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letsgetitdone's picture

When Will the White House and OMB Ever Learn About Sector Financial Balances?

In my last post I asked this same question about the House Budget Committee. As my readers saw in that one, the attempts at deficit reduction leading to budget balance were so severe that they implied that if the House budget were followed, and if the economy did not collapse before the decade projection period ended due to a collapse of aggregate demand, then private sector deficits would be produced in every year from 2017 – 2025. In addition, since the budget provided for severe cuts to federal spending designed to benefit poor people and the middle class, it was likely that the private losses from this budget would be concentrated on the people who can least well absorb them.

In this post, I'll review the sectoral financial balances implications of the White House/OMB projections to see how they compare to those of the House Budget Committee. I'll begin by repeating the explanation of sectoral financial balances basics I included in my earlier post. Read more about When Will the White House and OMB Ever Learn About Sector Financial Balances?

DCblogger's picture

Transit Advertising

Russia Today is running a very aggressive advertising campaign on DC buses. A large banner asks "what happens when you don't have a second opinion" with a very sinsiter picture of Colin Powell holding the infamous vial, and another banner saying "get a second opinion" RT,com.

Clearly Putin has learned from Radio Liberty and Voice of America and wants to give us a taste of our own medicine. Personally, I am all for it. Read more about Transit Advertising

letsgetitdone's picture

When Will CBO and the House Budget Committee Ever Learn About Sector Financial Balances?

It never ceases to amaze me that those who offer budget plans and projections never take into account the reality that their projections must be consistent with implications of trends in sector financial balances for their projections. This is a simple lesson that those playing the fiscal responsibility game never seem to learn. Certainly this is true of the Republican House Budget Committee, as we'll see.

The Sector Financial Balances (SFB) model is an accounting identity, and these are always true by definition alone. The SFB model says:

Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0.

The terms refer to balances of flows of financial assets among the three sectors of the economy in any specified period of time. Why must there be flows? Because the three sectors trade financial assets with one another. So, the equation says that the sum of all the balances of flows for the three sectors of the economy is zero, because, since there's only so much in assets traded in any time period, the positive balance(s) of one or more sectors relative to the others must be matched by the negative balance(s) of the other two sectors. Read more about When Will CBO and the House Budget Committee Ever Learn About Sector Financial Balances?

US & Its Axis of Evil Now to Bloodbathe Yemen!!!

So once again, international law is the enemy of the US and its Axis of Evil which includes Saudi Arabia and Egypt.

One more country on the bloody clipboard of US hegemony is doomed for criminal and savage destruction.

Niles Williamson in “The war in Yemen and the American drive for global domination”: Read more about US & Its Axis of Evil Now to Bloodbathe Yemen!!!

letsgetitdone's picture

The New York Times Covers the TPP: A Commentary

Wikileaks did us all another service yesterday by releasing the “Trans-Pacific Partnership Agreement (TPP): Investment Chapter Consolidated Text,” and collaborating with the New York Times to get the word out. Jonathan Weisman wrote the story for the New York Times. Apart from providing a very high level and very selective summary of what the chapter says, the article contains talking points used by proponents and opponents of the TPP. I think a close commentary on the article and associated issues would be useful. So here it is. Read more about The New York Times Covers the TPP: A Commentary

Return of the Firing Squad!!! WTF???

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In “The firing squad returns to America” Barry Grey rails against the re-institutionalization of the firing squad for capital punishment in the state of Utah this week.

How is this systematized sadism and violence to be explained? Can we expect to see demands for the return of other practices? What about drawing and quartering, evisceration, garroting?

The Triangle Shirtwaist Factory Fire of 3/25/1911 -- 100+ Women Burned to Death Awakening the US Conscience to Labor Rights

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Re-post from 3-18-11

[historical info taken from American Experience presentation and poetry from Jonathan Fink]

On April 5, 2011, 400,000 New Yorkers, 1 out of 10, showed up in the rain to mourn the deaths of 146 garment workers, mostly young immigrant women, who had died in the deadliest workplace accident in New York history. Read more about The Triangle Shirtwaist Factory Fire of 3/25/1911 -- 100+ Women Burned to Death Awakening the US Conscience to Labor Rights

letsgetitdone's picture

Thoughts About the Trans-Pacific Partnership

During a recent Amy Goodman interview of Lori Wallach, director of Public Citizen's Global Trade Watch, on her Democracy Now show, Wallach neatly summarized the problems of progressives with the TPP:

