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Should troll Fancy Pelosi be allowed to stay?
This poll is closed.
Yes 160 32.92%
No 326 67.08%
Total: 486 votes
[Edit Poll (moderators only)]

 
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Fighting Trousers
May 17, 2011

Does this excite you, girl?

Velocity Raptor posted:

So how long until all these dumbass laws cause businesses to up and leave deep red states?

Here in Oklahoma, they don't care, because the only industry that matters is the almighty OIL AND GAS, and they don't want any competition.

eta: ugh, phone-posting, can't pay tax

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Kraftwerk
Aug 13, 2011
i do not have 10,000 bircoins, please stop asking

evilweasel posted:

Modern Monetary Theory seems - as commonly discussed - to veer from trivially true things to wildly incorrect assertions based on misunderstanding those trivially true things. It is much like the laffer curve - it is trivially true that at 0% tax and 100% tax you're probably getting no taxes, and your ideal tax rate is somewhere above 0% and below 100%. That is trivially true and useless. The conclusion drawn from it - lower taxes, get more revenue! - is, as everyone here knows, entirely false.

People who appear to not be economists have seized on modern monetary theory to argue, basically, (1) if a country issues debt denominated in its own currency, that debt doesn't really matter - you can always print more money to satisfy it. Further, that (2) because the sovereign issues currency, taxes and spending aren't really "taking" and "spending" money in the way you envision it, but instead "destroying" and "creating" money.

Combined, these are used to effectively advocate that debts/deficits aren't really relevant.

When MMT is correct, it is basically trivially correct in that it is not wrong, per se. (2) is basically this - sure, you can think of it that way and just by thinking in that way you have not said something technically wrong. It is not, however, a useful way to think about government taxing and spending at all. (1) is in a sense trivially true - yes, a government can inflate its currency to nothingness and thus effectively abolish its debt. But in a more accurate sense, you are effectively saying "you don't have to declare bankruptcy to eliminate your debts! just commit suicide!" It is a fantastically stupid approach. A country can just default on its debt! Just ask Argentina, which does it with such regularity that if you have an Argentinian government bond you are legally considered a sucker. Defaulting on your debt is bad, but it is infinitely better than hyperinflating your own currency to basically (but not technically!) default on your debt - because you get all the downsides of defaulting on your debt AND you have wrecked your ability to issue your own currency for the foreseeable future, at great additional cost to your economy.

How Should You Think About Taxing And Spending Of A Government?

If you want to understand taxing/spending/deficits, a dumb model where you are creating and destroying currency isn't helpful. Instead, eliminate the model and go straight to what is actually happening. A government requires labor and materials. Our government employs hundreds of thousands of people. It has immense amounts of material things procured for it (e.g. road building materials, military hardware, or just plain computers for those hundreds of thousands of workers). That labor and materials comes out of the wider economy. A government must have a mechanism for obtaining it.

That doesn't have to be by money! The government can simply compel labor - for example, the military draft. A government can compel labor in other ways - ancient governments would require forced labor from free people as a form of taxation, or just enslave some portion of the people under its control. It can simply obtain material in kind - for example, medieval kings might just requisition food for their army as they passed through instead of paying for it.

But at the end of the day, the government takes goods and services from the wider economy. Over human history we have learned which methods are better at causing less collateral damage (randomly requisitioning poo poo-tons of goods - not a good method) and/or are more moral (it is, generally, frowned upon to run your government with slaves these days). We have, generally, settled on taxation: citizens pay taxes in money (not goods), and the government uses that money to purchase goods and services in the market like any other market participant. That money can be its own locally-printed currency, or it can be commodity currency (e.g. gold). But at the end of the day, the principal reason we do things this way instead of directly compelling the provision of goods and services is that it works much, much better - people prefer to pay currency than be compelled to labor and you can get specialists, taxing in money instead of taking the goods you need encourages rather than discourages the production of those goods.

But everything the government uses, it has taken from the wider economy. It has done so directly (seizure of the goods it wants, compulsory labor for services) or indirectly (cash taxation, and payment for services and goods), or something in between. At the end of the day, any method of funding a government involves this transfer. You can model it in different ways, but that's the core thing that is occurring. As long as the government is paying for goods and services, the money for that is coming from somewhere.

