Thursday, January 4, 2018

Daniel José Camacho — The deficit doesn't matter: thinking morally about the economy with Stephanie Kelton


Social justice folks picking on  MMT.
Just before Christmas, Donald Trump signed the Republican tax bill which many predict will exacerbate wealth inequality in the country. Analyses project it will add over $1 trillion dollars to the deficit.

For all the talk about the national deficit and why it’s the reason our government can’t afford to improve healthcare or education, these developments reveal profound layers of hypocrisy. They show how deficit-talk has constrained political imagination and reduced the economy to a soulless, amoral balance sheet. Earlier this month, I sat down with one of our nation’s leading economists who’s been sounding the alarm on this precise problem.

Stephanie Kelton is a professor at Stony Brook University and a former chief economist for the Senate Budget Committee Democratic staff. If there is such a thing as a prophetic economist, she might just be it. Kelton is not afraid to rattle the status quo. A former adviser to Bernie Sanders (she recalled her trip to the Vatican with him), she is now also providing economic advising to Rev. Barber’s new Poor People’s Campaign.

Kelton’s public intellectual work has drawn attention to how a bipartisan fear of the deficit has distracted politicians from fixing problems in the real economy. Below is an edited transcript of our conversation....
The Christian Century — Practicing Liberation
The deficit doesn't matter: thinking morally about the economy with Stephanie Kelton
Daniel José Camacho

30 comments:

AXEC / E.K-H said...

ICYMI

MMT is advertised as follows: “Social justice folks picking on MMT. … For all the talk about the national deficit and why it’s the reason our government can’t afford to improve healthcare or education, these developments reveal profound layers of hypocrisy. They show how deficit-talk has constrained political imagination and reduced the economy to a soulless, amoral balance sheet.”

Social justice folks are economically illiterate and fall for rhetoric. MMT is a social bluff package for the benefit of the one-percenters. The macroeconomic Profit Law says Public Deficit = Private Profit.

For details see
Down with idiocy!
http://axecorg.blogspot.de/2017/12/down-with-idiocy.html

MMT and grassroots movements
http://axecorg.blogspot.de/2018/01/mmt-and-grassroots-movements.html

MMT and the promotion of Wall Street socialism
http://axecorg.blogspot.de/2017/11/mmt-and-promotion-of-wall-street.html

Egmont Kakarot-Handtke

#MMT #LearnMMT #DebunkMMT #NotDifficult #FailedScience #FakeScience #ScientificIncompetence #ProfitTheory #SectoralBalances #PrivateSectorSurplus #MacroEconomics #DistributionTheory #Debt #Money #Austerity #FullEmployment

Kaivey said...
This comment has been removed by the author.
Kaivey said...

With mini monopolies can the private sector profit always equal 0. An Apple is sold at a maximum premium because people can't go elsewhere. David Bowie records are only available from RCA and so they can charge more.

How does perfect competition work in a global economy, will the products made by the lowest wages always win? If this drives wages right down, will people lose their purchasing power stalling the economy? Will workers in Western countries become poor? Can we have a minimum wage to protect the poor?

Matt Franko said...

“Social justice folks are economically illiterate”

Social justice folks are SCIENTIFICALLY illiterate... they understand what is taught in the Economics Dept of the academe just fine...

Matt Franko said...

“the Republican tax bill which many predict will exacerbate wealth inequality in the country. Analyses project it will add over $1 trillion dollars to the deficit“

Yes, EVERYBODY is down for $1T deficits...

AXEC / E.K-H said...

Matt Franko

Social justice folks are economically, scientifically, and politically illiterate. This is why they are being taken in by the sales-folks of MMT. See

Austerity: Who takes the little man for a ride?
http://axecorg.blogspot.de/2017/08/austerity-who-takes-little-man-for-ride.html

MMT, money printing, stealth taxation, and redistribution
https://axecorg.blogspot.de/2017/11/mmt-money-printing-stealth-taxation-and.html

Because Public Deficit = Private Profit MMT is a wellness-program for the one-percenters and you, Hickey, Calgacus, Cooper, Kelton, Mosler, Mitchell, Tcherneva, Wray, Fullwiler, Forstater, Kaboub, Pettifor, Keen, Tymoigne, Willingham, Grumbine, and many others are selling it as a benefit for the ninety-nine percenters.

