makers have had to come to terms with multiple crises. Of course from an Modern Monetary Theory (MMT) perspective such independence never existed and was just a ploy to allow the governments to depoliticise economic policy making and thus distance themselves, politically, from the fall out of unpopular policy interventions. If it wasn’t the IMF to blame, then it was the ‘independent’ central bank for austerity and interest rate hikes and all the rest of it. Now we have a senior Harvard professor admitting it was a ruse and bemoaning the fact....

William Mitchell — Modern Monetary Theory

Senior mainstream economist now admits central banks are not as independent as many believe
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW,

See also

Lars P. Syll’s Blog
The deficit myth
Lars P. Syll | Professor, Malmo University

Odd posts from Warren Mosler claiming "crowding out."

Investment boom, crowding out consumption.

— Warren B. Mosler (@wbmosler) May 31, 2024

Odd "X" posts from Warren Mosler recently talking about "crowding out." He says business investment is "crowding out" personal consumption. This is an odd claim because crowding out is not a condition that would be claimed under MMT understanding, where money is a function of demand and where there is no theoretical limit to its creation. (Under a free-floating FX regime.)

If business spending rises and personal consumption falls, so what? All that is, is a shift in the cohort doing the net spending. The economy may look a little different (factories getting built rather than expenditure on consumer goods, leisure, etc), but why is that a concern and how does he conclude, necessarily, that this is the reason for an economic slowdown?

It's wrong and it misses the main point which is the fact that the slowdown in the economy is coming from a decline in net government transfers (i.e. the "deficit") because "reverse stabilizers" are kicking in. (Tax deposits are rising faster than Treasury withdrawals.)

He ought to know this.