How Does Our Government Work?

Our government, as everyone knows, taxes people to obtain money, and spends money on goods and services. But our government spends more on goods and services than it takes in in taxes. Where does that excess come from?

In our system, it comes from the holders of US debt. If I buy a government bond, I forego some goods or services I could have, in exchange for a promise I will obtain money from the government in the future to obtain goods and services. The expectation is that this payment (denominated in dollars) will allow me to purchase approximately equal or greater goods and services in the future. Purchase of US government debt is voluntary: it is not a tax (requiring everyone to purchase debt would just be another form of tax).

You pay interest on that debt. How much interest depends on the market for capital. For the past decade+, that interest has been effectively zero or negative because we have been in a demand slump. This is not usually the case: when there is more demand for capital than capital, you will pay higher interest rates.

How Does Taxing and Spending Impact The Economy?

Taxing acts as a drag on the economy. It has to: it's taking goods and services out of the economy (indirectly). Spending, on the other hand, generally acts as a boost to the economy - you are increasing demand for goods and services and offering a profit to provide them.

When you're spending more than you tax, you can be benefiting the economy. If you are taxing more than you are spending, you can be reducing the economy (this can be beneficial when the economy is in a bubble). That's not always true, but it's generally true.

Keynesian economics - the basically correct form of economics - says that over the long term you should borrow money in recessions to benefit the economy, and then overtax and pay that money back in boom times, to deflate the economy. This is because recessions are usually demand-driven - there is less demand for goods and services than the economy could supply, so you create new demand. Further, boom times are also generally demand driven - there is more demand for goods and services than the economy can supply, so you need to reduce that demand (to avoid creating asset bubbles).

Overall, you should not run a deficit because you want to be most efficiently matching the money you take out vs. you put in.

What Are Alternatives To Issuing Debt?

Sometimes a country wants to spend more than it can tax, and it can't or won't issue debt. It can then fund its spending by "seniorage" - printing new money. The government takes in $100 billion, it prints $50 billion, and then spends $150 billion. Where did this additional $50b of goods and services come from?

It came from the only place it can: the wider economy. The government got $150b of goods and services, so in some way it extracted $150b of goods and services. The only question is how.

Generally speaking, it did this by inflation. It made its currency worth less: $1 of currency before the creation of the additional $50b bought you more goods and services than it does today. What you have effectively done is instituted a tax on cash holdings. This is considered a tremendously bad idea, generally speaking, because it is how hyperinflation happens. If the government is simply minting currency to pay its debts, that currency will generally trend rapidly towards being worthless. It's not hard to evade this implicit tax - you just trade your local currency for a different one. A rich person with WeimarBucks sells them and buys dollars, and puts those dollars in a bank account - and thus doesn't pay this tax. But that enhances the drop in value of the currency (many people want to sell it; few people want to buy it) and you get a hyperinflationary spiral.

At the end of a hyperinflationary spiral, you effectively lack the ability to issue a national fiat currency. This is a bad thing, because a national fiat currency does a lot of natural balancing of imports and exports that smooths out the country's business cycle. If your country uses the currency of another nation, that can seriously damage your economy if the economy of that nation doesn't match yours the currency will move the opposite way it should, deepening recessions and inflating asset bubbles.

Now, sometimes - when you are in a recession where demand for goods and services is lower than the economy can supply - you don't cause inflation. Here, you are doing exactly what Keynesian economics suggests you do - you are creating artificial demand. You've just done it through a different method. This unusual case is what has happened since the financial crisis. The Fed has printed a lot of currency and used it to create artificial demand. The key thing here is that the Fed is kept very separate from the rest of the government so that the Fed doesn't get pressured to create money to fund the government - instead, it uses its money creation powers only to balance the economy (and, it is paired with the power to effectively destroy that created money at the appropriate time - something governments operating via seniorage generally do not do). This is all well understood by Keynesian economics and is why the Fed - despite republicans - has taken this course since 2008. It is not something MMT has shown anyone.

What Does Modern Monetary Theory Tell Us?

Nothing.

