------------------..
what i DO agree with is this
we will need a mechanism to control price level movements
if we want to use macro policy to reach
hyper employment without a price blow out
and of course restore balanced trade
that hole creates a structural demand for big fiscal deficits
------------------------------
we will need a mechanism to control price level movements
if we want to use macro policy to reach
hyper employment without a price blow out
and of course restore balanced trade
that hole creates a structural demand for big fiscal deficits
------------------------------
"We want to control price level movements because they create inefficiencies"
yes
that is the usual point
but robust inflation might well improve
the dynamic efficiency of a market system no ??
to talk of control here may not mean reduce
but more centrally
a desire to manage inflation
i use the analogy to fire
now inflation in its wage push form
is like a wild fire
we try to put it out before it gets rolling
i think we oughta design and implement a social mechanism to control inflation
master it make it our tool
hence my endless and apparently solitary
flogging of a mark up or value added
cap and trade system
at least for our big outfits with obvious
bruce wilderesque "market power"
or for a rampant price rising sector
like health care
or duldrumous price contracting sector
like commodity production
---we kinda have these already but no where near as stream lined and self emerging as a mark up market could produce
produced by many small powerless producers
yes
that is the usual point
but robust inflation might well improve
the dynamic efficiency of a market system no ??
to talk of control here may not mean reduce
but more centrally
a desire to manage inflation
i use the analogy to fire
now inflation in its wage push form
is like a wild fire
we try to put it out before it gets rolling
i think we oughta design and implement a social mechanism to control inflation
master it make it our tool
hence my endless and apparently solitary
flogging of a mark up or value added
cap and trade system
at least for our big outfits with obvious
bruce wilderesque "market power"
or for a rampant price rising sector
like health care
or duldrumous price contracting sector
like commodity production
---we kinda have these already but no where near as stream lined and self emerging as a mark up market could produce
produced by many small powerless producers
----------------------------------------.
" tie price levels to unemployment through a job guarantee at a fixed price
No more inflation, no more unemployment."
creating uncle's job gulag
is widely supported on the left
and it ought to be squashed
in my considered opinion
---we oughta get into that here somewhere btw---
but the job gulag
only puts a floor on market wages right ??
how does it put a ceiling on em ??
by opening the gulags gates ??
they're always open eh ??
by intentionally letting the gulag "real wage " shrink to dastardly non livable levels
mark my words
the dynamics of any job gulag would parallel the welfare system circa 65-95
ie slow misery inducing strangulation by agent demagogues
of the corporate plutocrats
---------------------------
"I do think that there are real differences between Krugman's views and MMT.."
all the differences are worth excavating eh ??
but i think the nub is pk's tax talk
i submit pk 's line partly alibis
the austerians when he suggests
"we need new taxes "
his implication:
there is such a thing
as a finite fiscal borrowing space
but he has never suggested a rule for it
he prolly has in his head something like
a federal debt outstanding
( ie not in some pair of gubmint hands
or the fed's )
at 200% of gdp
once he pins that down
then extended high deficit regimes
like the present one
become problematic immediately
since the very form of the argument
allows say
a simple johnson or ken roguenutz
to set the bar at 100% of gdp
and cry wolf ......right now !!!
the trap he falls into by this debt burden ceiling
is of course he ends up calling for
a higher total tax yield
this gets opposed by the hoi polloi
now in year 30
of the take home median wage's rollicking ... snail rate of growth
whereas those un afraid of any debt limit
can suggest the system needs only to shift
a large measure of the existing
"full employment " extraction rate
( ~20% of gdp)
off theshoulders of the payroll class
and onto those of our upper wealth and passive income bracketeers
both new brackets and deeper cutting brackets
-------------------------
No more inflation, no more unemployment."
creating uncle's job gulag
is widely supported on the left
and it ought to be squashed
in my considered opinion
---we oughta get into that here somewhere btw---
but the job gulag
only puts a floor on market wages right ??
