Over the past year, in an attempt to head off the austerity program gaining steam in Washington, DC, I've blogged the truth about the deficit/debt problem on many occasions. That truth is that there is no deficit/debt problem, and that deficits and debts, no matter how large they may be, don't affect the ability of the United States to create more money.
So, there is not and cannot be a solvency problem, unless Congress refuses to do its duty and appropriate dollars to pay the Government's bills. Of course, if the Government spends beyond what's necessary to add enough aggregate demand for the US to get to full employment, then demand-pull inflation will result from the excess spending. But 1) we've got a long way to go until we reach that point; and 2) the inflation issue not a debt/deficit/solvency issue.
So, the solvency issue needs to be taken off the table for discussion, and certainly as a basis for action, and austerity programs and long-term deficit reduction plans like those of Paul Ryan and the Administration. In addition, our erstwhile leaders need to all get off their high horses about fiscal responsibility, fiscal sustainability, "biting bullets," "having adult conversations," and other such nonsense, and face up to their real responsibility which is spending enough, in the right way, to give every American who wants to work a job at a living wage with decent fringe benefits. Until they do that, they are the ones who are being fiscally as well as morally irresponsible. Read more about Tell Obama, everyone: there is #nodeficitproblem because we are #sovereign in our own currency
While some progressives are happy with the President's speech on the budget; others are suspicious, recognizing the President's repeated pattern of offering words that are reassuring to progressives while later acting to work against the general principles he asserts in a major speech. As Bernie Sanders is saying: “the devil is in the details.”
It surely is. But also, the devil is in the framing of the issues and the negotiation to come. And if the framing is done in such a way that the definition of the problem already implies an unfavorable solution for the middle class, American workers, the poor and the vulnerable, then I'm afraid the outcome is a predetermined defeat. So let's look at the framing in the form of a number of assertions made by the President during his speech. Read more about It's All In the Framing and That's Terrible
(573 Obama-dumping days until 2012 election-Hugh's Obama's Scandals List)
Lawrence Davidson in his article “The Ghost of Joe McCarthy Walks the Land” writes of an indifferent public and the potential motivation on moderate conservatives to question their Republicanism:
Part III – The Indifferent Public
One of the most emotional issues in American politics is the sovereignty of the United States itself, and its independence from foreign powers, interests, other nations and their ruling elites, and emerging globalizing elites who place their own interests against the nation interest of America and its people. The issues of fiscal sustainability and fiscal responsibility should be discussed from the viewpoint of our national interest, not from the viewpoint of abstract financial ratios, or supposedly critical indicators that generate a lot of sound and fury signifying nothing. Read more about Why Do “They” Want To Limit Our Sovereignty In Our Own Currency?
One commenter at FireDogLake says:
”. . . we should be exceptionally careful not to jeopardize the hard-fought for benefits (like S.S.) by risking devaluation of the dollar. That would be truly tragic.”
and another at New Economic Perspectives says about Modern Monetary Theory (MMT) and inflation: Read more about Worrying About Demand-Pull Inflation Is A Distraction
What appears to be a belated April Fool's post at Yves' place describes the mysterious death of Prof. Outis Philalithopoulos, with the disappearance of all his work on the "theory of Academic Choice".
Yesterday's must-read! Read more about Sociology of economists, without romance
(Author's Note: Most of this diary was previously published back in January; but I've revised it slightly for these reasons. First, a Government shutdown is now upon us, even though the debt ceiling issue isn't quite at the forefront yet. Second, I'd like more comments and discussion on this proposal, because, at a minimum, it would give the Treasury the wherewithal to pay Social Security interest and benefits without relying in any way on new Congressional appropriations, or on raising the debt ceiling. Read more about Use Coin Seigniorage Now!
Ah.... my fellow Americans, be very, very, afraid of the terrible Social Security crisis that will sink us as a nation. According to Government projections, we won't be able to pay full Social Security benefits, in 2037 and beyond, unless we cut benefits now, because the Social Security “Trust Fund” will be short of money.
The following is a letter to the editor that I put in my local small town weekly. A LTE has to be around 300 words, but they let me get away most of the time with 325. When writing about economic systems, 300 words is very hard. The feedback so far has been good and they liked the fish imagery. So if you've got a local paper, try something like this: Read more about Big Fish and Little Fish
Remember, all the DISemployment numbers are fake, because people who've dropped out of the job market -- "discouraged"MR SUBLIMINAL Completely rational workers -- "don't count." Literally so, eh? They're not part of the story, the narrative. Read more about Normalizing DISemployment considered harmful
If I were King of the World, I would order a massive blog swarm with the subject line JOBS.
It has been a long time since there was a true netroots blogswarm, so long I cannot even remember. But maybe if we picked one day, assuming we could reassemble a long since shattered coalition, and posted about jobs, we could get the attention of our benighted elite.
Just a thought. Read more about Jobs