Category Archives: Dan Kervick

Dan Kervick Talks with Arnie Arnesen about Austerity, Jobs and Public Enterprise

Posted on February 7, 2013 by | 5 comments

By Dan Kervick

I appeared today on The Attitude with Arnie Arnesen.  The main topic of discussion was my recent NEP post “The Dangerous Collapse of Public Enterprise.”  We talked about the loss of jobs in the government sector, the role of government enterprise and employment in our economy, the ongoing Washington obsession with austerity, and the strategy of disaster capitalism.  My segment comes at about halfway through the first hour, following the Bachman Turner Overdrive “Taking Care of Business” introduction .  Have a listen!

The Attitude

The Attitude is broadcast from WHNH 94.7 in Concord, New Hampshire

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The Dangerous Collapse of Public Enterprise

Posted on February 4, 2013 by | 45 comments

By Dan Kervick

When economists talk about the role of government in economic recovery, they often focus on the question of whether or not we need more economic stimulus.  They ask whether the government should temporarily change its fiscal policies – its taxing and spending decisions – to add some additional publicly financed spending to the economy and help jolt the private sector back to life.  Continue reading →

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Only Public Enterprise Can Heal Our Sick Economy

Posted on January 30, 2013 by | 51 comments

By Dan Kervick

For most Americans, the news that the US economy contracted by 0.1% in the fourth quarter of 2012, the first quarter of negative growth since the pit of the Great Recession 2009, has undoubtedly come as a disappointing shock.  For readers of this blog and the other MMT blogs, however, the emotion felt is probably closer to bitter frustration, since we have all been warning for a very long time about the danger of the utterly misguided austerity drive that has wrecked the European economy, and was officially imported last year to the United States.

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From Central Bank Independence to Democratic Public Finance

Posted on January 25, 2013 by | 121 comments

By Dan Kervick

Effective governance in any country requires a well-designed system of public finance through which that government can achieve its various purposes and pursue the public interest.  If the system of public finance is poorly structured, the public interest will be poorly served.   So, badly designed systems of public finance must be altered or abolished. [1]

We have reached that point in the United States.  The present system of public finance in the US is inefficient and antiquated: its fusty architecture hampers the capacity of the national government to respond to economic fluctuations and crises in a timely and effective manner; its byzantine operational complexity thwarts democratic governance and generates pervasive public confusion about the full range of public policy options; and its over-reliance on government bonds means that wasteful and unearned profits flow to some of the most affluent members of US society, as they are paid service fees for intermediating what ought to be routine operations of the government.

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The Coin Abides

Posted on January 13, 2013 by | 46 comments

By Dan Kervick

Matt Yglesias has posted a sharp post-mortem on the platinum coin debate.  This weekend, the White House imperiously declared that debate over.  And perhaps it is – for now.  But Yglesias remarks on the salubrious effects of the debate:

All that said, I’m glad we had this conversation. Direct discussion of the platinum coin was a good reminder that many people, including influential media figures, appear to have no idea what money is or how the monetary system works. Apart from the shockingly widespread view that the value of coins is determined by their metallic content, there was a lot of insistence that creating money was somehow an act of “magic.” In fact, the way all legal currency is created is that a government agency creates the money.

I would go a bit further.  The coin debate triggered something.  The platinum coin is a big shiny, reminder that in some way, somehow, the monetary authority of the United States rests with the American people, even if the plutocratic architects of our financial system and the owners of our country have succeeded over time in burying that authority under many layers of convoluted technocracy and confusing delegations.

Continue reading →

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The Quadrillion Dollar Thought Experiment

Posted on January 11, 2013 by | 59 comments

By Dan Kervick

Imagine this:  In a burst of manic, public-spirited zeal and budgetary enthusiasm, the US Congress passes, and the President signs, the following law.  (Lawyers, forgive my poor mastery of legalese and feel free to translate the sense of what follows into the appropriate terminology):

L.1  The Secretary of the Treasury shall by a date no later than September 30, 2013 consolidate all United States Treasury accounts into a single account, to be called the “General Account”, and to be held at the Federal Reserve Bank of New York.