On debt - yes, you can fund your government, if it issues debt in its own currency, by printing new currency to inflate that debt away to nothingness. You have now effectively defaulted on your debt - that you did not "technically" do so won't matter to anyone. But you also ruined your ability to issue new fiat currency. That was a stupid thing to do as well, because you can just say "guys we're not going to pay our debt, sorry" without wrecking your currency as well. Either way, you're not issuing new debt anytime soon.

What does it tell us about our deficits? Nothing. The MMT answer is basically "it doesn't matter" or "it doesn't matter until it causes inflation". The first is nonsense. The second is trivially true but Kenesian economics already told us that.

MMT appears to be a backlash to Republican economics, which tells us that our deficit means we are spending too much. MMT wants to preserve and enhance our spending, so it says "deficits don't matter".

But does our "structural" deficit (the deficit we run overall, not just today) actually tell us? It tells us that we are spending too much or our taxes are too low. And the actual answer is (b) - our taxes are too low. The deficit should be fixed not by cutting spending, but by increasing taxes.

Republicans believe you can't raise taxes. People advocating MMT appear to have accepted that principle, which is a stupid principle. It is arguing to, essentially, ignore the deficit. But we shouldn't! We've fixed our deficit in my lifetime - when President Clinton raised taxes. We re-created it again in my lifetime - when Bush II cut taxes. We would trivially fix the deficit by returning to Clinton-era tax rates, and have plenty of room to grow spending. There is no reason to accept this stupid republican principle of "never increase taxes" and create a new, stupid, economic theory around it.

People tend to argue MMT in opposition to Republican economics, say republican economics are stupid, therefore MMT is right. Yes, republican economics are stupid. But they're not real economics. Keynesian economics is the gold standard, not the babble of the republican party, and you need to do better than that, not "it is an immutable law of the universe American taxes cannot go up".

We agree our government needs to supply more goods and services than the taxes it raises pay for. We should not solve that by some nonsense about how money isn't real and we're creating and destroying it every second where the conclusion is a laffer-curve esque "we can just have a free lunch!" We should just fix it by raising taxes.

This is an excellent post and answers some really important questions I’ve had regarding government spending.
It essentially reinforces the idea that we have to start taxing smarter in order to restore equilibrium to the economy and keep money circulating. Piketty goes into this with his books as well.

There’s just a few unanswered questions for me.

1. How do you efficiently tax people in this globalized era where it’s trivial to hide your money off shore? Or create legal entities that exist outside of US tax jurisdictions despite the bulk of their revenues coming from America? It seems to me that if you raise taxes they’ll just find new ways to make their tax liabilities go to 0. At best you can try to eliminate tax credits so you aren’t paying Amazon to be rich.

2. Keynesian economics as you said seems to be the “correct” way to run the economy. But I haven’t found a solution to stagflation. We’re targeting full employment or some variant of it which means labor will always have the ability to negotiate a higher share of added productivity. This adversarial relationship with capital creates that stagflation problem where value can only be extracted by raising prices which results in higher labor costs which results in higher prices until business gives up and stops growing.

The last time this happened we switched to monetarism and elected Reagan and Thatcher. The economy has spent the last 30 years as a zero sum game where capital continuously erodes labour’s share of the proceeds and has grown through this method and offsetting the political power balance.

How do we get it right assuming Bidenomics restores Keynesian economics to prominence? By the time millennials hit their retirement age, Gen Zs kids will be worshipping some figure that resembles a cryptocurrency Gordon Gecko with a neck tattoo and some Mars shuttle will explode.

Kraftwerk fucked around with this message at 17:09 on May 1, 2021

haveblue
Aug 15, 2005



Toilet Rascal

Kraftwerk posted:

1. How do you efficiently tax people in this globalized era where it’s trivial to hide your money off shore. Or create legal entities that exist out of US tax jurisdictions despite the bulk of their revenues coming from America? It seems to me that if you raise taxes they’ll just find new ways to make their tax liabilities go to 0. At best you can try to eliminate tax credits so you aren’t paying Amazon to be rich.

The Biden administration is already working on an international initiative to counter this sort of thing by aligning taxation worldwide and applying multilateral pressure to tax havens

Epicurius
Apr 10, 2010
College Slice

Data Graham posted:

I'm sure we all remember the South Park take, which was "just hit the kids more and they'll shut up"

I mean, South Park exaggerated it some, but that was actually a popular take at the time. It fit in with a pretty popular narrative about childrearing at the time...that for a whole bunch of reasons, parents in the 90s coddled and spoiled their kids; everything from the decline in spanking as punishment to "participation trophies" and stuff about that.

