Look, up in the sky! It’s a “fiscal cliff.” It’s a slope. It’s an obstacle course.
The truth is, it doesn’t really matter what we call it. It only matters what it is: a lamebrained package of economic depressants bearing down on a lame-duck Congress.
Posted in Stephanie Kelton
Tagged deficit, fiscal cliff, MMT, Modern Monetary Theory, Taxes
By Michael Hoexter
The hour is late and politicians on both sides of the Atlantic are attempting to shrink the social welfare state in the name of a lack of funds. Barack Obama has made it now abundantly clear that he is no friend to Medicare, Medicaid and Social Security, after years of signaling overtly and covertly that cutting social programs was his intention. Obama is as beholden as any right-wing politician, a group among which some might count him, to the notion that the government is running out of money, as if our money was still backed by a limited supply of gold bullion. According to Obama and his fiscal advisors, the government’s supposedly limited funds must be conserved by cutting the activities of government while also raising taxes to, in the “hard-money” telling of the story, “increase revenue” from the private sector for the remaining government programs. The former activity of cutting social welfare spending seems in Washington DC to take political precedence over the latter, in part because the wealthy in the private sector are a powerful lobby for their monetary holdings and income. Meanwhile the poor and middle class have not been, over the past 40 years, a powerful lobby for the social safety net which puts a “floor” under their standards of living. Continue reading
In November 2011, President Correa appointed Pedro Delgado as head of Ecuador’s Central Bank. The appointment was controversial. The obvious controversy was that Delgado is Correa’s cousin. Conservatives claimed that Delgado lacked integrity. Some progressives shared the concerns about his integrity and saw Delgado as too supportive of Ecuador’s largest banks and bankers. The recent banking crisis, in which the owners and managers of Ecuador’s four largest banks began a bizarre campaign of threatening to induce a run on their institutions to extort Correa into withdrawing his very sensible program of increasing the banks’ taxes and reforming the bankers’ dangerously perverse executive compensation, provided a test of these concerns by Correa’s supporters about Delgado. I explained how irresponsible the banking oligarchs’ campaign was in interviews in Ecuador and the U.S. and an article. I explained the vigorous manner in which U.S. regulators of my era would have acted to end the oligarchs’ efforts to extort the government and people of Ecuador by threatening to cause a banking run. Continue reading
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