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Edited by Mrph1 on Nov 30th 2023 at 11:03:59 AM
As illustrated by ~40% of California's population supporting a policy that would benefit only ~1% of the population. Because unless there's new data that suggests otherwise, that voter breakdown seems pretty clear. The larger issue is indeed that at least a third to roughly half of the country is on board with politics that are fundamentally, dogmatically committed to ensuring the livelihood of the 1% in the belief that it will just make everything better, and thus to do otherwise will just make everything worse.
Edited by Eschaton on Feb 13th 2019 at 11:17:46 AM
I'm also gonna point out that the op-ed from Krugman that was brought up earlier in defense of AOC only addresses AOC's idea for the 70% tax rate (which he supports). It doesn't address the stuff in the GND (seeing as how it's from January).
Now, if there were op-eds from Krugman about the feasibility of MMT and / or the stuff in the GND...
Edited by M84 on Feb 14th 2019 at 3:18:15 AM
Disgusted, but not surprisedHe has talked about MMT a bit in the past.
For instance:
Let’s have a more or less concrete example. Suppose that at some future date — a date at which private demand for funds has revived, so that there are lending opportunities — the US government has committed itself to spending equal to 27 percent of GDP, while the tax laws only lead to 17 percent of GDP in revenues. And consider what happens in that case under two scenarios. In the first, investors believe that the government will eventually raise revenue and/or cut spending, and are willing to lend enough to cover the deficit. In the second, for whatever reason, investors refuse to buy US bonds.
The second case poses no problem, say the MM Ters, or at least no worse problem than the first: the US government can simply issue money, crediting it to banks, to pay its bills.
But what happens next?
We’re assuming that there are lending opportunities out there, so the banks won’t leave their newly acquired reserves sitting idle; they’ll convert them into currency, which they lend to individuals. So the government indeed ends up financing itself by printing money, getting the private sector to accept pieces of green paper in return for goods and services. And I think the MM Ters agree that this would lead to inflation; I’m not clear on whether they realize that a deficit financed by money issue is more inflationary than a deficit financed by bond issue.
For it is. And in my hypothetical example, it would be quite likely that the money-financed deficit would lead to hyperinflation.
The point is that there are limits to the amount of real resources that you can extract through seigniorage. When people expect inflation, they become reluctant to hold cash, which drive prices up and means that the government has to print more money to extract a given amount of real resources, which means higher inflation, etc.. Do the math, and it becomes clear that any attempt to extract too much from seigniorage — more than a few percent of GDP, probably — leads to an infinite upward spiral in inflation. In effect, the currency is destroyed. This would not happen, even with the same deficit, if the government can still sell bonds.
Edited by Kamiccolo on Feb 13th 2019 at 11:21:15 AM
Here's a more recent op-ed from Krugman dated 2/12/2019 about heterodoxy.
How Much Does Heterodoxy Help Progressives? (Wonkish)
But you don’t have to be a deficit scold to suggest that progressives should be thinking about how to pay for their policies. So it’s a source of mild concern that I keep hearing that heterodox economics — specifically Modern Monetary Theory — says that we don’t have to worry about where the money will come from, that because we have a printing press deficits don’t matter.
Now, I am not a fan of MMT, which is basically Abba Lerner’s “functional finance,” which while clever missed some possibly important things. I explained all of that in a previous post. But the truth is that none of this matters much for the issue at hand. Even if you’re a committed Lernerite, even if you think that debt never matters, the sheer scale of what progressives would like to accomplish means that there will have to be tax hikes to pay for most of it.
His point is that we really can't ignore the deficit.
Again, I’m not arguing against an ambitious agenda. But heterodox monetary theory won’t let you avoid the reality that this agenda will have to be tax-and-spend, not just spend.
Edited by M84 on Feb 14th 2019 at 3:38:21 AM
Disgusted, but not surprisedKrugman has more recent writing relating to MMT
, and about M4A
. To whit, all these projects should be paid for in some way other than deficit spending, through tax hikes for example. Whether these tax hiles are feasible is a slightly different question however. This earlier op-ed while mostly a rant about debt fear mongers
also raises the point that GND is to a large degree an investment project not just a spending plan. And investment pays for itself (at least to a point) that's why all businesses do it.
