Department of Bust Out Profit Models and Vampiric Capitalism
With the end of the Summer break, now comes the return of the debt limit dance. From Treasury Secretary Jacob Lew's letter to John Boehner:
“Congress should act as soon as possible to protect America’s good credit by extending normal borrowing authority well before any risk of default becomes imminent.
“Based on our latest estimates extraordinary measures are projected to be exhausted in the middle of October. At that point, the United States will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day, The cash balance at that time is currently forecasted to be approximately $50 billion.
“. . . A cash balance of approximately $50 Billion would be insufficient to cover net expenditures for an extended period of time. And, on certain days, net expenditures could exceed such a cash balance.
“. . . Protecting the full faith and credit of the United States is the responsibility of Congress because only Congress can extend the nation’s borrowing authority . . .“
OK. So, only Congress can extend the nation's borrowing authority. But it doesn't follow from that fact that protecting the full faith and credit of the United States is the sole responsibility of Congress. Read more about Jack Lew: Avoiding Default Is Your Responsibility Too
The Five Worst Reasons Why the National Debt Should Matter To You: Part Four, The Three Real Reasons
This is the concluding post in a four part series on the “Top” reasons why the national debt should matter. In Part One, I considered “Fix the Debt's” claim that high levels of debt cause high unemployment and argued that this is a false claim. In Part Two, I followed with a review of the historical record from 1930 to the present and showed that it refutes this claim throughout this period, and that there is not even one Administration where the evidence doesn't contradict “Fix the Debt's” theory. In Part Three I showed that the other four reasons advanced by “Fix the Debt” also had very little going for them. In this part, I'll give reasons why the national debt does matter, and why we should fix it without breaking America, or causing people to suffer. Read more about The Five Worst Reasons Why the National Debt Should Matter To You: Part Four, The Three Real Reasons
The Five Worst Reasons Why the National Debt Should Matter To You: Part Three, The Other Four Worst Reasons
In Part One of this series, I considered “Fix the Debt's” claim that high levels of debt cause high unemployment and gave a few reasons why this is a false claim. Read more about The Five Worst Reasons Why the National Debt Should Matter To You: Part Three, The Other Four Worst Reasons
In Part One, of a critique of the most important of "Fix the Debt's" reasons for "Why the National Debt Should Matter To You," I asserted that high debt levels haven't caused high unemployment in the United States, and that, if anything causation was in the other direction. I didn't want to disturb the flow of the argument there with a relatively lengthy survey of some of the numbers in the historical record since the 1930s. But let's test the idea that High debt causes fewer jobs and lower wages in the United States by looking at that record now. Read more about The Five Worst Reasons Why the National Debt Should Matter To You: Part Two, the Record Since 1930
The Five Worst Reasons Why the National Debt Should Matter To You: Part One, High Debt Levels and Jobs
I came across a post from the “Fix the Debt” campaign last month called “The Top Five Reasons Why the National Debt Should Matter to You.” It's a post full of debt/deficit lies that cry out for correction. That's what I'll provide in this series. Read more about The Five Worst Reasons Why the National Debt Should Matter To You: Part One, High Debt Levels and Jobs
I found a segment on MCNBC's Up With Steve Kornacke show revealing for what it did not say. The segment started off with a clip from a Recent Town Hall of John McCain's. Senator McCain took a question from a woman who said, with more than a little emotion. Read more about “Makers and Takers:” They're Projecting Again!
The first two Parts in this series began answering the question “what would u have him do?” It arose in the context of a Post at Naked Capitalism by Michael Hudson with some additions by Yves Smith. A commenter, objecting to the criticism of the President's Knox College speech, issued the challenge in connection with the President's promised effort to restore prosperity to the middle class and the poor.
In Part I, “Necessary First Moves,” I offered and described two of these: ending the filibuster, and using High Value Platinum Coin Seigniorage (HVPCS) to fill the Treasury General Account (TGA) with $60 Trillion in reserves. In Part II, I offered a number of proposals aimed at getting to full employment.