how does it put a ceiling on em ??
by opening the gulags gates ??
they're always open eh ??
by intentionally letting the gulag "real wage " shrink to dastardly non livable levels
mark my words
the dynamics of any job gulag would parallel the welfare system circa 65-95
ie slow misery inducing strangulation by agent demagogues
of the corporate plutocrats
---------------------------
running deficits for ever
is not the issue here is it ??
the issue is unhinging the bond markets
by expectations of such things as weimar
hyper inflation
and/or devaluation with its import price tsunami
lerner marshall day II
i note hyper inflations are the result of a tax system brake down combined with a BOP crisis
ie
its an open system problem
above pk
never addresses this "reality"
-------------------------------is not the issue here is it ??
the issue is unhinging the bond markets
by expectations of such things as weimar
hyper inflation
and/or devaluation with its import price tsunami
lerner marshall day II
i note hyper inflations are the result of a tax system brake down combined with a BOP crisis
ie
its an open system problem
above pk
never addresses this "reality"
"unemployment is the most egregious inefficiency."
amen
"Look at any chart of wealth distribution and you can easily see which class figured it out first"
not so sure
after all the gold system at full flood around the victorian era
certainly skewed wealth much as reagan dynamics skewed wealth
but i agree you can't run a real deindustrialization like we've seen here post nixon wimdow slam
quite so well
with a gold dollar link
like keynes-white designed at bretton woods
chronic trade deficits work better backed by a limitless unchecked dollar mine
-------------------amen
"Look at any chart of wealth distribution and you can easily see which class figured it out first"
not so sure
after all the gold system at full flood around the victorian era
certainly skewed wealth much as reagan dynamics skewed wealth
but i agree you can't run a real deindustrialization like we've seen here post nixon wimdow slam
quite so well
with a gold dollar link
like keynes-white designed at bretton woods
chronic trade deficits work better backed by a limitless unchecked dollar mine
min
you give the vulgar street talk version of mmt
too much credit
pk albeit sloppy about the execution
is correct to throw up this caution sign
i think he was stung by dean baker
http://www.cepr.net/index.php/blogs/beat-the-press/krugman-is-wrong-the-united-states-could-not-end-up-like-greece?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+beat_the_press+%28Beat+the+Press%29
and side steps dean to wack a mole of another ilk
a particularly dumb mole that thinks
final answers grow on money trees
money trees that are endlessly and costlessly
currency baring
you give the vulgar street talk version of mmt
too much credit
pk albeit sloppy about the execution
is correct to throw up this caution sign
i think he was stung by dean baker
http://www.cepr.net/index.php/blogs/beat-the-press/krugman-is-wrong-the-united-states-could-not-end-up-like-greece?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+beat_the_press+%28Beat+the+Press%29
and side steps dean to wack a mole of another ilk
a particularly dumb mole that thinks
final answers grow on money trees
money trees that are endlessly and costlessly
currency baring
-----------------------------------
i'm wrong
timing of posts suggests pk
had this wiggle walker out
b4 dean swept in on the earlier
column hyperbolics
timing of posts suggests pk
had this wiggle walker out
b4 dean swept in on the earlier
column hyperbolics
it however suggests something is eating at pk
he rarely shores up a position
no one has fired at
but maybe he was here merely guiding
the flock of independent thinking innocents
away from that particular cliff edge
-------------------------------
he rarely shores up a position
no one has fired at
but maybe he was here merely guiding
the flock of independent thinking innocents
away from that particular cliff edge
-------------------------------
all the differences are worth excavating eh ??
but i think the nub is pk's tax talk
i submit pk 's line partly alibis
the austerians when he suggests
"we need new taxes "
his implication:
there is such a thing
as a finite fiscal borrowing space
but he has never suggested a rule for it
he prolly has in his head something like
a federal debt outstanding
( ie not in some pair of gubmint hands
or the fed's )
at 200% of gdp
once he pins that down
then extended high deficit regimes
like the present one
become problematic immediately
since the very form of the argument
allows say
a simple johnson or ken roguenutz
to set the bar at 100% of gdp
and cry wolf ......right now !!!
