The deficit has just surpassed one trillion

The deficit has just surpassed $1 trillion. Actually, $1.033T as of September 5.

This is the largest deficit in 7 years and the largest as a percentage of GDP in 7 years as well. (4.8% of GDP.)

The deficit has experienced a rapid escalation in the past 2 years.

I don't hear any cheering from the MMT gods about this.

And Mosler is still bearish.

Deficit is $930 bln. Why are all the prominent MMTers silent on this? They should be cheering, no?

The deficit as of August 15, was $931 bln. That's the highest in 7 years. And as a percentage of GDP it's now at 4.4%, the highest in 6 years.

So why are all the prominent MMTers silent about this?

Nothing from Kelton. Mosler continues to put out bearish forecasts. (Going on 5 years now!)

They only talk about deficits when it's convenient for them?

They say they're not political, but it seems to me that not mentioning the deficit is a way of not giving credit to Trump, even obliquely.

Their information and analysis is discredited in my opinion. If you want to play objective you have to be objective.

Deficit balloons to $980 bln. Where are all the MMT gods cheering this??

A giant end-of-month spending spree in August has ballooned the Federal defiicit to $980 bln and 4.8% of GDP.

This is the largest nominal deficit since 2009 and the largest as a percentage of GDP since 2012.

The MMT gods should be cheering this. They're not. Weird.

Deficit is up 25% over last year, as I forecast. Will the "deficit is too small crowd" now change their position?

The deficit is up 25% over last year. Just reported.

I already knew this and anyone who subscribes to my MMT Trader report knew this because I see the deficit on a daily basis from my analysis of the Daily Treasury Statement.

So, this is no surprise to me. In fact, I have been forecasting this and alerting you, dear readers, about this trend from time to time.

My question, however, is to Mosler and the people who parrot him on the deficit. He (and the others) have been wrong for three years forecasting a recession based on the shrinking deficit whereas I have been consistently and correctly pointing out that it's all about flows.

I follow fiscal flows, each. No one else does that. Flows have been very, very, strong.

So the question is, will Mosler now get bullish? His whole entire premise has evaporated. He's been dead wrong. Will there be any consistency to his view? I doubt it.

CBO says deficit going to grow this year as I predicted. What are all those "deficit is too small folks" going to say now?

The Congressional Budget Office is out with its new deficit projections for 2016 and they are now saying that the deficit is going to grow substantially this year.

WASHINGTON, Jan 19 (Reuters) - The U.S. budget deficit will grow sharply to $544 billion in 2016 after six years of declines, largely because of permanent tax breaks that Congress passed late last year, the Congressional Budget Office said on Tuesday. Read more.

This is what I said several times and most recently, about a week ago here.

So the question is, what are all those "deficit is too small" folks/economists going to say now? They've been wrong for 5 years, looking at the shrinking deficit. They won't change their tune, I bet. They'll stick with their stubborn ideology and just keep saying it's "still too small."

We were right the entire time here at MNE. Matt Franko, myself, looking at flows, topline gov't spending, price setting currency markets by exporters etc, and none of this, getting harder to get nonsense.

This is the place to be. By the way, the budget projections were already in my new report, Fiscal Trend Trader. Front page. Even before the CBO released its report

Bloomberg gives props to 9 people who saw the euro crisis way before it happened and 5 of them are MMT people!

Bloomberg calls out 9 people who predicted the euro crisis before it happened and 5 of them that they mention are MMT people.

They are, Wynne Godley, Matt Forstater, Stephanie Kelton, Warren Mosler and Randy Wray. Kudos!

Time to ask ourselves, why hasn't MMT caught on?

I am drawn to write this because of a comment I made on an earlier  post that started me thinking about MMT and its lack of broad acceptance.

Bill Mitchell, whom I have great respect for and who is an awesome writer and fierce proponent of MMT, writes in his blog today:

"...demonstrates a palpable failure to comprehend what the real issues confronting the Eurozone are and how Eurozone Member States (19 of them) are fundamentally different in terms of fiscal capacity relative to nations that issue their own currency."

Mitchell's an extremely smart guy, but he seems to suggest that Germany's leaders (and elsewhere in the ruling class of Europe) don't understand the difference between the whole currency issuing and non-currency issuing thing. Basically it's a statement that they're all stupid.

Now let me just fully disclose that I have been of this view for a long time and I have written, here, numerous times about my run-ins with people like David Stockman who totally contradict themselves left and right when they spout their nonsense. I have argued that this had to be a sign of stupidity because a really clever yet manipulative person who knew the truth, but was intent on spewing propaganda would have his/her story worked out in a way so as not to look self-contradictory. In other words, so as not to look stupid.

Furthmermroe, over the years of publishing this blog I have receieved dozens of emails from readers telling me that they used to think the way the mainstream thought, but thanks to MMT and a little reflection they have had an epiphany and now see, clearly, how the prevailing "wisdom" is all wrong. Furthermore, most of these folks had no formal training in economics, which is proof that people can shed false dogma's if they wish. I know I certainly did.

Matt Franko and I have spoken about this, too, where we have  pretty much agreed that it was stupidity that causes these folks to stay with their dogma despite mountains of evidence and proof that they are wrong (think: Reinhart and Rogoff fiasco) or, simply by looking at the ongoing failure of their policies and theories.

In the past I'd argue with Warren Mosler about this. Mosler would insist that many in the economic mainstream really knew the truth, but for whatever reason (and he offered no explanation) they would continue spewing their nonsense. I used to tell Mosler that he was naive and crazy to beleive that, but now I am beginning to think that Mosler was right. This has led me to see why, after 20+ years, MMT has gone nowhere and it won't go anywhere.