These included: a full payroll tax holiday; a guarantee of annual entitlement spending without regard to “trust fund” balances; State revenue sharing grants of roughly $1600 per person; and a Federal Job Guarantee program establishing jobs in local communities at a living wage with full fringe benefits. This third and last part will offer proposals for doing some economic and social justice to begin to right the wrongs the neoliberal globalizing political/economic/ideological system has inflicted on the American middle class and those living in poverty. Here are the proposals. Read more about What Would You Have the President Do? Part III, Doing Some Economic and Social Justice
Responding to a Post at Naked Capitalism by Michael Hudson with some additions by Yves Smith, a commenter, objecting to the criticism of the President's Knox College speech, issued the challenge ”What would u have him do?” in connection with his promised effort to restore prosperity to the middle class and the poor. In this series I'm giving my answer to that question. In Part I, “Necessary First Moves,” I offered and described two of these. Ending the filibuster, and using High Value Platinum Coin Seigniorage (HVPCS) to fill the Treasury General Account (TGA) with $60 Trillion in reserves.
The purpose of the first was to prepare the way for substantive policies by removing the Republican minority's power to tie up legislation. The purpose of the second, was to neutralize austerian fiscal responsibility justifications for subjecting every policy proposal to a deficit neutrality test, and for opposing deficit spending on grounds that it adds to the national debt and imposes heavy risks that the bond markets will demand very high interest rates on US debt. Of course, HVPCS gets rid of both the debt and bond market concerns for good.
Neither of these two policies, however, addresses substantive needs such as creating and maintaining full employment. This post is about the policies for getting to full employment I want the President to propose and try to implement. All of these policies have been previously proposed by MMT economists including Warren Mosler, Randy Wray, Bill Mitchell, Stephanie Kelton, and others. Read more about What Would You Have the President Do? Part II, Getting to Full Employment
There were varying reactions to the President's recent speech at Knox College this week. My reaction was that the speech was deeply dishonest in light of the President's previous policies, actions, and results, and I intended to do a critique, but Michael Hudson and Yves Smith beat me to it. Read more about What Would You Have the President Do? Part I, Necessary First Moves
One of the most important parts of the collective effort to spread the good news about the Modern Money Theory approach to macroeconomics is popularization of MMT views. Read more about The Smart Bunny's Guide to Debt, Deficit and Austerity: A Review
Occupy Our Homes is asking supporters to call a bankster CEO at home to stop an eviction. Not so long ago I would not have considered doing so. Today I just did. Partly because I know that this group has stopped evictions in the past, so I am inclined to help them.
They specifically say to be nice and call at reasonable east cost hours. Read more about Fighting foreclosure
It makes a good headline; but it’s dangerous to say “austerity is dead,” just because new budget projections indicate that the deficit has already been cut by $200 Billion more than in previous projections, and because the Reinhart-Rogoff study has been debunked successfully, and, hopefully, irretrievably. Austerity will only be dead when legislators, Presidents, Prime Ministers, Central Bankers, and international lending organizations stop trying to implement it, whether or not they stop because deficits have already been cut.
Of course, those claiming austerity is dead, mean by their claim that deficit cutting efforts have already been successful enough in the United States that future projections in all the mainstream budget plans now show only “moderate” deficits (See the Table which now includes CBO revised budget projections.) These don’t signal a debt crisis, and instead suggest that we can now turn to the really serious economic, health, and environmental challenges we face. Read more about Sorry Folks, Austerity’s Not Dead Yet!
Ralph Nader believes it is time to put U.S. global corporations on the DEFENSIVE! He declares that would be “the first step for the resurgence of the people so that corporations become our servants and do not remain our masters.”
In “Patriotic Yardsticks for Unpatriotic Giant Corporations” he calls out US Global Corporations for BETRAYING America -- betraying the American citizen taxpayers that have enabled them to become so incredibly successful. Nader spells it out: Read more about Nader Calls Out US Global Corporations as Unpatriotic!
Make ‘em Prove the Causality before They Cause Any More Suffering: Part Three, Reinhart - Rogoff Retrospective
This post is a more complete statement of my conclusions based on the analysis in Parts One and Two of this series. Read more about Make ‘em Prove the Causality before They Cause Any More Suffering: Part Three, Reinhart - Rogoff Retrospective