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How is the “monetary value of real resources” computed and by who?
Based on supply and demand? Not sure what you are asking here. What determines the value of a dollar?
How is the “monetary value of real resources” computed and by who?
Sure we can.This is not sustainable.
The debt load of the U.S. is growing at a quicker clip[url] in recent months, increasing about $1 trillion nearly every 100 days.... U.S. debt, which is the amount of money the federal government borrows to cover operating expenses, now stands at nearly $34.4 billion, as of Wednesday. Bank of America investment strategist Michael Hartnett believes the 100-day pattern will remain intact with the move from $34 trillion to $35 trillion....Moody’s Investors Service lowered its ratings outlook on the U.S. government to negative from stable in November due to the rising risks of the country’s fiscal strength. “In the context of higher interest rates, without effective fiscal policy measures to reduce government spending or increase revenues,” the agency said. “Moody’s expects that the US’ fiscal deficits will remain very large, significantly weakening debt affordability.”
For those who think "Just Raise Taxes" is the solution:
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We have had tax rates a lot higher - and didn't collect anywhere close to the % of GDP we need.
Yeah, so what you're literally just saying is that "the government sucks." That's a governance issue, not a flaw in the MMT framework. It's like saying Newton's laws are invalid because you crashed your car. MMT doesn't deny this kind of misuse, instead exposes the current broken incentives and gives a way to retool fiscal priorities. The problem isn't that MMT's too lenient.In theory, sure. In practice, a huge chunk of public money ends up as corporate welfare. Just look at what politicians actually prioritize.
Great job, and MMT gives you a more clear picture of where those incentives mess up. It doesn't remove constraints, it more of shifts them from these imaginary "debt ceilings" to real-resource constraints. If you want to worry about abuse, great, use MMT to design actual policy tools like automatic stabilizers, inflation caps, and targeted spending.No, it’s more like saying democracy is flawed because the incentives facing the leaders are wrong.
MMT doesn't rely on trust in politicians, it exposes how the current system already gets misused under fake constraints and tries to make sure keeping inflation and public purpose in check. MMT builds mechanisms for constraints. MMT shows that the spending comes first, taxes come later, and inflation is the check. The current system lets them hide spending behind "we're out of money" lies while funneling trillions into corporate bailouts and defense budgets.My point is that politicians have every incentive to misuse it, and mmt makes that easier. A system which relies on discipline from the least disciplined group isn’t much of a constraint.
Interesting question. The value of real resources is determined by a mix of market pricing, political policy, and institutional capacity. MMT assumes a sovereign issuer controls the currency, but prices are shaped by productive capacity and distributional policy. MMT kind of addresses this via sectoral balances and output gaps.Who or what establishes the monetary value of those real resources and how?
And of course, MMT exposes this charade.It seems ‘our’ congress critters have the power (authority?) to continuously raise the national debt ‘ceiling’.
Higher demand is what kept businesses afloat with higher taxes. Businesses are just buying back stock with tax breaks and laying off thousands even when profits are at record highs. This notion that we cant raise taxes on the wealthy is juvenile and the republican strategy of giving tax breaks is also juvenile. We know why they do it.Republicans and Democrats are both unwilling to address the problem, and we've tried higher tax rates:
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It turns out, people are able to anticipate things, and alter behavior accordingly. So long as we are keeping our basic progressive structure, nominal revenues are driven primarily by growth (or lack thereof).
Only Ron Paul was hosing similar protests during the bush years.Except, the GOP is how conservatives express their political will and promote the policy goals they want to achieve and I have never seen these so-called ''true conservatives'' do anything to change the GOP or promote any sort of systemic change to achieve their aim of debt reduction.
Simple question, why weren't there tea party protests during the George W. Bush or Trump years? Seems like something like the Tea Party is only a big deal when a Democrat is in the White House.
Hey, if you are fine with cutting military spending, getting rid of upper-class tax cuts, and delaying a border wall until the debt is reduced at least makes you consistent on this issue.-, which is more than
Doesnt change the fact that this is all a farce and a shell game.
Everyone from Dick Cheney to Rush Limbaugh has admitted this is a con game:
Rush Limbaugh Abandons Fiscal Conservatism
Rightwing icon and firebrand radio host Rush Limbaugh once cared about reining in the federal deficit and the national debt, but not anymore. On his radioreason.com
Trump had a Republican Congress for 2 years, George W. Bush had one for 4 years, and neither of them reduced the debt.
I think the GOP intentionally increases the debt through tax cuts and military spending and then uses the large debt they created to justify cuts in social spending. The GOP will always be fine with spending for giveaways to defense contractors and other rich elites they hang out with on golf courses.