Incidentally, M84, I linked that op-ed earlier solely to make a specific statement, not an overarching claim.
Edited by SeptimusHeap on Feb 13th 2019 at 8:41:05 PM
"For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled." - Richard Feynman
TBF Kamiccolo was mainly criticizing AOC's support of MMT and other stuff in the GND. They didn't really talk much about the 70% tax rate thing which is what Krugman supports. So it didn't really make much sense to bring up an op-ed from Krugman about said tax rate.
Krugman overall doesn't seem to be a fan of MMT, which to me seems a lot like more of that "have cake and eat it" mentality which was the main thing that bothers me about the GND in the first place.
One thing that Krugman particularly doesn't like about MMT is the way its supporters act like holier than thou assholes who are quick to call people who criticize MMT as shills for the oligarchy or something.
And yes, I do consider AOC's support of MMT to be a point against her.
Edited by M84 on Feb 14th 2019 at 3:54:59 AM
Disgusted, but not surprisedThe criticism was a bit more expansive than just MMT
, besides as noted in the other OP the GND is an investment project so it would be expected to pay for itself to (at least) some degree. And nobody has broken down the mathematics on that yet.
The main sticking point in that post was the MMT stuff. It's like half of the thing at least. The 70% tax rate thing isn't mentioned at all.
Also, Kamiccolo specifically was talking about MMT when they claimed that no reputable economist supported it.
And Krugman, the guy whose op-ed you linked in an attempt to disprove this even though said op-ed doesn't address it at all, is also not a fan of MMT.
And while the GND does seem to be an investment project, the fact that the person spearheading it is also a believer of MMT is a cause for concern.
Edited by M84 on Feb 15th 2019 at 4:42:59 AM
Disgusted, but not surprisedNo, I was not addressing MMT specifically. Just the exchange between wisewillow and Kamiccolo. Besides, without a number breakdown that considers ROI we can't say whether GND would need deficit spending and thus MMT.
"For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled." - Richard Feynman
If your point was to call in to question Kamiccolo's claim that they substantiate all their claims, it might have been better to provide a link that actually calls into question a specific criticism of AOC that Kamiccolo made. Kamiccolo doesn't seem to have specifically criticized AOC's idea for a 70% tax rate in any recent post.
I for one can't be entirely comfortable with a vague investment plan presented by someone who genuinely thinks deficit spending is not at all a problem. It's kind of the opposite extreme of deficit hawks' paranoid fear of deficit spending — and the solution to one extreme is rarely ever the opposite extreme.
Edited by M84 on Feb 14th 2019 at 5:03:52 PM
Disgusted, but not surprised....
Those are a real thing. ._.;
It gives "natural gas" a whole new meaning.
Now all we need to do is tap into humanity's potential.
Edited by Ramidel on Feb 14th 2019 at 12:16:49 AM
Except society is not a zero sum game. In a prospering society, everybody benefits, but the affluent* benefit the most. That's very much true today compared to the 1950s; things were more equal back then thanks to a massive amount of wealth going up in literal flames due to the revolutions, wars, and pandemics of the early 20th century, but quality of life has improved globally. The alternative is virtually everyone suffering equally under delusional, unworkable Utopian projects to revise the fundamental workings of human society.
Edited by CaptainCapsase on Feb 14th 2019 at 6:42:53 AM
MMT does not say deficit spending is never a problem, it says it is limited by what resources - which, crudely, means labor, can be mobilized, not by money.
As long as you have unemployed, both in the classical "Actively looking for work" sense, and also in the wider, "people who would be happy to work if you sought them out and pushed a job at them", you can deficit spend, and it will just result in the nation being richer, because more people are producing actual wealth, and the fact you are paying them with money you conjured out of thin air does not matter, because they are producing actual value, which means the nominal value of the new dollars are matched by new actual products and services.
Further, it has a simple, obvious way to tell if you are overdoing it. "Is inflation going up yet"?
As long as the answer to that is no, you can, and should, just spend more money or collect fewer taxes.
Also, you should not borrow it, you should print it.
Edited by Izeinsummer on Feb 14th 2019 at 3:45:48 AM

AOC may end up being the best gift that the right could hope for.
Edited by Kamiccolo on Feb 13th 2019 at 11:22:52 AM