In the big budget fight going on right now in Congress, the Tea Party conservatives rightly point out that $61 Billion in spending cuts is just a drop in the bucket compared to the $1.6 Trillion predicted deficit, and they react with a great deal of moral fervor to the suggestion that they ought to compromise on $33 Billion in cuts in order to avoid shutting down the Government. That moral fervor sounds perfectly reasonable to me as long as one agrees that Government spending causes inflation, that we now have a huge deficit, debt problem in the United States that we must solve, or face national insolvency in the not too distant future, and also if the people afire with moral fervor would also apply that to the issue of the wealthy paying their fair share of taxes. Read below the fold...
Or lunch. Or dinner. This past Monday, food writer and New York Times columnist Mark Bittman began a week-long fast in protest of H.R. 1, a heinous piece of legislation that actually starves poor people:
The budget proposes cuts in the WIC program (which supports women, infants and children), in international food and health aid (18 million people would be immediately cut off from a much-needed food stream, and 4 million would lose access to malaria medicine) and in programs that aid farmers in underdeveloped countries. Food stamps are also being attacked, in the twisted “Welfare Reform 2011” bill. (There are other egregious maneuvers in H.R. 1, but I’m sticking to those related to food.)Read below the fold...
I'll be visiting my nation's longest war next week in Afghanistan, thanks to a wonderful organization called Voices for Creative Nonviolence which seeks to build friendship and understanding between countries. I'll be meeting with ordinary and prominent Afghans and reporting on what they think of their country's future -- often a more complex view than will fit into a television sound byte. Read below the fold...
(Reprinted with the Permission of the Author)
(Editor's Note: This is a long and difficult piece, originally published at Yves Smith's Naked Capitalism site, and has an academic style. But, nevertheless, if you want to understand more about what the Modern Monetary Theory (MMT) school of economics has to offer, it is well worth your investment of time. It is the definitive critique of Paul Krugman's two recent blog posts on MMT, in my view.
In addition, in the process of criticizing Paul's views, Scott Fullwiler illuminates a lot of the deep thinking and knowledge developed by those following the MMT approach over many years, now. If you read this, you can see just how far off-base Paul Krugman is in his attempt to de-construct MMT, and you can also see how much work Paul has to do to really understand what his colleague economists using the MMT approach have developed.)
The old saying that bad press is better than no press is definitely true in this case. Without the advent of the blogosphere, our work would likely never even be noticed by the likes of Paul Krugman, so the fact that he’s writing about us (here and here) this weekend at least means we’re doing better than that, even if his assessment of us is far less than glowing. At the same time, and particularly given that Krugman is so widely read, it’s imperative to at the very least set the record straight on where MMT and Krugman differ. I should note before I start that others have done very good critiques already that overlap mine in several places (see here, here, here, and here).
Krugman makes three incorrect assumptions about what MMT policy proposals actually are while also demonstrating a lack of understanding of our modern monetary system (as is generally verified by volumes of empirical research on the monetary system by both MMT’ers and non-MMTer’s). These are the following:
Assumption A: The size of the monetary base directly (or indirectly, for that matter) affects inflation if we’re not in a “liquidity trap”
Assumption B: MMT’s preferred fiscal policy approach or strategy—Abba Lerner’s functional finance—is Non-Ricardian
Assumption C: Bond markets alone set interest rates on the national debt of a sovereign currency issuer operating under flexible exchange rates
Assumptions A and C are central to the Neo-Liberal macroeconomic model. Assumption B is a common misconception about MMT and a common perception of Neo-Liberals about the nature and macroeconomic effects of fiscal policy (i.e., Neo-Liberals often believe that activist fiscal policy is Non-Ricardian). Read below the fold...
Amelia “Milka” Sablich (Check this site out - soooooo much more about her - I took some from it, thank you, and there's a page dedicated to her here.)
A lesser-known rebel girl who is definitely worth mentioning is Amelia “Milka” Sablich, also known as the “girl in flaming red” after her bright red clothes. Hailing from Trinidad, Colo., this 19-year-old was compared to the famous Mother Jones, however, the media decided Milka was much tougher. Given that she was known to get into physical fights with men, including police, it’s hard to take that away from her! Read below the fold...
(Reprinted from Moslereconomics.com with the Express Permission of the Author)
CAUTION: BE SEATED WHEN READING
By N. Gregory Mankiw
March 26 (NYT)
The following is a presidential address to the nation — to be delivered in March 2026.
My fellow Americans, I come to you today with a heavy heart. We have a crisis on our hands. It is one of our own making. And it is one that leaves us with no good choices.
For many years, our nation’s government has lived beyond its means.
A rookie, first year student mistake. Our real means are everything we can produce at full employment domestically plus whatever the rest of the world wants to net send us. The currency is the means for achieving this. Dollars are purely nominal and not the real resources. Read below the fold...
A friend, Julia Williams, writes and asks:
Isn't it true that in actuality, the US doesn't, in fact "borrow'? It spends or trades? And if that is the case, doesn't that just blow the deficit hawks out of the water?
Here's my answer to her. Read below the fold...
After the scorching he received in many of the comments on his printing press post Paul Krugman decided to dig his MMT blogging hole even deeper.
“. . . I think one way to clarify my difference with, say, Jamie Galbraith is this: imagine that at some future date, say in 2017, we’re more or less at full employment and have a federal deficit equal to 6 percent of GDP. Does it matter whether the United States can still sell bonds on international markets?Read below the fold...
The Modern Monetary Theory (MMT) approach to economics must be starting to make some waves, because today, Paul Krugman, followed his earlier attack on it and his debate with Jamie Galbraith and others last summer, with another swing at MMT. The debate last summer was an extensive one at Paul's blog site at the New York Times, and, in addition, there were a number of posts at other sites replying to Paul. The debate was a classic in the developing conflict of views between the “deficit doves” (represented by Paul) and the “deficit owls” (represented by Jamie Galbraith and other MMT writers).
Given the earlier debate, you'd expect that Paul's second try at MMT would reflect a bit of learning on his part, and also a characterization of the views of MMT practitioners that is a little more fair than he provided in his first attempt. This post will analyze Paul's new attack and assess how much he's learned. But first, I'll review the earlier debate. Read below the fold...
I seem to recall that someone, late last month, posted an entry arguing that it is immoral for Democrats not to run a primary challenge against Barry Obama in 2012, in light of the things he's done to institutionalize Bush-Cheney crimes. (Glenn Greenwald chronicled the latest violation of the Constitution by Obama on his own blog, which you can read here). Read below the fold...