Supply side economics as the republicans have put it doesnt work and never has worked. Several small scale experiments also bear this out. Trickle down economics is a farce that is ridiculous even from a business economics standpoint. We’ve seen time and time again that it only drains public resources so badly that it ends up getting privatized for increased costs.Interesting revisionism here.
Assuming you mean supply-side economics this has never occurred in its purest form. In addition Democrats haven't been afraid to assist on the supply side. Obama with the Auto industry is a prime example.
Regarding the balanced budget during the Clinton Presidency, that was written and passed by Republicans and signed in to law by Clinton when he lost power in the first Mid year election.
Regarding the Tax Cut and Jobs Act,
1) Tax Revenues have continued to increase every year.
2) The QBI has been a huge boom for the small business owner
3) Why are Democrats attempting to eliminate the SALT Deduction if they are not interested in assisting the wealthy?
Now, I am not defending Republicans because only during a very short period did they do anything about the deficit and Trump was the worst regardless of his promises until Biden came along.
Gingrich was just the worst of them all and he is one of the biggest partisan ****stick players in this entire divide.I get it. You're in the Dem tribe and Kascih and Gingrich were dicks. The bottom line is, Clinton was the best Republican President we've had. Add to that the Clinton Crime bill.
The Balanced Budget Act was introduced on June 24, 1997, by Republican Ohio Representative John R. Kasich. There were three short titles that the act was also known as in the House of Representatives. In the House, this act was also called the Child Health Assistance Program of 1997, the Expansion of Portability and Health Insurance Coverage Act of 1997, and the Veterans Reconciliation Act of 1997.
Financial managers independent of public control to handle social security? You whot?Social Security needs to be entirely restructured. It has become the main retirement vehicle for many but was never set up or intended as such.
The way it is used today, it needs to be restructured as a mandatory 401K or IRA with financial managers independent of the government.
1,788 a month can't be a pretty way to live in this country.
Whoever manages the teacher's pension in Missouri should be under first consideration to manage a national Pension
Home
The Public School and Education Employee Retirement Systems of Missouri (PSRS/PEERS) provide a significant and stable source of retirement, disability and survivor benefits to Missouri's public school teachers, school employees and their families.www.psrs-peers.org
There has to be a term for your over the top debate tactic where you use the most extreme (and unreal) examples to try to gain sympathy (since you always seem to be out of actual, real world examples). Maybe it's just called "hair on fire".Sure we can.
All we need to do is raise the tax rate to 125% for anyone making more than $50 and confiscate all privately held property. Once we do that we can spend as much as we want because we're the government and we can print money!
Higher demand is what kept businesses afloat with higher taxes. Businesses are just buying back stock with tax breaks and laying off thousands even when profits are at record highs. This notion that we cant raise taxes on the wealthy is juvenile and the republican strategy of giving tax breaks is also juvenile. We know why they do it.
Yeah, so what you're literally just saying is that "the government sucks." That's a governance issue, not a flaw in the MMT framework.
It's like saying Newton's laws are invalid because you crashed your car.
MMT doesn't deny this kind of misuse, instead exposes the current broken incentives and gives a way to retool fiscal priorities.
MMT doesn't rely on trust in politicians, it exposes how the current system already gets misused under fake constraints and tries to make sure keeping inflation and public purpose in check. MMT builds mechanisms for constraints.
We had higher demand because workers were able to build lives for themselves. If you aint willing to tax the rich more at any point well its kinda like you said about environmentalists that hate nuclear power.We didn't have higher demand because of higher taxes. We had less. However, regardless, the point remains that we tried higher income tax rates, and we didn't get anything close to the revenues we would need to pay for the giant checks we have written.
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Even under Rosy Scenarios where interest rates remain low, growth remains steady, and Nothing Major Bad Happens Ever Again.... we are screwed.
We are going to have to raise taxes in ways that hurt (meaning on middle income earners as well as upper income earners, and probably also on lower income earners) and we are going to have to cut spending in ways that hurt (meaning reduction in benefits to people who planned for them), and the longer we wait, the more it's going to hurt.
And we are going to wait until the last minute.
Alternatively, we could just try to print out way out of it, and crash the global economy. That's the stupidest solution, so, it's probably what we will try.
We had higher demand because workers were able to build lives for themselves.
If you aint willing to tax the rich more at any point well its kinda like you said about environmentalists that hate nuclear power.
.... I'm not certain what period you are referring to specifically, but if you mean during the era of high top marginal rates, demand fluctuated.
Furthermore, workers are still very able to build lives for themselves - better lives, in fact.
