Ho hum
“Unbeknownst to most Americans the United States is presently under thirty presidential declared states of emergency. They confer vast powers on the Executive Branch including the ability to financially incapacitate any person or organization in the United States, seize control of the nation’s communications infrastructure, mobilize military forces, expand the permissible size of the military without congressional authorization, and extend tours of duty without consent from service personnel. Declared states of emergency may also activate Presidential Emergency Action Documents and other continuity-of-government procedures which confer powers on the President, such as the unilateral suspension of habeas corpus—that appear fundamentally opposed to the American constitutional order. Although the National Emergencies Act, by its plain language, requires the Congress to vote every six months on whether a declared national emergency should continue, Congress has done only once in the nearly forty year history of the Act.”
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Saturday, 19 September 2015
Sunday, 13 September 2015
Why you can't hand out land value tax as citizens income
You can of course - the title is clickbait :b
However it would be probably be better if the citizens income is slightly less than the land value tax. Stick with me.
The reason is the same as why you don't "tax the rich" and hand it out as citizens income.
Yes this "boosts" the "productive economy." But there are limits - real resources limits.
You can't "print prosperity" unless you are wasting resources ;)
Rentiers tend to be very rich (yes, I know there are Poor Widows in Mansions) and save a lot. Taxing these savings is not an inflation control. It does not control the flow of real goods and services, which is induced by money changing hands.
Yes a lot of money is earned unproductively through rent-seeking. But not a lot of stuff is consumed and its the stuff that matters.
It's a bit like the "tax the rich" idea to "fund the NHS." Doctors have to be trained, or stolen from abroad.
Inflation is a function of the flow of money and not the stock.
So Mark's proposal is really equivalent to "handing out" LVT as Citizen's Income, plus a citizen's income "printed."
Yes, a few resources are wasted (e.g. FIRE industry.) But that is not enough.
What I am ready looking for is a dynamic model like this instead of a static model like the VAT models Mark uses. This is my challenge to the Georgists :)
However it would be probably be better if the citizens income is slightly less than the land value tax. Stick with me.
The reason is the same as why you don't "tax the rich" and hand it out as citizens income.
Yes this "boosts" the "productive economy." But there are limits - real resources limits.
You can't "print prosperity" unless you are wasting resources ;)
Rentiers tend to be very rich (yes, I know there are Poor Widows in Mansions) and save a lot. Taxing these savings is not an inflation control. It does not control the flow of real goods and services, which is induced by money changing hands.
Yes a lot of money is earned unproductively through rent-seeking. But not a lot of stuff is consumed and its the stuff that matters.
It's a bit like the "tax the rich" idea to "fund the NHS." Doctors have to be trained, or stolen from abroad.
Inflation is a function of the flow of money and not the stock.
So Mark's proposal is really equivalent to "handing out" LVT as Citizen's Income, plus a citizen's income "printed."
Yes, a few resources are wasted (e.g. FIRE industry.) But that is not enough.
What I am ready looking for is a dynamic model like this instead of a static model like the VAT models Mark uses. This is my challenge to the Georgists :)
Saturday, 12 September 2015
The way to beat MMT and enforce fiscal discipline
There is a very simple way to beat MMT, when you think about it. It is a very simple flaw.
It is the "savings are Voluntary Tax" bit.
And the flaw is thus...
The government cuts taxes for the rich. Yeah, so what? You say.
The rich save the money.
The govt then makes an explicit quid pro quo that if taxes are to be cut, rich people must spend (some of the) money on a variety of things including the things poor people buy. The poor people are then crowded out.
You can make this a condition of a Labour government being elected (or austerity ended.) Or just do it all the time.
The money saved from the tax cuts can be shuffled to various tax havens.
Rich people are too worried about saving money and don't realise the power they actually have - spending the money.
EDIT: What is this post about? Am I trying to be evil? No. This is about rent seeking. You have to end rent seeking. Rent seeking is not a problem because they save the money, right? Well yeah but what if they don't. Most of the time you save but you spend when there is any action to stop rent-seeking.
It is the "savings are Voluntary Tax" bit.
And the flaw is thus...
The government cuts taxes for the rich. Yeah, so what? You say.
The rich save the money.
The govt then makes an explicit quid pro quo that if taxes are to be cut, rich people must spend (some of the) money on a variety of things including the things poor people buy. The poor people are then crowded out.
You can make this a condition of a Labour government being elected (or austerity ended.) Or just do it all the time.
The money saved from the tax cuts can be shuffled to various tax havens.
Rich people are too worried about saving money and don't realise the power they actually have - spending the money.
EDIT: What is this post about? Am I trying to be evil? No. This is about rent seeking. You have to end rent seeking. Rent seeking is not a problem because they save the money, right? Well yeah but what if they don't. Most of the time you save but you spend when there is any action to stop rent-seeking.
Saturday, 22 August 2015
Krugman the Homeownerist?
http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html
2002- Krugman calls for a housing bubble. Busted!