Quorum
Sep 24, 2014

REMIND ME AGAIN HOW THE LITTLE HORSE-SHAPED ONES MOVE?

Epicurius posted:

Its in reference to Adderal, which, while not methamphetamine, is an amphetamine. Its one of the drugs used to treat Attention Deficit Hyperactivity Disorder, which is a chronic mental condition usually diagnosed in children that affects things like mental focus, concentration and impulse control .

It started being diagnosed heavily in the 90s and there was a backlash, with some people saying that it was ovediagnosed and a lot of the people who were diagnosed with it were just undisciplined. Hence the 'handing out meth like candy ro misbehaving children'.

Yeah, the idea that using medically well-supported stimulants to treat a disorder with serious and often invisible effects on every aspect of life is basically the same as handing out meth is really harmful and stigmatizing. It's a version of the same old lovely cultural narrative that America loves to tell about every other mental health issue-- you just need tough love, you just need to try harder, you just need to stop relying on drugs to fix your problems. With ADHD specifically, the fact that it's a developmental disorder means it's often identified during childhood, but families with money and access to medical resources are far more likely to get their kid diagnosed, which contributes to an image that it's a fake disorder made up to let rich parents drug their kids. That's not true, and reinforcing that narrative only contributes to keeping less-privileged people from accessing care and maintaining the image of ADHD as a rich white kid thing.

Josef bugman
Nov 17, 2011

Pictured: Poster prepares to celebrate Holy Communion (probablY)

This avatar made possible by a gift from the Religionthread Posters Relief Fund

Thank you!


Popular narratives on childrearing are often so incorrect as to be actively harmful from current observation.

Kraftwerk
Aug 13, 2011
i do not have 10,000 bircoins, please stop asking

Quorum posted:

Yeah, the idea that using medically well-supported stimulants to treat a disorder with serious and often invisible effects on every aspect of life is basically the same as handing out meth is really harmful and stigmatizing. It's a version of the same old lovely cultural narrative that America loves to tell about every other mental health issue-- you just need tough love, you just need to try harder, you just need to stop relying on drugs to fix your problems. With ADHD specifically, the fact that it's a developmental disorder means it's often identified during childhood, but families with money and access to medical resources are far more likely to get their kid diagnosed, which contributes to an image that it's a fake disorder made up to let rich parents drug their kids. That's not true, and reinforcing that narrative only contributes to keeping less-privileged people from accessing care and maintaining the image of ADHD as a rich white kid thing.

Alright it was an off handed joke I made based on my own history with this stuff. I had teachers trying to diagnose me with ADD and get me drugged up with Ritalin for most of grades 2-6 because I was bored in class and wanted to do fun poo poo instead of study. Nobody bothered to help me channel my frustration in a productive fashion and just wanted to stop me from being disruptive by dumping drugs on me. Took 3 different medical professionals and numerous tests later to basically tell all those teachers they’re idiots who are overstepping their boundaries.

Later as an adult I did end up experimenting with adderall and concerta mostly to see if it would help me do better in college and it didn’t change anything except make me feel on edge and anxious. It was always a motivation and willpower thing. There were things I categorically hated and refused to do (like management accounting exams) which felt so dry and awful that I found staring at paint dry to be more exciting. Now that I’m older with the knowledge I have today, if I could go back in time to my childhood body I’d have done something totally different with school and likely would have more control over my career today. But hindsight is 20/20 right?

So I apologize if I offended anyone. My relationship with ADD, the related drugs and the teachers who thought they knew how to diagnose me were highly adversarial and rooted in people trying to take short cuts because they couldn’t figure out how to deal with my rebellious, antagonistic and disruptive childhood self. Most of my teachers thought I’d never amount to much or go to university and I’ve proven everyone wrong but I did so with margins as narrow as the US election.

SocketWrench
Jul 8, 2012

by Fritz the Horse

BigBallChunkyTime posted:

Republicans: "The government should not interfere in the affairs of private business! The free market will decide!"

Also Republicans: "No, not like that!!"