L.2  The General Account shall be used to settle and record all payments to and from the US Treasury.

L.3  The Federal Reserve Bank of New York shall on midnight, October 1, 2013 credit the General Account with an initial balance of $1,000,000,000,000,000.00

That’s one quadrillion dollars, about 263 times the current US annual budget, and about 63 times the current US Gross Domestic Product.

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Podcast of My Appearance Today on The Attitude

Posted on January 10, 2013 by | 2 comments

I appeared today on The Attitude with Arnie Arnesen, broadcast by WNHN 94.7 in Concord, New Hampshire.   The topic of our discussion was austerity, disaster capitalism, the upcoming sequestration, Washington corruption and incompetence, and the exaggerations promulgated by Fix the Debt and other such organizations to scare people into undermining progressive government.  Arnie’s questions were great as always.  You can listen to the podcast of the show at the link below.  My segment appears about halfway through the first hour, after the musical break at the 28 minute mark:

“The Attitude” with Arnie Arnesen on WNHN 94.7 FM

Deborah “Arnie” Arnesen is a former member of the New Hampshire House of Representatives, a former fellow of the Harvard Institute of Politics, and was the Democratic nominee in the New Hampshire 1992 gubernatorial race.  She also ran for the U.S. Congress in 1996, and is a very well-known New Hampshire political figure and radio personality.  

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We Need to End The Debt Ceiling Distraction – Now

Posted on January 10, 2013 by | 20 comments

By Dan Kervick

The debt ceiling standoff is a massive national distraction, as is the rampaging blogospheric discussion of the standoff and its various possible resolutions.   I am convinced that both the White House and Congress are eager to keep the debt ceiling debate and conflict alive to distract the country from a much more important reality: that they are currently negotiating the final shape of an economically punishing and magnificently stupid austerity package that will be substituted in for sequestration cuts due to take effect in March.   The austerity package is Washington’s obsequious response to the disaster capitalism cattle stampede that has been urged on by Pete Peterson, Fix the Debt and affiliated groups of debt hysterics.  Whatever combination of tax increases and spending cuts are finally accepted, the result will be to tie a fiscal cement block amounting to about 1.5% of GDP to the legs of an economy that is barely treading water.

But on the odd chance that the White House is actually serious about bringing a quick end to this standoff, the President should make a curt and frank public statement that plainly calls on Republicans to discipline the incompetents in their increasingly ridiculous party before they humiliate the party even further.   The statement should go something like this.

Continue reading →

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US Double-Dip Death Watch Continues

Posted on January 8, 2013 by | 11 comments

By Dan Kervick

I thought I would take a break from the latest outburst of debt ceiling mania to call attention once again to the bipartisan plan of budget austerity and recession-tempting economic devastation that will be implemented in March in one form or another, and from which the debt ceiling debate is designed to distract us.

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Obama and McConnell are Playing the Country – and Mainstream Liberals are the Instrument of Choice

Posted on January 7, 2013 by | 25 comments

By Dan Kervick

Brad DeLong worries that President Obama does not have a strategy to persuade Mitch McConnell and Senate Republicans to back down from their “crazy” threat on the debt ceiling and force them to accept a “real deal”:

I don’t see a strategy from Obama to convince Senator Mitch McConnell (R-KY) and the other debt-ceiling hostage-takers that Obama has a path for what happens after the debt ceiling is breached that he prefers to a real defusing deal.

DeLong’s description here is slightly confusing, because the debt ceiling has already been breached.  It was breached six days ago, and Treasury Secretary Geithner has already informed Congress that the US Treasury is now taking a series of extraordinary accounting measures to continue making all of the government’s payments without increasing the nation’s total debt obligation.  The estimate is that we have a couple of months before the government runs out of the kinds of accounting tricks that will enable the country to avoid defaulting on some its payment obligations without issuing debt above the current statutory limit.   So I assume DeLong just misspoke here, and by “breaching the debt ceiling” he actually means “defaulting on payment obligations”.

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