See also:
http://moslereconomics.com/2015/08/22/krugman-on-debt/
Mosler's (MMT) response to Krugman's mumbling speculative nonsense on debt.
Debt is good? Comments say that debt is obviously bad. Well folks its not good or bad it is what it is.
2002- Krugman calls for a housing bubble. Busted!
See also:
http://moslereconomics.com/2015/08/22/krugman-on-debt/
Mosler's (MMT) response to Krugman's mumbling speculative nonsense on debt.
Debt is good? Comments say that debt is obviously bad. Well folks its not good or bad it is what it is.
Tuesday, 18 August 2015
Collection of MMT Links
This is a collection of links on Modern Monetary Theory. MMT is a heterodox (alternative) theory of economics.
Basics of MMT
Primers:
Full/Detailed MMT primer (comments closed)
MMT graphically - Part 1 and Part 2
Then read - More Basics:
The fixed exchange rate at the heart of MMT
MMT vs Mainstream comparison
What do MMTers mean by saving- the National Accounts
Introduction to Sectoral Balances Model
Money multiplier is wrong
See also (same point):
Bank of England explains why money multiplier found in "some economic textbooks" is wrong
Canada and bank reserves
What if public debt reaches gazillion %
More MMT basics
Sectoral balances causalities and interest rates
Investment and Saving
MMT - Inflation and debt burdens
MMT explains:
MMT and inflation - Part 1 and Part 2
Cigarettes used in prisons as currency
QE
Positive Money Debunked
Bitcoin
US Treasuries
Zimbabwe hyperinflation
Russian Rouble (2014) and solutions
Persistent trade deficit MMT explanation
MMT books/e-books:
7 Deadly Innocent Frauds (Free download)
Understanding Government Finance
Full Employment Abandoned
MMT papers:
Non exhaustive list of MMT papers
Centre of Full Employment and Equity
MMT websites:
3spoken blog (Neil Wilson)
Billy Blog (Prof Bill Mitchell)
Bond Economics
Peter Cooper
Mike Norman
Basics of MMT
Primers:
Full/Detailed MMT primer (comments closed)
MMT graphically - Part 1 and Part 2
Then read - More Basics:
The fixed exchange rate at the heart of MMT
MMT vs Mainstream comparison
What do MMTers mean by saving- the National Accounts
Introduction to Sectoral Balances Model
Money multiplier is wrong
See also (same point):
Bank of England explains why money multiplier found in "some economic textbooks" is wrong
Canada and bank reserves
What if public debt reaches gazillion %
More MMT basics
Sectoral balances causalities and interest rates
Investment and Saving
MMT - Inflation and debt burdens
MMT explains:
MMT and inflation - Part 1 and Part 2
Cigarettes used in prisons as currency
QE
Positive Money Debunked
Bitcoin
US Treasuries
Zimbabwe hyperinflation
Russian Rouble (2014) and solutions
Persistent trade deficit MMT explanation
MMT books/e-books:
7 Deadly Innocent Frauds (Free download)
Understanding Government Finance
Full Employment Abandoned
MMT papers:
Non exhaustive list of MMT papers
Centre of Full Employment and Equity
MMT websites:
3spoken blog (Neil Wilson)
Billy Blog (Prof Bill Mitchell)
Bond Economics
Peter Cooper
Mike Norman
Sunday, 16 August 2015
Generic labour market reform
These proposals are for the Spanish Labour Market that is pretty screwed up, but on second thought can work as a generic package.
First off there needs to be a radical supply side reform, abolishing all or most labour market regulations and banning trade unions. Some may say this is "illiberal." Well there are laws against "cartels", businessmen colluding for theirown benefit. Trade unions are basically workers colluding for their own benefit. The proper name is labour cartels. So if you support trade unions logically you should support cartels. Finally welfare (payments to fit, able-bodied people who can work but don't) should be abolished, except for the disabled and sick and elderly and perhaps an unemployment benefit for between-jobs unemployment that can be claimed for say 3 months.
Immigration needs to restricted (see must read article here) via a points based system so businesses invest in the native population.
I feel that the left wing really hate this part of the reform.
But hold up lefties because before you've called me an ultra-right wing, evil scum of the earth you've missed out the second part of the reform.
The second part is that we need serious competition in the labour market and the government should introduce a - Job Guarantee
This is an open job *offer* at £x/hour (start at the living wage) available to all provided by the government. It offers an employed buffer stock instead of the current unemployed buffer stock, which is superior to it for several reasons, but mainly because it reduces hiring costs and the "long term" unemployed issue. The government operates a buffer stock of jobs to absorb workers who can't find employment in the private sector. The pool expands (declines) when the private sector expands (declines.)
What sort of jobs will the JG create?
The jobs will be nonessential but useful, and that will serve public purpose for example a Teacher's aide. You will have JG open source software projects. But the *output* is less essential than the reduction in hiring costs. It also helps reduce black market activity, especially prevelant in places like Spain. You allow open borders to nations also with a Job Guarantee and similar social infrastructure (universal education and healthcare.) So you would exclude third world countries like the USA. This is a sanction that says "improve your social infrastructure and join us" and a pragmatic way to open borders.