Always fun to watch their lovely ideals they uphold swing around to boot them in the rear end.

Bushido Brown
Mar 30, 2011

evilweasel posted:

:words:

When MMT is correct, it is basically trivially correct in that it is not wrong, per se. (2) is basically this - sure, you can think of it that way and just by thinking in that way you have not said something technically wrong. It is not, however, a useful way to think about government taxing and spending at all. (1) is in a sense trivially true - yes, a government can inflate its currency to nothingness and thus effectively abolish its debt. But in a more accurate sense, you are effectively saying "you don't have to declare bankruptcy to eliminate your debts! just commit suicide!" It is a fantastically stupid approach. A country can just default on its debt! Just ask Argentina, which does it with such regularity that if you have an Argentinian government bond you are legally considered a sucker. Defaulting on your debt is bad, but it is infinitely better than hyperinflating your own currency to basically (but not technically!) default on your debt - because you get all the downsides of defaulting on your debt AND you have wrecked your ability to issue your own currency for the foreseeable future, at great additional cost to your economy.

:words:

It’s hard to take your verbose critique seriously when you lead with Argentina, a country saddled with IMF debt. Because Argentina is saddled with IMF debt it isn’t in total control of its currency. As a result, MMT proponents would agree that Argentina is an example of what can go wrong, just for different reasons than you do.

You generally seem to approach sovereign debt as similar to corporate debt. I don’t think that holds, and I don’t agree that a country that has gone through a needed inflationary period has “wrecked” its ability to issue its own currency. The Plano Real was implemented after a period of hyperinflation. And yet, Brazil successfully rebooted its currency and was able to stem the bleeding thanks to smart monetary planning.

I don’t want to get into an evilweasel slap fight over an economic theory I’m not sure I agree with. But when I read e.g., Wray, Kelton, Grey, I find them compelling, and at times they have lucid answers to questions that orthodox economists struggle with.

To give just one example, Minsky (in addition to contemporary folks writing about Minsky) seems to provide some good macroeconomic answers about the drivers of the financial crisis. Pre ‘08, Minsky was certainly seen to be useless. Post ‘08 you see Minsky everywhere.

Whether it makes sense to push ahead with MMT-informed policy isn’t something I feel comfortable opining on. But the notion that MMT provides “nothing” of value seems dogmatic and facile.

Ghost Leviathan
Mar 2, 2017

Exploration is ill-advised.
The short version I got was that while MMT isn't entirely correct, it's way less catastrophically wrong than the mainstream models of economics used to craft monetary policy around the world.

Ither
Jan 30, 2010

evilweasel posted:

Republicans believe you can't raise taxes. People advocating MMT appear to have accepted that principle, which is a stupid principle.

I don't think this is actually true.

I heard Stephanie Kelton talk on the Majority Report sometime back, and I believe she mentioned taxes.

Solenna
Jun 5, 2003

I'd say it was your manifest destiny not to.

BIG FLUFFY DOG posted:

twitter buys a lovely-rear end tilt-a-whirl in panama city sticks a food truck selling 10 dollar elephant ears and twitter bird plushies and bans DeSantis out of spite.

Only registered members can see post attachments!

DTurtle
Apr 10, 2011


A GIANT PARSNIP posted:

Can Manchin be pointed to as the deciding factor for any vote that was bad for the democrats? I get that it’s easy for people to be pissed at him but as far as I can tell he has never been the deciding vote for the GOP or against the Democrats. It’s actually kinda impressive how well his little song and dance continues to work, and as Manchin himself has pointed out all the mud that progressives throw at him just helps him get re-elected.
Until recently, Manchin didn't really have much of an opportunity to be the deciding vote on. He was elected in the 2010 mid-terms. Those saw the Republicans take control of the House, which made passing any legislation without Republican support extremely unlikely.

Rust Martialis
May 8, 2007

by Fluffdaddy
Happy May Day, comrades.

Give me the pure and the straight,
the men who are steady and strong,
those who have patience and willpower
never in life to go wrong,
and for my great thought will fight to the death,
and never sell out for a song.

Give me the clever, who know I am real,
give me the cool, give me those;
more than for many who say they believe,
my need is for someone who knows.
The promise of love is a message on sand, wiped out by the wind when it blows.

