Month: June 2011
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Yeah: Cutting Rich People’s Taxes Spurs Growth
I know, I know, this falsehood has been skewered every which way from Sunday. But I couldn’t resist sharing one more. Rich People’s Taxes Have Little to Do with Job Creation. Related posts: Most Regressive Taxes? My Home State 🙁 Galbraith Translates “Trickle Down”: Eat Shit Obama and Small Business Cap Gains: Where’s the…
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Modern Monetary Theory and New Monetary Economics
Elevating and rewriting this from what I wrote in the comments. Thanks to bkmacd for prompting it by coming back at me on some issues. Are long-term government bonds a gift to bankers? Paying them interest to hold risk-free assets? His key points, and my replies: Whether or not you personally feel that taking on…
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Bleg: Government “Savings”?
If the Modern Monetary Theory model is correct, does “government savings” (either a stock or a flow) mean anything? Is there any such thing? According to MMT thinking, the government creates money into the private economy by spending (including via interest payments on bonds), and destroys money out of the private economy by taxing. (Bond…
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The Real Return on Treasuries Should be Zero. They’re Risk-Free.
If the modern monetary theory folks are right, there’s no reason the government should be paying interest above inflation on bonds and bills. It’s an artifact of the gold standard, utterly unnecessary (and economically destructive) in a fiat-currency economy. This realization courtesy of a February policy note by Jamie Galbraith that I just came across:…
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Did I Mention Mentioning that It’s the Health Care Costs, Stupid?
Yes. And yes. Krugman agrees: Its the Health Care Costs, Stupid – NYTimes.com. The key graphic: For those who don’t click on links that say “Source,” click here: Medicare Versus Private Insurance: The Data – NYTimes.com Related posts: What’s Wrong with Vouchers? Medicare: Government Does It Right We Should Make Janitors Work Longer Because…
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Government Debt Increases Interest Rates: Yeah, Right
This is one of those graphics that speaks volumes about how right-wing economists are completely divorced from reality. They point to the sun rising in the east and say, “You see? I told you sun rises in the west.” Traders Crucible shows you the pictures: And he runs the numbers: I’m not making any…
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Demand Inflation Now! Up the Real Economy.
I know it’s hokey: “Make a DIN!” (Hat tip: Gerald Ford.) Paul Krugman and others have been raising this issue front and center of late (notably today), which prompts me to post this, which I’ve been poking at for a while. I intended to make it much longer, with many more references, but I’ll give you…
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Economists Aren’t Rational
Well at least that’s true of freshwater economists and their saltwater outliers (no names, just initials: Greg Mankiw). Here’s how those economists think: People are rational economic actors. “Rational” means thinking like an economist. Rational (read: freshwater) economists know that government spending is (deferred) taxation. So when government spends, these rational people think and act…