Before social justice folks get too enthusiastic about MMT they better switch from emotion to thinking and do some economics homework. See for a start

Down with idiocy!
https://axecorg.blogspot.de/2017/12/down-with-idiocy.html

Egmont Kakarot-Handtke

Andrew Anderson said...

Morally, there are two problems with the debt of monetary sovereigns:

1) Being risk-free, the debt of monetary sovereigns should yield no more 0% and that's for debt with the LONGEST maturity (e.g. 30 yr US Treasury Bonds); shorter maturities should cost even more with account balances at the central bank and physical fiat, aka "cash", costing the most, i.e. most negative interest/yields. Why? In order to avoid welfare proportional to account balance, a moral abomination.

2) The carry trade, using the US as an example, from the US Treasury to primary bond dealers and then (eventually) to the Federal Reserve. This is more welfare for the banks and the rich. Instead, central banks should be forbidden to buy ANYTHING except from their monetary sovereigns (e.g. US Treasury).

Remove those moral flaws and the National Debt would then be a true, revenue earning blessing for the entire Nation and not just for the rich.

Andrew Anderson said...

And, of course, if foreigners could no longer buy welfare proportional to US sovereign debt account balance but instead had to pay negative interest/yields on US sovereign debt, they'd be MUCH MORE LIKELY to buy US goods and services - greatly improving the US trade balance and employment situation.

Who knew that morality could be so practical?

Andrew Anderson said...

Removing welfare proportional to US sovereign debt account balance would probably, by itself, drastically WEAKEN the US dollar but no problem since the demand for US dollars is artificially LOW since only banks and other depository institutions at the FED may use US dollars in convenient, risk-free account form via checking accounts at the FED.

So, allowing all US citizens to actually use their Nation's fiat via convenient, risk-free checking accounts at the FED itself and eliminating government-provided deposit insurance and all other privileges for the banks, both of which are a moral imperative, would INCREASE the demand for US dollars and thus STRENGTHEN the US dollar.

So altogether, reforming the US fiat and credit creation systems along ethical/moral lines might be a wash wrt the strength of the US dollar.

Matt Franko said...

“Social justice folks”

Egmont all the MMT people are some of the most legit social justice people on planet earth...

Andrew Anderson said...

Egmont all the MMT people are some of the most legit social justice people on planet earth... Franko

That's a laugh! Bill Black, for example, calls the banks "our banks". And which one of them calls for justice instead of supplementing private sector wage slavery with public sector wage slavery?


Matt Franko said...

AA,

"Now to the one who works, wages are not credited as a gift but as an obligation." Romans 4:4

There is no such thing as "wage slavery" its an oxymoron...

If someone is working, they receive wages in payment of A DEBT...

Slaves receive ONLY rations... NOT wages...

You are mixing OT teachings for Israel with Paul's teaching for we non-Israelites into a moron cocktail...

I have no idea what you are talking about where somehow if somebody goes and gets a loan that is somehow "slavery"... its like any debt it just is simply paid over time...


Kaivey said...

Sounds good to me, I like Ellen brown's idea of having high street public banks.

AXEC / E.K-H said...

Matt Franko

You say “… all the MMT people are some of the most legit social justice people on planet earth...”

This, of course, is what they are trying to tell the genuine social justice people of the genuine grassroots movements. In fact, MMT is nothing but good old Political Economy.

What the genuine social justice people have first of all to understand is that there is political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.

Economics started as Political Economy, that is, as open agenda pushing for the one-percenters, and in the last 200+ years never advanced to a real science. Economists never rose above the proto-scientific level of Adam Smith/Karl Marx.#1

MMTers, like their peers from the other sects, do until this day not understand the difference between profit and income, i.e. of the fundamental concepts of economics.#2 Because of this, MMT is pure proto-scientific junk = political blather.