Give me the bitter, the brisk,
whose face is not twisted by fears,
give me the godless, the proud,
untroubled by mystics and seers,
who shall boldly build a heaven here
after their own ideas.

Give me the burning hearts,
who never by doubt are oppressed,
who are never cowed by despondency
and never anxious for rest,
but meet every victory and every defeat unwounded and unsuppressed.

Yes, give me the best from amongst you,
and I shall give you all.
No one can know till victory is mine
how much to us shall fall.
It may be it means we shall save our earth. The best among you are called.

Killer robot
Sep 6, 2010

I was having the most wonderful dream. I think you were in it!
Pillbug

Ither posted:

I don't think this is actually true.

I heard Stephanie Kelton talk on the Majority Report sometime back, and I believe she mentioned taxes.

Yeah, as I've seen it MMT people acknowledge the need to raise taxes when raising spending, just they view it as less directly connected and think debt is a useless metric for gauging when or how much to tax.

Gatts
Jan 2, 2001

Goodnight Moon

Nap Ghost

evilweasel posted:

Modern Monetary Theory seems - as commonly discussed - to veer from trivially true things to wildly incorrect assertions based on misunderstanding those trivially true things. It is much like the laffer curve - it is trivially true that at 0% tax and 100% tax you're probably getting no taxes, and your ideal tax rate is somewhere above 0% and below 100%. That is trivially true and useless. The conclusion drawn from it - lower taxes, get more revenue! - is, as everyone here knows, entirely false.

People who appear to not be economists have seized on modern monetary theory to argue, basically, (1) if a country issues debt denominated in its own currency, that debt doesn't really matter - you can always print more money to satisfy it. Further, that (2) because the sovereign issues currency, taxes and spending aren't really "taking" and "spending" money in the way you envision it, but instead "destroying" and "creating" money.

Combined, these are used to effectively advocate that debts/deficits aren't really relevant.

When MMT is correct, it is basically trivially correct in that it is not wrong, per se. (2) is basically this - sure, you can think of it that way and just by thinking in that way you have not said something technically wrong. It is not, however, a useful way to think about government taxing and spending at all. (1) is in a sense trivially true - yes, a government can inflate its currency to nothingness and thus effectively abolish its debt. But in a more accurate sense, you are effectively saying "you don't have to declare bankruptcy to eliminate your debts! just commit suicide!" It is a fantastically stupid approach. A country can just default on its debt! Just ask Argentina, which does it with such regularity that if you have an Argentinian government bond you are legally considered a sucker. Defaulting on your debt is bad, but it is infinitely better than hyperinflating your own currency to basically (but not technically!) default on your debt - because you get all the downsides of defaulting on your debt AND you have wrecked your ability to issue your own currency for the foreseeable future, at great additional cost to your economy.

How Should You Think About Taxing And Spending Of A Government?

If you want to understand taxing/spending/deficits, a dumb model where you are creating and destroying currency isn't helpful. Instead, eliminate the model and go straight to what is actually happening. A government requires labor and materials. Our government employs hundreds of thousands of people. It has immense amounts of material things procured for it (e.g. road building materials, military hardware, or just plain computers for those hundreds of thousands of workers). That labor and materials comes out of the wider economy. A government must have a mechanism for obtaining it.

That doesn't have to be by money! The government can simply compel labor - for example, the military draft. A government can compel labor in other ways - ancient governments would require forced labor from free people as a form of taxation, or just enslave some portion of the people under its control. It can simply obtain material in kind - for example, medieval kings might just requisition food for their army as they passed through instead of paying for it.

But at the end of the day, the government takes goods and services from the wider economy. Over human history we have learned which methods are better at causing less collateral damage (randomly requisitioning poo poo-tons of goods - not a good method) and/or are more moral (it is, generally, frowned upon to run your government with slaves these days). We have, generally, settled on taxation: citizens pay taxes in money (not goods), and the government uses that money to purchase goods and services in the market like any other market participant. That money can be its own locally-printed currency, or it can be commodity currency (e.g. gold). But at the end of the day, the principal reason we do things this way instead of directly compelling the provision of goods and services is that it works much, much better - people prefer to pay currency than be compelled to labor and you can get specialists, taxing in money instead of taking the goods you need encourages rather than discourages the production of those goods.