Well, fast-tracking the TPP would make it easier to offshore our jobs and would put downward pressure, enormous downward pressure, on Americans' wages, because it would throw American workers into competition with workers in Vietnam who are paid less than 60 cents an hour and have no labor rights to organize, to better their situation. Plus, the TPP would empower another 25,000 foreign corporations to use the investor state tribunals, the corporate tribunals, to attack our laws. And then there would be another 25,000 U.S. corporations in the other TPP countries who could use investor state to attack their environmental and health and labor and safety laws. And if all that weren't enough, Big Pharma would get new monopoly patent rights that would jack up medicine prices, cutting off affordable access. And there's rollback of financial regulations put in place after the global financial crisis. And there's a ban on "Buy Local," "buy domestic" policies. And it would undermine the policy space that we have to deal with the climate crisis—energy policies are covered. Basically, almost any progressive policy or goal would be undermined, rolled back. Plus, we would see more offshoring of jobs and more downward pressure on wages. So the big battle is over fast track, the process. And right now, thanks to a lot of pushback by activists across the country, actually, they don't have a majority to pass it. But there's an enormous push to change that, and that's basically where we all come in.

10 Considerations Post Netanyahu’s Racism/Fascism Victory

1) There are 13 million residents in Israel but only 8 million of them have democratic rights ("Never Trust Netanyahu" by Lisa Goldman)

2) 650,000 armed settlers have taken over the West Bank ("Mideast Peace is Buried" by Eric Margolis)

3) Israel and its American advocates control both houses of the US Congress as well as both Democratic and Republican parties. The US provides Israel with $3 billion a year (Margolis) Read more about 10 Considerations Post Netanyahu’s Racism/Fascism Victory

DCblogger's picture

Anyone here from Las Vegas?

Town Hall: Bernie Sanders
TIME Tue Mar 31 2015 at 10:00 am
VENUE Culinary Workers Union Local 226, 1630 S Commerce St, Las Vegas, United States Read more about Anyone here from Las Vegas?

DCblogger's picture

Anyone here from Austin?

DCblogger's picture

C. Douglas Mcmillon leadership FAIL

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The Republican Plan To Sabotage The Food Stamp Program

House Republicans are set to unveil a budget on Tuesday morning that will reportedly slice over a hundred billion dollars out of the food stamps program over the coming decade.

Israeli Election: Full Fascism Loses Its Mask (coming to a country near you!)

Dan Glazebrook in “Israelis Vote to Abandon All Pretense of Seeking Peace” presents a realistic epitaph for the soul of the Israeli collective.

Let’s face it, to paraphrase Glazaebrook, the supposedly left Zionist Union to Netanyahu’s Likud maintained a hypocritical pretense over “peace talks” and seriously supported “violent colonial domination of the indigenous Arabs.” Read more about Israeli Election: Full Fascism Loses Its Mask (coming to a country near you!)

metamars's picture

Google Disables All Ads on Antiwar.com

Link

On 3/18/15 we received a note from Google Adsense informing us that all ads for our site had been disabled. Why? Because of this page showing the horrific abuses committed by U.S. troops in Iraq at Abu Ghraib.

letsgetitdone's picture

The Value of the Right Ratio Is Zero

The public debt-to-GDP ratio is, perhaps, the most important measure used in discussions of the relative fiscal sustainability of nations. Nations with high levels of debt-to-GDP are viewed as having more serious fiscal problems than nations with lower levels. Nations having increasing ratios over time are viewed as becoming less fiscally sustainable, while those with decreasing ratios are viewed as more fiscally sustainable.

But is the public debt-to-GDP ratio really a valid measure of fiscal sustainability, or is it a measure that incorporates a neoliberal theoretical bias in its fundamental assumptions? In the United States, the total value of public debt subject to the limit at any point, is the total principal value of all the outstanding debt instruments sold by the Treasury Department. The GDP is the aggregate value of the production of goods and services in the United States within a particular period of time, adjusted for price changes.

So, the public debt is a variable measuring a cumulated stock, while GDP is a flow variable measuring economic activity within a particular period of time. Why compute a ratio of a cumulated stock to a flow within a circumscribed period of time?

Well, in this case of the debt-to-GDP ratio, neoliberal economists reason that the stock, the debt, can only be reduced if the government takes away part of the flow each year to repay a portion of the stock, the debt, leaving less of the flow to add financial savings to the private sector. After all, what other sources of government revenue are there except taxation? Read more about The Value of the Right Ratio Is Zero

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