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Thanks again.
Thanks again.Let’s examine your “mathematically possible” scenario. A tax rate of 29% on $100 of X gets you $29 of tax revenue. It would take about $132 of X (32% more) in order to get $29 of tax revenue at a tax rate of 22%.
That shows it would take about a 32% growth of the tax base (a tall order indeed) for a tax rate of 22% just to break even with a tax rate of 29%.
True. Largely COVID, and also the Democrat's spending spree which made that inflation needlessly worse, historic levels in fact.It was the supply chain issues that caused the inflation.
I'm on record here stating my position that the COVID relief was overly generous. I still stand by that positon.It was the COVID payments (which I think were handled poorly) that kept people off the street and businesses from closing.
See post #449, where interest on the debt is second only to SS payments.I have correctly explained the mechanics of deficit spending (which you did not know), and I have also explained why your fears have not and will not come to pass. You have provided nothing in the way of evidence or historical precedents to back your claims.
Firstly you claim I'm blaming the Fed for 'any and all economic hiccups', I'm not , and rather defend this baseless assertion, divert off into another topic.Clearly you don't understand how money gets into circulation.
Ahem. The value of the dollar did exactly what I said it would when there's more money put into circulation.The last time that the Fed did more "money printing" than normal was QE, and QE didn't have any of the disastrous effects that a lot of economists were worried about. That was 16 years ago; it's about time you figured that out for yourself.
I didn't say that you said "end the Fed." I just said that you are adopting the same arguments as those who say "end the Fed." You both blame the central bank for inflation.
Highlighting: "net interest costs on the federal debt reached $881 billion, surpassing most other federal budget categories except Social Security"
Sorry, but you've just blown any credibility you might have had on the topic.
True. Largely COVID, and also the Democrat's spending spree which made that inflation needlessly worse, historic levels in fact.
I'm on record here stating my position that the COVID relief was overly generous. I still stand by that positon.
See post #449, where interest on the debt is second only to SS payments.
Firstly you claim I'm blaming the Fed for 'any and all economic hiccups', I'm not , and rather defend this baseless assertion, divert off into another topic.
Ahem. The value of the dollar did exactly what I said it would when there's more money put into circulation.
QE Programs and Dollar Value
The value of the dollar fell. Its purchasing power diminished. Goods and services got more expensive for the customers.
This pointing out the problem with government spending the Congress' apparent attitude that the American tax payers are little more than an bottomless ATM machine to them.Name one time where the government needed money and couldn't come up with it. Go ahead and ask Pete Peterson if you need help.
Refuted this. 22% will always be less than 29%. This is a mathematical fact. Belief has nothing to do with it. It’s mathematical fact.I've shown it to be mathematically possible and you're just restating what you said before, now for anyone reading through this besides you would pretty much understand how you haven't did anything besides talk about history which isn't relevant in this case and restate the same things I've been debunked. But you can go by what you believe I guess...
Okay rahl...Refuted this. 22% will always be less than 29%. This is a mathematical fact. Belief has nothing to do with it. It’s mathematical fact.
The Republican fantasy that tax cuts cause a magical increase in economic output, therefore tax cuts pay for themselves, is a proven lie. It has never happened in the 4 decades they have been doing it. All that has happened is deficits and debt has exploded because revenue collected decreased.
The US has extensive campaign finance laws under the administration of the FEC. We also have a public financing option for Presidential candidates. Public financing has effectively been crippled by Barack Obama who broke his promise to use public financing exclusively when he found he could raise more in private donations.Some countries have campaign finance laws.
America should try it.
In Canada you have to actually get out and meet the public. Maybe if you crippled the lavish campaign financing and made them actually get out and meet the voters....
Maybe you wouldn't end up with "rich and stupid" anymore
Okay rahl...
This pointing out the problem with government spending the Congress' apparent attitude that the American tax payers are little more than an bottomless ATM machine to them.
Further, your premise is demonstrably incorrect.