Do the genuine social justice people need the support of academics who are too stupid to put 2 and 2 together, that is, who do not even get the sectoral balances of macroeconomics right?#3 The grassroots movements need MMT like a hole in the head.

It is the other way round: the MMTers need the grassrooters to push their own agenda. The debt-does-not-matter meme has no other purpose than to encourage deficit spending for everything which, in turn, has one absolutely certain effect due to the Profit Law, i.e. Public Deficit = Private Profit, that is, to make Wall Street happy.

To pose as social justice fighters is one of the oldest tricks of Political Economy. It is applied right before our eyes by Stephanie Kelton and the other members of Warren Mosler’s academic sales team.

The claim that “all the MMT people are some of the most legit social justice people on planet earth” is perhaps effective for hijacking genuine grassroots movements but otherwise simply a bad joke.

With MMT, original brain-dead Political Economy has, after some pseudo-scientific and pseudo-social window dressing, come full circle.#4

Egmont Kakarot-Handtke

#1 Economics: 200+ years of scientific incompetence and fraud
http://axecorg.blogspot.de/2017/06/economics-200-years-of-scientific.html

#2 For the proof see cross-references MMT
http://axecorg.blogspot.de/2017/07/mmt-cross-references.html

#3 Down with idiocy!
http://axecorg.blogspot.de/2017/12/down-with-idiocy.html

#4 The end of political economics
https://axecorg.blogspot.de/2017/06/the-end-of-political-economics.html

Andrew Anderson said...

There is no such thing as "wage slavery" its an oxymoron...
Franko

Wage-slavery:

1) Steal the means of production from the population, e.g. family farms and businesses, via government-privileged private credit creation and the normal working of the resultant boom-bust cycles.

2) Hire the former owners to work on their stolen farms, businesses, etc.

3) Destroy the bargaining power of the workers via automation financed directly or indirectly with government-privileged private credit creation.

Result: wage-slavery.

Debt-slavery: Drive the population into debt with government-privileged private credit creation. The alternative is to risk being priced out of the market forever.

Matt Franko said...

"To pose as social justice fighters is one of the oldest tricks of Political Economy. It is applied right before our eyes by Stephanie Kelton and the other members of Warren Mosler’s academic sales team."

They are not "posing" and it is not a "trick", now you are starting with the conspiracy theories... these people are sincere

They are just not fully technically competent due to the poor training they have received by going thru the economics dept in the academe...

This is NOT a "trick" or "posing"... they are legit SJWs... just not adequately trained in the STEM discipline...

Matt Franko said...

"Steal the means of production from the population, e.g. family farms "

Do the math...

We have 110M households in the US so 3 per household and 0.48 hectares of arable land per capita... so that works out to about 1.5 hectares of land per household...

1 hectare is about 2.5 acres so 7.5 acres per household...

US produces about 175 bushels of corn per acre so 175 times 7.5 acres is 1300 bushels of corn at $3 per bushel is $3900 annual...

So how does a household survive on < $4k/year in your Israelite/OT utopia????

Noooooo thanks!!!!!!

Andrew Anderson said...

So, the only alternative to systemic theft and oppression of the poor is national poverty, Franko?!

Care to explain that to the Lord when you are judged?

“Not everyone who says to Me, ‘Lord, Lord,’ will enter the kingdom of heaven, but he who does the will of My Father who is in heaven will enter. Many will say to Me on that day, ‘Lord, Lord, did we not prophesy in Your name, and in Your name cast out demons, and in Your name perform many miracles?’ And then I will declare to them, ‘I never knew you; depart from Me, you who practice lawlessness.’" Matthew 7:21-23 New American Standard Bible (NASB)

AXEC / E.K-H said...

Matt Franko

For facts see MMT meme on Wikimedia
https://commons.wikimedia.org/wiki/File:AXEC122.png

Egmont Kakarot-Handtke

Matt Franko said...

“depart from Me, you who practice lawlessness.“

Banking and loans are perfectly legal .... what law is anybody breaking today under the present arrangements???