A derivative trader will not be trading derivatives on the Job Guarantee because those skills are obsolete and serve no public purpose. A lawyer that ends up on the Job Guarantee for whatever reason will find work using their legal skills at, say, the Citizen's advice bureau - because that has a public purpose.
The Job Guarantee will use people's *transferable* skill set and help them transition to a different role. That's one of the reasons Warren Mosler calls the Job Guarantee a 'transition job'.
The Job Guarantee wage is set as it is because that is what the people coming to it are worth. There is no better bid in the market, otherwise they would not be applying to the Job Guarantee."
First off there needs to be a radical supply side reform, abolishing all or most labour market regulations and banning trade unions. Some may say this is "illiberal." Well there are laws against "cartels", businessmen colluding for theirown benefit. Trade unions are basically workers colluding for their own benefit. The proper name is labour cartels. So if you support trade unions logically you should support cartels. Finally welfare (payments to fit, able-bodied people who can work but don't) should be abolished, except for the disabled and sick and elderly and perhaps an unemployment benefit for between-jobs unemployment that can be claimed for say 3 months.
Immigration needs to restricted (see must read article here) via a points based system so businesses invest in the native population.
I feel that the left wing really hate this part of the reform.
But hold up lefties because before you've called me an ultra-right wing, evil scum of the earth you've missed out the second part of the reform.
The second part is that we need serious competition in the labour market and the government should introduce a - Job Guarantee
This is an open job *offer* at £x/hour (start at the living wage) available to all provided by the government. It offers an employed buffer stock instead of the current unemployed buffer stock, which is superior to it for several reasons, but mainly because it reduces hiring costs and the "long term" unemployed issue. The government operates a buffer stock of jobs to absorb workers who can't find employment in the private sector. The pool expands (declines) when the private sector expands (declines.)
What sort of jobs will the JG create?
The jobs will be nonessential but useful, and that will serve public purpose for example a Teacher's aide. You will have JG open source software projects. But the *output* is less essential than the reduction in hiring costs. It also helps reduce black market activity, especially prevelant in places like Spain. You allow open borders to nations also with a Job Guarantee and similar social infrastructure (universal education and healthcare.) So you would exclude third world countries like the USA. This is a sanction that says "improve your social infrastructure and join us" and a pragmatic way to open borders.
The Government operates a buffer stock of jobs to absorb workers who are unable to find employment in the private sector. The pool expands (declines) when private sector activity declines (expands). The JG fulfills this absorption function to minimise the costs associated with the flux of the economy. So the government continuously absorbs into employment, workers displaced from the private sector.
As Neil Wilson (3Spoken) says:
"the majority of people on the JG will be unskilled and from the secondary job market. And anybody else, almost by definition, likely has an obsolete skill set. A derivative trader will not be trading derivatives on the Job Guarantee because those skills are obsolete and serve no public purpose. A lawyer that ends up on the Job Guarantee for whatever reason will find work using their legal skills at, say, the Citizen's advice bureau - because that has a public purpose.
The Job Guarantee will use people's *transferable* skill set and help them transition to a different role. That's one of the reasons Warren Mosler calls the Job Guarantee a 'transition job'.
The Job Guarantee wage is set as it is because that is what the people coming to it are worth. There is no better bid in the market, otherwise they would not be applying to the Job Guarantee."
Sunday, 12 July 2015
Confusion - Govt debits reserve accounts of banks when it taxes
Anyone can create IOUs in govt currency. I can create a Random IOU for £2, but the govt don't accept it as tax payment!
This is the difference between 'inside' and 'outside' money. The government is the only entity that can issue inside money e.g. US federal government issues dollars, Treasury pounds in UK (BoE is a subsidiary as seen in the consolidated accounts released by the government - see HERE.)
An excellent comment at Mosler Economics:
"When a bank creates a deposit balance for someone, they have thereby created a liability for themselves. And that liability is a liability for the state’s money. If you pay your taxes by drawing on that deposit balance, then the clearing of the payment results in a transfer from the bank’s reserve account to a treasury account. The government doesn’t simply accept the bank liability itself as payment, but requires payment in the form of the government’s own liability – that which the bank liability is a liabilityfor."
This is the difference between 'inside' and 'outside' money. The government is the only entity that can issue inside money e.g. US federal government issues dollars, Treasury pounds in UK (BoE is a subsidiary as seen in the consolidated accounts released by the government - see HERE.)
An excellent comment at Mosler Economics:
"When a bank creates a deposit balance for someone, they have thereby created a liability for themselves. And that liability is a liability for the state’s money. If you pay your taxes by drawing on that deposit balance, then the clearing of the payment results in a transfer from the bank’s reserve account to a treasury account. The government doesn’t simply accept the bank liability itself as payment, but requires payment in the form of the government’s own liability – that which the bank liability is a liabilityfor."
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