I mean I could go on and on, this is only a sample.
Your assertion "the government needed money and couldn't come up with it" specific to government programs has been demonstrated as being false.
In the larger context, the US federal government over all, yes, its come up with money, by mortgaging our children's future, burdening them with unsustainable levels of federal debt.
The current US national debt is almost $37 trillion and represents over 120% of US gross domestic product. Pre-pandemic in 2019 the debt was $27 trillion.The news gets worse. Even when the American economy performs strongly, often despite the efforts of the political class, the debt continues to rise. That has been the case since 2001. Moreover, servicing the debt is becoming increasingly expensive with the costs driven by both the higher level of debt and the higher interest rates that the Federal government must pay. Given the short-term nature of much of the US national debt, there will be further increases in the 2.97% average interest rate paid in 2023, at least in the next year or so. The Federal government is currently having to borrow additional money to pay its interest bill. Books on financial literacy do not recommend that type of behavior.Mortgaging America’s Future - Nicholas Hoffman and Company
Short term drama tends to distract attention from long term thinking. There is no current shortage of short-term drama when it comes to American daily life. So, we should ask: what long-term issues are being downplayed, or outright ignored, as our attention is grabbed by bizarre and tragic...nhoffmanandco.com
There is no borrowing from banks, and there is no borrowing from the private sector.
That is not a debt situation. That is a self-funding government funding themselves.
I’m sorry that your ideological beliefs ran face first into the brick wall of reality.Best to leave it here. Rahl's method is to relentlessly repeat dumb stuff until you go crazy.
When the government issues bonds, somebody buys them, whether it's a bank, a pension fund, or China. Even if reserves are exchanged in the process, the government is still increasing liabilities - that’s borrowing. Saying the government doesn’t borrow because it issues bonds in exchange for reserves is like saying I didn’t borrow money, I just gave someone an iou in exchange for cash.
If the government is issuing bonds it must repay with interest, it is debt by any meaningful definition. Calling it "self-funding" sidesteps the fact that obligations have been created and must be serviced, just like any other debt.
You people are downright dangerous.
Phew, almost thought you were going against MMT and not the politicians.True, but irrelevant, because MMT gives political cover to do exactly that.
The temptation.... that always existed?the temptation to spend becomes politically irresistible
It's almost like the role of policy isn't to abolish competing interest and instead to adjudicate between them based on actual data.because every special interest group claims "underused resources."
Actually it describes what the state can do if it understands its own monetary sovereignty. That's a difference between prescriptive and descriptive economics. However I would like for you to pinpoint me to where in MMT it is saying, "Politicians are angels who will always spend money on perfect social programs and never waste a dime." I mean going by your logic I could say every economic theory is invalid.MMT assumes a benevolent, rational state. The reality is a bunch of idiot politicians who do what benefits themselves.
All governments understand monetary sovereignty. Here's a short list of some of them, but by no means all of them:
View attachment 67575465
You servicing a debt takes real resources - your limited labor. The government uses no real resources to service their "debt."
They can never run out of what they need to service those bonds.
OK. Which of these examples had no underlying economic problems that were the real cause of their inflation?
Paying interest injects money into the economy, correct? That money buys real goods and services, drawing on real resources. If it didn’t, there would be no risk of inflation.
Sure, it can create more dollars. Can the government guarantee those dollars will always buy the same amount?
Name a government that has no underlying economic problems.
"The fire only got out of control because the house was made of wood."
right. Which if this were actually true, we can then stop all tax collection and the government can simply print and spend as much as needed to cover whatever expenditures it desires.Government funding, which was what I was talking about before, costs the government nothing and does not draw on real resources. That was an argument about why govt. debt is not true debt.
It was only a matter of time before you fell back on the ol' hyperinflation stuff.