The powers that be have absolutely no reason to embrace MMT and change the way the game is being played. What for? The wealth and power that they are accumulating, which I am sure is beyond their wildest dreams, is reason enough to stay with the status quo even if the underlying concepts are "wrong." (Wrong for whom?)

Seriously, what reason do they have to change over to a system that would be more fair and equitable to everybody else when it does absolutely nothing for them? It's like Hillary Clinton saying she wants corporations to "share" more of their profits or, Paul Tudor Jones thinking there's a "free market" answer to inequality. The system has avarice and inequality built into its very nature and it was made that way not by kindness and gentle cajoling, but by brute force. To take it away requires brute force as well, but that ain't gonna happen. It simply cannot be wrested away and certainly not by a bunch of professorly dissertations or blog posts. Those in power don't give a shit about blog posts unless it suits their interests.

Look at Bernie Sanders. He may not be full blown MMT, but he's close and he has Stephanie Kelton working with him. Sanders is attracting huge crowds wherever he goes because regular people--Democrats and Republicans--love his message, but what chance does he have of winning? The powers that be will crush him when it comes to fund raising and they will be able to drown out or twist and poison his message and I'm sure he knows  that.

Furthermore even if Sanders was elected president how would he get his policies passed? He'd certainly be facing a Congress where most members were put there by the elites for the very reason of thwarting him. Sanders thinks it's a matter of more people voting, but I think he's naive on that  point. Over 60 million people voted for "change" when they voted for Obama and look what happened: more of the same.

Granted, Sanders would not be another Obama as he has plainly stated and I totally believe him on that point, however, this groundswell of grassroots support that he says is necessary to really affect change is not likely to happen because endless amounts of money would be spent to keep people voting against their own interests.

Even now you are starting to see many left-leaning pundits and some notable Democrats working hard to marginalize Sanders. Some might be tempted to say they are cannibalizing their own, but that would be incorrect. They just don't want to rock the system where they, too, have a place. Maybe not the top place, but a place nonetheless.

Perhaps I'm being too pessimistic. If I am, please, tell me why. Tell me where I am wrong. Tell me where I am making a mistake and all we need is more time and patience and enough people voting. Personally, I just don't see it.

If it's jungle  out there with a bunch of predators running around then we have to become one of the predators and not the prey. We need to get into the ruling class etiher by buying into it or riding its ideological coattails. I'm pretty sure that all of you who read this blog won't be able to stomach the latter. So that leaves only option #1. Let's roll!

My podcast for Monday, Dec 8. Interview with Matt Franko.

Matt Franko is my buddy and a contributor to this blog. The guy is a smart, thoughtful, considerate, articulate and a really good dude. Listen to my interview with him.

My podcast for Monday, Dec 8. Interview with Matt Franko, contributor to this blog.

And, Ironically, We Already Know That Most Of What's Taught In ALL History Is Incorrect!

(Commentary by Roger Erickson)

Yes, all history is at least slightly wrong, directly, or at least indirectly, based on false premises.

I finally watched this Big History Project introductory video.

Pity there isn't yet a similar one specifically for our our own, recent history of political-economics, since propagation of wrongly-taught parts of that history still grossly distorts our current policy choices. That last outcome, of course, is pushing us to needlessly bet the national farm (esp. the MiddleClass) and run untold Output Gaps, all based on faulty understanding of our historical path and the present situation it delivered us to.

Why is all history wrong?

Need you ask? All, "science" is merely a derivative of the Latin word 'scientia,' for knowledge or "knowing" - as opposed to merely thinking or believing. The entire "scientific method" is merely a graceful approach to conflict resolution, for the older, highly violent competition among ideologies (aka, religions).

Most research projects, PhDs and Nobel Prizes are dedicated to disproving what we had previously thought proven.* Live with it. It's called doubt & uncertainty, and it's what we, as Context Nomads, have insane amounts of fun migrating through.

Science is ENTIRELY the practice of further discriminating between what we THINK we know, and what we're SURE we know.

That process, by definition, can never end.

So will we ever truly KNOW our own history?

The more we chase it, the more we extend it! :)

ps: Semantics is also raising it's confusing head again. If we'd just rename the ENTIRE concept of "science" as "Doubt vs Certainty" - then we'd solve untold arguments, worldwide, and alleviate untold man-hours uselessly diverted to them. Then maybe we'd get somewhere from here, sooner.

* Yes, discussing real data is still often verbally violent, but I haven't yet seen the orthodox try to burn Mosler at the stake :) - they've only enforced excommunication. Obviously, they don't want to talk about it. :)

Maybe a movie series called "Warren Mosler and the Aggregate Demand" is in order. Featuring a surprise backlash ending, with Warren himself as "He Who Must Not Be Named."

Eureka! Warren Mosler FINALLY Beginning To Be Plagiarized By The Orthodox. Only Took 20 Years.

   (Commentary posted by Roger Erickson.)

http://moslereconomics.com/mandatory-readings/

http://www.slate.com/blogs/moneybox/2013/10/23/how_to_fix_everything.html

So Rand Paul's not the only one.

At this point ... WHO CARES!

Can EVERYONE start plagiarizing Mosler? Please?

And Randy Wray? And Bill Mitchell? And Robert Eisner, Michael Kalecki, Abba Lerner ... on to Beardsley Ruml, Marriner Eccles, Thorstein Weblen, CH Douglas, JJ McGeer and ... and all the way back to John Law?

Then add some Bill Black ....

And even some enlightened policy operations, capable of at least TRYING to fuse at least credit, currency and criminology into one, adaptive, policy channel? Maybe in realtime?

Wow. Wouldn't that be minimal ... as a start?

Still Time to Support Warren Mosler's Congressional Campaign

Running, Independent for U.S. House - Delegate from US. Virgin Islands

He's running against the existing incumbent, who at first glance seems to be a political populist lacking any operational experience. Should be interesting.