Category Archives: Joe Firestone

Make ‘em Prove the Causality before They Cause Any More Suffering: Part One

Posted on May 2, 2013 by | 22 comments

By Joe Firestone

OK, austerity has always been about the causality. The people who are trying their best to get us to cut more and more spending, somewhat less than their best to get us to raise taxes, and who are doing nothing to fix our fraud-laden financial system, or the worst period of dis-employment we’ve experienced since the Great Depression, have been making other people (never themselves) suffer, because they believe the theory that excessive public debt hurts economic growth, and that to get rid of it we must follow a plan of long-term deficit reduction. And I’m being very charitable when I opine that they believe in this theory, because the alternative is that they don’t believe it, but are just using it as an excuse to make other people suffer, and widen the wealth gap between themselves and the rest of the population. Continue reading →

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Reply to Reinhart and Rogoff’s NYT Response to Critics

Posted on April 26, 2013 by | 46 comments

By
Warren Mosler
(Cross-posted with permission of the author from
The Center of the Universe)

The intellectual dishonesty continues. As before, it’s the lie of omission.

R and R are familiar with my book ‘The 7 Deadly Innocent Frauds of Economic Policy’ and, when pressed, agree with the dynamics.

They know there is a more than material difference between floating and fixed exchange rate regimes that they continue to exclude from their analysis. Continue reading →

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Revisiting the Budget Plague

Posted on April 16, 2013 by | 60 comments

By Joe Firestone

Deficit spending by the government is merely the counterpart of private sector saving. What government deficit spending does is to permit the private sector to achieve its level of desired saving. When the latter changes, government spending ought to be adjusting in the opposite direction to offset it (unless the current account balance happens to do the job).

This very simple statement by Marshall Auerback reflects the Sector Financial Balances (SFB) Model I discussed in “A Plague On All Your Budgets.” The Sector Financial Balances Model:

Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0; Continue reading →

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Hell No! The Ultimate Pushback against the Grand Bargain

Posted on April 11, 2013 by | 15 comments

By Joe Firestone

The underlying rationale for “a Grand Bargain” and the President’s deficit reduction budget including cuts to both Social Security (SS) and Medicare and many valuable discretionary programs, apart from the pragmatic justification, that he may be able to complete such a bargain with the Republicans and blue dog Democrats in Congress, is that the fiscal health of the United States requires that we can’t keep running annual deficits of the size we’ve been running. Why? Because that results in increases to our debt-to-GDP ratio, which in turn will cause the bond markets to drive up our interest rates higher and higher and eventually make interest on the Federal debt such a large share of the Federal Debt that we won’t have money for anything else. So, we have to implement a long-term deficit reduction plan to ensure the fiscal sustainability of the Federal Budget. To do anything else would be fiscally irresponsible. Continue reading →

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They’re Making Love to the Third Rail: What Are We Gonna Do About It?

Posted on April 7, 2013 by | 33 comments

By Joe Firestone

OK, the President has officially proposed the “chained CPI” cut to Social Security in opposition to what the heavy majority of American voters want him to do and in contradiction with promises he and Joe Biden made during their re-election campaign. So, what punishment should we exact from this Administration, and what should we do to prevent cuts from happening in addition to signing petitions, and calling Representatives and Senators? Continue reading →

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Letter to the President: If Social Security Solvency’s really a Problem Then Why Not Do This?

Posted on March 29, 2013 by | 184 comments

By Joe Firestone

Dear Mr. President,

Over the past 3 years you’ve returned again and again to the idea that Social Security has a long-term solvency problem, and therefore needs “reform,” even though, as of the end of 2012, the “Trust Fund” had nearly $2.7 Trillion in it. In spite of this healthy trust fund asset balance, SS Trustee projections, say that the trust fund will be down to zero by 2033 and that thereafter, until 2086, SS will be able to pay roughly only 75% of scheduled benefits without either cuts or increased sources of revenue. Continue reading →

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A Plague on All Your Budgets

Posted on March 26, 2013 by | 47 comments

By Joe Firestone

The Sector Financial Balances Model:

Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0

is an accounting identity that provides a focus for macroeconomic analysis, explanation, and prediction by economists applying the Modern Money Theory (MMT) approach. It leads to a very critical line of thinking about the budget deficit projections produced for our consumption by the Congressional Progressive Caucus (CPC), Congressional Budget Office (CBO), the House, and the Senate. The US has recently had a sharp decline in its balance of trade deficit. It now stands at about 3% of GDP; which means that the rest of the world has a surplus, a balance of +3% of US GDP in its annual trade with the United States.  Continue reading →

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Is It Really About “Dysfunctional” Partisanship?

Posted on March 9, 2013 by | 24 comments

By Joe Firestone

The popular narrative in Washington, DC these days among the MSM pundits is that the Congress is “dysfunctional” in the sense that it is very difficult for it to pass a budget and rise above periodic “fiscal” “debt” and “deficit” crises. This difficulty is attributed to the failure of our representatives to rise above their party interests and to accept compromises proposed by “adults” such as the President, which would, it’s claimed, resolve our long term “fiscal sustainability”/”fiscal responsibility” problem through a “balanced” long-term $4 Trillion deficit reduction plan.

Continue reading →

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“Fixing the Debt Without Breaking America” now available

Posted on March 5, 2013 by | 55 comments

NEP’s Joe Firestone has just published a kindle book  timed to coincide with the arrival of the sequester deadline. The book, Fixing the Debt without Breaking America: Austerity, the Trillion Dollar Coin, and Ending Debt Ceiling, Sequester, and Budgetary Crises, consists of reorganized content from Joe’s blogs plus three completely new chapters. You can follow this link to get a copy.

Continue reading →

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Framing Platinum Coin Seigniorage: A Working Document

Posted on February 5, 2013 by | 9 comments

By Joe Firestone

Jack Foster proposed a framing document for High Value Platinum Coin Seigniorage, in a recent comment he made on one of my posts. In response, I posted a six-part blog series to accommodate readers who prefer the blog format.

Continue reading →

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