Here riddle me this one; He also said “the poor you will always have” so what makes you think YOU can rid the earth of the poor among us if even HE couldn’t do it under those old laws genius?????

Tip: more heavy doses of libertarianism isn’t going to do it....

AXEC / E.K-H said...

Matt Franko, Andrew Anderson

The Lord spoke out of the bush to me and handed over these Ten Economics Commandments:

1. Never cite the Bible or other religious texts in an economic argument.

2. Maintain the strict separation of science and religion under all circumstances.

3. Maintain the strict separation of science and politics under all circumstances.

4. Do not dabble in Psychology, Sociology, Anthropology, History, Political Science, Social Philosophy, or any other of the so-called social sciences.

5. Figure out how the actual economic system works and communicate your results in the format of a materially/formally consistent theory.

6. Absolutely refrain from storytelling, metaphors, analogies, narratives, gossip, insinuation, filibuster, and other rhetorical means.

7. Do not apply Methodological Individualism/Microfoundations.

8. Do not moralize, the subject matter of economics is IS not OUGHT. How the Good Society can be realized has to be determined in the political sphere.

9. Be aware that there are knowledge and opinion, science and non-science, scientific standards and anything-goes, true and false with nothing in-between, and that most people are unable to get out of the proto-scientific swamp.

10. Be sure that those who violate scientific standards go to hell and will be tortured in all eternity with the senseless blather of Walrasianism, Keynesianism, Marxianism, Austrianism, and MMT.

Egmont Kakarot-Handtke

Andrew Anderson said...

1. Never cite the Bible or other religious texts in an economic argument. AXEC / E.K-H

Here's something for you. In the Bible, specifically the OT, profit is good yet profit taking isn't good (except from foreigners for the purpose of subjugating non-believers).

So how can one have profit without profit taking? One means is the use of common stock as private money. But why should equity owners SHARE their wealth when government-privileged private credit creation allows them to legally steal the purchasing power of the general population? While keeping their wealth?

That little clue, that profit is good but profit taking isn't good (except from foreigners) would have saved Western civilization alot of misery IF ONLY we had taken the Bible seriously wrt economic matters.

Andrew Anderson said...

Here riddle me this one; He also said “the poor you will always have” ... Franko

Because of disobedience which you should know from Deuteronomy 15. Your ignorance of the OT is tripping you up

Matt Franko said...

People always trying to impose that old manifestly failed system of Israelite laws is what is tripping us up...

You say "Because of disobedience which you should know from Deuteronomy 15."

F your deuteronomy I am not an Israelite ... it has no applicability to me and never has...

Next youre going to tell me that I have to stone homosexuals...I can tell you I for one will never stone a homosexual for being a homosexual I can tell you that... nor will I be held under any other of those failed constructs... its all failed BS...

Can't eat shrimp? Can't eat clams and oysters? No more North Carolina BBQ? please... its over...

AXEC / E.K-H said...

Andrew Anderson

The axiomatically correct macroeconomic Profit Law is given for the general case as Qm=Yd+(I−Sm)+(G−T)+(X−M). Legend: Qm total monetary profit, Yd distributed profit, I investment expenditures, Sm monetary saving, G government expenditures, T taxes, X exports, M imports.

Neither Walrasians, nor Keynesians, nor Marxians, nor Austrians got profit right until this very day. This is why economics is a failed science.

From the general macroeconomic Profit Law follows Qm=G−T if Yd, I, Sm, X, M = 0, that is, Public Deficit = Private Profit.

With deficit spending and the permanent increase of public debt, MMT promotes the agenda of the one-percenters.

Egmont Kakarot-Handtke

Andrew Anderson said...

With deficit spending and the permanent increase of public debt, MMT promotes the agenda of the one-percenters. AXEC / E.K-H

Yet some increase in the amount of fiat is undoubtedly good to keep up with population growth to prevent the old from looting the young via deflation. Likewise, risk-free fiat hoarding should be discouraged too by continual increases in the supply of fiat.

Then how about all deficit spending and all other fiat creation to be in the form of equal fiat distributions to all citizens?