As I stated;
We are going to have to raise taxes in ways that hurt (meaning on middle income earners as well as upper income earners, and probably also on lower income earners) and we are going to have to cut spending in ways that hurt (meaning reduction in benefits to people who planned for them), and the longer we wait, the more it's going to hurt.
I just don't buy into the fantasy narratives on the Left, where all this can be solved by just taxing the rich, or the fantasy narratives on the Right, where all this can be solved by just cutting out government Fraud Waste and Abuse. Everyone's sacred cow is in for a goring, and if we have learned anything over the past few years, it is that people will refuse to accept that their fantasy was fake long past the time when it becomes critical for them to do so.
Well it doesn't downplay just reframe correctly. Either way this would just be describing the reality of weak governance instead of a flaw in the economic framework itself. I hope you realize, every framework can be abused. The existence of bad incentives doesn't disqualify a theory. Also MMT is agnostic to political morality, what you're describing just seems to be a governance flaw instead of a theoretical flaw. That first claim is just goes haywire since the current system is already being misused. Trillions to banks, wars, corporate bailouts, all under the guise of "we had to do it." The misuse you're worried about is already here. Plus, once you center real-resource limits you build tools to prevent abuse. MMT doesn't fix politicians being disciplined.But if a framework predictably leads to misuse due to weak political constraints, that’s quite relevant - especially regarding mmt, which downplays budget limits.
I think I'm finally seeing your misunderstandings. MMT has both descriptive and prescriptive aspects. It starts descriptive, it maps how fiat monetary systems already operate: spending precedes taxation, and so on. It's prescriptive side would just build off that.This analogy doesn't work, because newtown's laws are descriptive, while mmt is a prescriptive framework.
Automatic stabilizers: MMT supports strong unemployment programs that scale with downturns, which reduce inflation volatility.How is that suppose to work? In the real world, not fantasy.
As for enforcement, it's the same as today; political process. But with MMT voters and reps would have clearer visibility on actual constraints on things such as inflation, productive capacity, all things forementioned.Like what? How will they be enforced?
What problem are you trying to solve again?
Is it really a problem?
Of course it is.It's real just not in the way you frame it.
Of course it’s debt.MMT treats it as a financial asset to the private sector and a liability to the government, it's not "debt" in the household sense where repayment is constrained by income though.
So then eliminate all taxes and print as much money we need to cover expenditures. SimpleAnd before you say it, yes governments can issue as much as they want nominally but MMT never says they should do it recklessly. Real constraint being inflation of course.
I think you got to the point of just saying "Of course, so then" and then repeating the same thing you have said previously without proving your point.Of course it is.
Of course it’s debt.
So then eliminate all taxes and print as much money we need to cover expenditures. Simple
I’m sorry that you believe in batshit crazy and demonstrably nonsense regarding basic economics and fiscal policy. But as soon as you trot out “sovereign debt isn’t real” you deserve nothing but mockery.I think you got to the point of just saying "Of course, so then" and then repeating the same thing you have said previously without proving your point.
Trust me no one said "sovereign debt isn't real" chief, I said it's not analogous to household debt.I’m sorry that you believe in batshit crazy and demonstrably nonsense regarding basic economics and fiscal policy. But as soon as you trot out “sovereign debt isn’t real” you deserve nothing but mockery.
Johnfromcincinatti did. And you also tried to insinuate it.Trust me no one said "sovereign debt isn't real" chief,
Then you agree we can’t keep adding trillions to the debt, without sever consequences. You agree we need to increase taxes and either freeze or reduce spending at the same time to avoid a fiscal collapse?I said it's not analogous to household debt.
Our spending is unsustainable.
Yes. And no, I have zero interest in the MMT "Inflation Isn't A Thing So We Can Just Hyperinflate Our Way Out Of It" nonsense.
I’m sorry that you believe in batshit crazy and demonstrably nonsense regarding basic economics and fiscal policy. But as soon as you trot out “sovereign debt isn’t real” you deserve nothing but mockery.
Well it doesn't downplay just reframe correctly. Either way this would just be describing the reality of weak governance instead of a flaw in the economic framework itself. I hope you realize, every framework can be abused.
The existence of bad incentives doesn't disqualify a theory.
Also MMT is agnostic to political morality, what you're describing just seems to be a governance flaw instead of a theoretical flaw. That first claim is just goes haywire since the current system is already being misused. Trillions to banks, wars, corporate bailouts, all under the guise of "we had to do it." The misuse you're worried about is already here. Plus, once you center real-resource limits you build tools to prevent abuse.
MMT doesn't fix politicians being disciplined.
As for enforcement, it's the same as today; political process. But with MMT voters and reps would have clearer visibility on actual constraints on things such as inflation, productive capacity, all things forementioned.
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