the trap he falls into by this debt burden ceiling
is of course he ends up calling for
a higher total tax yield
this gets opposed by the hoi polloi
now in year 30
of the take home median wage's rollicking ... snail rate of growth
whereas those un afraid of any debt limit
can suggest the system needs only to shift
a large measure of the existing
"full employment " extraction rate
( ~20% of gdp)
off theshoulders of the payroll class
and onto those of our upper wealth and passive income bracketeers
both new brackets and deeper cutting brackets
-------------------------
"they point out that historical cases of hyperinflation have always had some economic dislocation ...."
exactly so
pk needs to build a possible scenario
he hasn't done that
exactly so
pk needs to build a possible scenario
he hasn't done that
its a piece of fast talk bs
--hey i agree with pk there's a price level "issue" here
that is trumped by a liquidity trap
remove the liquidity trap
and like opening pandora's box ...
at any rate here it is...
set up phase :
"suppose that we eventually go back to a situation in which interest rates are positive, so that monetary base and T-bills are once again imperfect substitutes;"
under specified what else is up here pk ??
what has pulled interest rates up into the positive regions ??
return of corporate spending
for what new us production capacity ??
how about
haywire increases in lending to households ??
for what house lot bubble ups ??
are we facing up to our trade deficit ???
or has it bulged out grotesquely
"also, we’re close enough to full employment that rapid economic expansion will once again lead to inflation."
ya just toss that in
but what are the mechanics of this bubala ??
are you really relying on this hand wave here ??
---------
attempt to use "numbers" to add precision
"The last time we were in that situation, the monetary base was around $800 billion."
------------------
now comes the clinker
despite full employment and real rates of interest
"Suppose.. we ... find ourselves back in that situation .." ie real rates nairu employment levels
wait for it
"with the government still running deficits of more than $1 trillion a year, say around $100 billion a month. "
make me see this in complete numbers paul
we've doubled back here
why are we running these big deficits
particularly if we've restored NAIRU levels
of employment ???
again trade gap ???
why is that not being addressed directly ???
yes you gotta close the trade gap for sure
then the magic moment
".. for whatever reason, we’re suddenly faced with a strike of bond buyers — nobody is willing to buy U.S. debt except at exorbitant rates."
what has created this moment ???
you gotta make it possible if not plausible
give us a scenario
"...for whatever reason..."
don't cut it here
if its a sky hook
if ou can't anchor this flight/panic
on a context that coheres ...
this really really needs
a historical analogy
-------------------------------
okay so far so stinky but
at any rate i swallow that for sake of argument
So then what?
"The Fed could directly finance the government by buying debt, or it could launder the process by having banks buy debt and then sell that debt via open-market operations; either way, the government would in effect be financing itself through creation of base money."
ya ya ya
so the trick is set
and sprong
our leg is caught in the teeth of it
" the first month’s financing would increase the monetary base by around 12 percent. And in my hypothesized normal environment, you’d expect the overall price level to rise (with some lag, but that’s not crucial) roughly in proportion to the increase in monetary base. And rising prices would, to a first approximation, raise the deficit in proportion."
but putting aside the melodramatics
what does this seem to suggest
dynamically that we could model ??
its comp stat talk
almost quantity theory of money
talk
and despite that
pk's pretending to play dynamics here
yet another big hand wave
the rest is artificial catastrophe
"So we’re talking about a monetary base that rises 12 percent a month, or about 400 percent a year."
oddly not satisfied with that
pk adds gas to the flames
"Does this mean 400 percent inflation? No, it means more — because people would find ways to avoid holding green pieces of paper, raising prices still further. "
the point:
show me
why macro policy is "...still running deficits of more than $1 trillion a year" ???