AXEC / E.K-H said...

Andrew Anderson

You say: “Yet some increase in the amount of fiat is undoubtedly good to keep up with population growth to prevent the old from looting the young via deflation.”

Admirable, how you mess every issue up.

There are TWO ways to bring money into circulation and MMT deficit spending is definitely the wrong way.#1

Egmont Kakarot-Handtke

#1 The creation and value of money and near-monies
https://axecorg.blogspot.de/2017/12/the-creation-and-value-of-money-and.html

Andrew Anderson said...

The best way to prevent bank runs from ever happening is the unconditional guarantee of the central bank to exchange bank money anytime and in any amount into central bank money. AXEC / E.K-H

Oh no (groan), I thought better of you than a defender of government privileges for usurers.

Actually, bank runs are good - they are only bad if people are forced to deal with banks, as they currently are since citizens are not allowed to deal with fiat except in the form of grubby, unsafe, inconvenient physical fiat, a.k.a. "cash".

So you are no defender of the 1% but you defend government privileges for usurers?! Does not compute.

Andrew Anderson said...

Can't eat shrimp? Can't eat clams and oysters? No more North Carolina BBQ? please... its over... Franko

So general principles such as do not steal and do not oppress the poor and helpless are over?

Care to explain that to the Lord when He judges you?

AXEC / E.K-H said...

Economics for believers
Comment on Andrew Anderson on Daniel José Camacho on ‘The deficit doesn’t matter: thinking morally about the economy with Stephanie Kelton’

The Lord spoke out of the bush and handed over these
Twelve Economics Commandments:

1. Never cite the Bible or other religious texts in an economic argument.

2. Maintain the strict separation of science and religion under all circumstances.

3. Maintain the strict separation of science and politics under all circumstances.#1

4. Do not dabble in Psychology, Sociology, Anthropology, History, Political Science, Social Philosophy, or any other of the so-called social sciences.

5. Do not believe: prove.

6. Figure out how the actual economic system works and communicate your results in the format of a materially/formally consistent theory.

7. Absolutely refrain from storytelling, metaphors, analogies, narratives, gossip, insinuation, filibuster, propaganda, disinformation, and other rhetorical means.

8. Do not apply Methodological Individualism/Microfoundations.#2

9. Do not moralize, the subject matter of economics is IS not OUGHT. How the Good Society can be realized has to be determined in the political sphere. See 3.

10. Be, first all, aware that there are knowledge and opinion, science and non-science, scientific standards/ethics and anything-goes, true and false with nothing in-between. The ethics of science is objectivity, i.e. material and formal consistency.

11. Rest assured that those who violate scientific standards/ethics go to hell and will be tortured in all eternity with the senseless blather of Walrasianism, Keynesianism, Marxianism, Austrianism, and Pluralism.#3

12. Make no mistake: alone scientists will go heaven. As you can easily imagine, the Lord will not share eternity with morons, imbeciles, agenda-pushers, blatherers, and fake scientists.

Egmont Kakarot-Handtke

#1 The strict separation of the scientific realm and the political realm is necessary because politics always and everywhere corrupts science. This point has been made abundantly clear by J. S. Mill: “A scientific observer or reasoner, merely as such, is not an adviser for practice. His part is only to show that certain consequences follow from certain causes, and that to obtain certain ends, certain means are the most effectual. Whether the ends themselves are such as ought to be pursued, and if so, in what cases and to how great a length, it is no part of his business as a cultivator of science to decide, and science alone will never qualify him for the decision.” For details see Throw them out! Orthodox and heterodox economists are unfit for science
http://axecorg.blogspot.de/2017/12/throw-them-out-orthodox-and-heterodox.html

#2 If it isn’t macro-axiomatized, it isn’t economics
http://axecorg.blogspot.de/2017/02/if-it-isnt-macro-axiomatized-it-isnt.html

#3 Economics is not a science, not a religion, but proto-scientific rubbish
http://axecorg.blogspot.de/2017/07/economics-is-not-science-not-religion.html