You neglect the increased economic activity and the tax it generates when people have more money left from their paycheck.Tax Cuts have the common sense effect on the federal register. The lower the rate, the lower the revenue. Any burst of consumption seen on the lower end, by a relaxation of the tax burden, is rendered beyond negligible by missed revenue on high income earners. In order to maximize the government's available resources, we need to reform our tax policy. I'm open to ideas, as long as they include raising taxes on the rich and raising capital gains.
Trump is set to propose some new tax policy anytime. All the old worn out talking points will be dusted off. They are going to lie boldly, unapologetic, and knowingly right to your face. "Tax cuts create jobs" "Tax cuts boost revenue" They are going to credit tax cuts for growth, that would have existed independent of the tax cut. When the top percentiles get even more money than they need, they do not reinvest it or spend it. They save it, which has no broader impact on the economy, it has an insular impact on the lucky bank account.
Some ideas floated by Trump regarding tax policy in the past...
Ending the Estate Tax...
3 tax brackets...
Lower taxes for everyone...
Lower business taxes...
We know from history that the strategy that conservatives use to sell tax cuts to the general milieu, is that tax cuts are reinvested into the economy. History has told us this is a lie. Massive tax cuts are about transferring money to the top. High income earners don't need the extra money and they save it. A massive tax cut results in the top percentiles of income earners, keeping large chunks of money, while the lowest of percentiles keep crumbs. Allow me to demonstrate.
Let's use the top marginal tax rate of 39% for income earners of $450,000... in this small sample:
(.39)(450,000)=$175,500
We know this hypothetical person actually pays a lower effective rate than 39% through deductions available to people who can afford savvy accountants.
Let's use the same tax rate on someone who made $2,000,000. I'm going to use two million because it is a large amount of money, that will illustrate my point later on, but, it is by no means even in the ballpark of what some Wall St. and silicon valley gurus make.
(.39)(2,000,000)=$780,000, once again we should note, that this hypothetical person pays a far lower effective rate after their accountant is through.
Let's look at how much someone in the middle class pays in taxes. Median income in the United States is $51,000. The current middle class tax bracket is 25%.
(.25)(51,000)=$12,750
Let's run a hypothetical.. Let's say legislation is introduced, like Trump has proposed in the past.. which lowers the tax rate across the board. Let's say everyone gets 5 points lobbed off their marginal rate.
That brings our middle class wage earner down to 20% and our twice times millionaire down to 34%.
(.2)(51,000)=$10,200. Not bad, a 5 point reduction in his rate saved him $2,550. That's a starter car for a son or daughter, or a nice family vacation. But, let's look at how much revenue the government loses when we knock 5 points off the $2,000,000.
(.34)(2,000,000)=$680,000.. 780,000-680,000= $100,000 That's a $100,000 dollar break, on an income of $2,000,000. The sheer size of those numbers compels me to favor, giving up my extra $2,550 dollars per year, if it means we have to sacrifice that much revenue.
Yu
When you see the numbers illustrated for you, can you understand the lie? Extra consumption in the middle class can be beneficial. However, excusing the absence of important federal revenue, in the name of the middle class, is a lie as plain as day. The truth is tax cuts give extra money to people who don't need it, at the expense of deficits which reinforce the conservative favorite: cutting spending. Tax cuts are a brainchild of the right, because they disrupt the government's books, which they can then use to manufacture a debt crisis, to cut programs they disagree with ideologically, and then call Democratic programs failures. If people are genuinely for cutting taxes. They must also be for cutting spending. This includes the DoD.
So, when Donald Trump and the rest of them, tell you that they are cutting taxes for you, you'll know they are lying to you. They're cutting taxes for the rich. That is who benefits here. The Republican never introduces legislation that does not include a major win for high income earners. That is a requisite of every piece of legislation. Look at the AHCA. They outright lied to you about the AHCA and disguised tax cuts for the rich, in warm and fuzzy language, like "access" and "choice".
Genuine question: If governments already struggle with restraint, how exactly does MMT make hyperinflation less likely to happen?
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