This is how the mission of the President’s National Commission on Fiscal Responsibility and Reform was defined by the White House
on February 18, 2010:
The Commission is charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. This result is projected to stabilize the debt-to-GDP ratio at an acceptable level once the economy recovers. The magnitude and timing of the policy measures necessary to achieve this goal are subject to considerable uncertainty and will depend on the evolution of the economy. In addition, the Commission shall propose recommendations that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government.
By J.D. Alt
Here is what the HUD.GOV website says about the status of low-income housing in America: “Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. An estimated 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing. A family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.”
By J.D. ALT
Even if we assume the principles of modern fiat money will be generally accepted at some point in the future, we must yet confront the problem that sovereign spending is a difficult issue for market economies. It could easily unfold that even with the new “modern” money perspective in place, a serious recession could still find federal stimulus spending unnecessarily constrained. This difficulty was on full display in the last recession when Obama’s stimulus package was finally passed by Congress—appropriating $800 billion for the federal government to spend—only to then confront the almost burlesque-show entertainment of watching Congress and the Obama administration trying to figure out how to actually do the spending.
By L. Randall Wray
My previous blog sparked a lot of discussion, especially over at Naked Capitalism. I do pity Yves Smith! There’s enough nonsense in the commentary to populate a large nation.
As I have argued, it is very hard to figure out what the debt-free money folks want as they are confused on the accounting, vague on the terminology, and rarely provide details on their proposal. However, a reader has directed me to a fine published article that has mostly got the accounting right, lays out a detailed proposal, and contrasts the proposal against alternatives.
By L. Randall Wray
Some time ago, I labeled the “debt-free money” campaign a non sequitur in search of a policy. (See here.) However, this non sequitur refuses to die. I went on to joke that if they want a debt-free money, they ought to propose that government issue bananas as currency.
I frequently am asked to do interviews and I almost always accept them. However, when I was asked last week to participate in a radio show devoted to debt-free money, I struggled mightily to get out of it. As you’ll see, the program’s producer took my idea of banana republics and ran with it. I thought readers might get a kick out of this exchange (the producer’s emails are in italics, my responses are in bold). After the exchange, I’ll summarize my objections to the notion of debt-free money.
Below is an excerpt from my most recent e-book: Real Fiscal Responsibility, Vol. I: The Progressive Give-up Formula. The book is volume I of II critiquing austerity politics at the Federal level in the United States. It exposes its fallacies, its closed-mindedness and futility, and especially its reliance on wrong-headed conceptions of fiscal sustainability and fiscal responsibility. Continue reading
L. Randall Wray
Yesterday Senator Bernie Sanders gave an important speech in which he invoked President Roosevelt’s “second bill of rights” in defense of his platform. As Bernie rightly pointed out, all of Roosevelt’s New Deal social programs to which we have become accustomed, were tagged as “socialism”—just as pundits are branding Bernie’s proposals as dangerous socialist ideas. You can see Bernie’s prepared remarks here.
Just before Bernie’s speech, I was asked to do an interview with Alex Jensen, on TBS eFM’s “This Morning” English radio program in Seoul, Korea. I was sent a list of questions and jotted down very brief responses. Unfortunately, in our radio interview we were only able to get through a few of these. You can listen to the interview (uses iTunes) here. My interview is #8, Name: 1119 Issue Today with Professor L.R. Wray
The intensity of the conflict over the Trans-Pacific Partnership (TPP) has died down since last June, after the Administration won its victory in getting Trade Promotion Authority (TPA) through Congress. During the Intervening months, the efforts of the Special Trade Representative (STR) to complete TPP negotiations have continued. At the end of June, the goal was to complete negotiations by August so that the Administration could send the Agreement to Congress in enough time to start the clock on the 90-day countdown period Congress has to vote on an agreement negotiated under the TPA, and to schedule a ratification vote on it before the end of 2015.
Posted in Joe Firestone
Tagged A Holistic Approach to Trade and Fiscal Policy, Balanced Budget Fiscal Policy, balanced trade, Budgeting for Public Purpose Fiscal Policy, Deficit Neutrality in the Long Run Fiscal Policy, fair trade, free trade, Impact Assessment for Trade Policy, MMT, modern money theory, public purpose, TISA, TPP, Trade for Public Purpose, TTIP
Our friends over at RETE in Italy have done it again! They have translated and posted Scott Fullwiler’s works on central banking operations into Italian. For our Italian speaking friends, you can now check out Scott’s translated posts here.
By J.D. ALT
I’ve been continuing to work on the book I first proposed here at NEP last spring—The Millennials’ Money—and am getting close now to having it ready for publication. The aspect of it that was least successful (and there were several NEP comments to that effect) was the framing of the “ideology of money scarcity” as having evolved from the particularities of the baby-boomer’s generational experience. That was always a shaky and not-very-insightful argument—and I recently came to realize it had to be replaced with a “framing” that focused the “target” of the book in a more useful way. This “target” became clear to me while reading a series of collected essays by Wendell Berry (The Art of the Commonplace) in which he very forcefully explains how and why local, self-sufficient economies are being exploited and destroyed by the multi-national corporate economy—and why it is essential for those local economies to somehow be re-established and regain some useful portion of their self-sufficiency. I realized this was, in fact, precisely what my book was suggesting ought to be the ultimate purpose of the “millennials’ money”—and that modern fiat currency, itself, makes achieving that goal uniquely possible. What follows here is part of my revised introduction, which is titled: “The Ideology of Money Scarcity—A Brief History”.