But everything the government uses, it has taken from the wider economy. It has done so directly (seizure of the goods it wants, compulsory labor for services) or indirectly (cash taxation, and payment for services and goods), or something in between. At the end of the day, any method of funding a government involves this transfer. You can model it in different ways, but that's the core thing that is occurring. As long as the government is paying for goods and services, the money for that is coming from somewhere.

How Does Our Government Work?

Our government, as everyone knows, taxes people to obtain money, and spends money on goods and services. But our government spends more on goods and services than it takes in in taxes. Where does that excess come from?

In our system, it comes from the holders of US debt. If I buy a government bond, I forego some goods or services I could have, in exchange for a promise I will obtain money from the government in the future to obtain goods and services. The expectation is that this payment (denominated in dollars) will allow me to purchase approximately equal or greater goods and services in the future. Purchase of US government debt is voluntary: it is not a tax (requiring everyone to purchase debt would just be another form of tax).

You pay interest on that debt. How much interest depends on the market for capital. For the past decade+, that interest has been effectively zero or negative because we have been in a demand slump. This is not usually the case: when there is more demand for capital than capital, you will pay higher interest rates.

How Does Taxing and Spending Impact The Economy?

Taxing acts as a drag on the economy. It has to: it's taking goods and services out of the economy (indirectly). Spending, on the other hand, generally acts as a boost to the economy - you are increasing demand for goods and services and offering a profit to provide them.

When you're spending more than you tax, you can be benefiting the economy. If you are taxing more than you are spending, you can be reducing the economy (this can be beneficial when the economy is in a bubble). That's not always true, but it's generally true.

Keynesian economics - the basically correct form of economics - says that over the long term you should borrow money in recessions to benefit the economy, and then overtax and pay that money back in boom times, to deflate the economy. This is because recessions are usually demand-driven - there is less demand for goods and services than the economy could supply, so you create new demand. Further, boom times are also generally demand driven - there is more demand for goods and services than the economy can supply, so you need to reduce that demand (to avoid creating asset bubbles).

Overall, you should not run a deficit because you want to be most efficiently matching the money you take out vs. you put in.

What Are Alternatives To Issuing Debt?

Sometimes a country wants to spend more than it can tax, and it can't or won't issue debt. It can then fund its spending by "seniorage" - printing new money. The government takes in $100 billion, it prints $50 billion, and then spends $150 billion. Where did this additional $50b of goods and services come from?

It came from the only place it can: the wider economy. The government got $150b of goods and services, so in some way it extracted $150b of goods and services. The only question is how.

Generally speaking, it did this by inflation. It made its currency worth less: $1 of currency before the creation of the additional $50b bought you more goods and services than it does today. What you have effectively done is instituted a tax on cash holdings. This is considered a tremendously bad idea, generally speaking, because it is how hyperinflation happens. If the government is simply minting currency to pay its debts, that currency will generally trend rapidly towards being worthless. It's not hard to evade this implicit tax - you just trade your local currency for a different one. A rich person with WeimarBucks sells them and buys dollars, and puts those dollars in a bank account - and thus doesn't pay this tax. But that enhances the drop in value of the currency (many people want to sell it; few people want to buy it) and you get a hyperinflationary spiral.

At the end of a hyperinflationary spiral, you effectively lack the ability to issue a national fiat currency. This is a bad thing, because a national fiat currency does a lot of natural balancing of imports and exports that smooths out the country's business cycle. If your country uses the currency of another nation, that can seriously damage your economy if the economy of that nation doesn't match yours the currency will move the opposite way it should, deepening recessions and inflating asset bubbles.

Now, sometimes - when you are in a recession where demand for goods and services is lower than the economy can supply - you don't cause inflation. Here, you are doing exactly what Keynesian economics suggests you do - you are creating artificial demand. You've just done it through a different method. This unusual case is what has happened since the financial crisis. The Fed has printed a lot of currency and used it to create artificial demand. The key thing here is that the Fed is kept very separate from the rest of the government so that the Fed doesn't get pressured to create money to fund the government - instead, it uses its money creation powers only to balance the economy (and, it is paired with the power to effectively destroy that created money at the appropriate time - something governments operating via seniorage generally do not do). This is all well understood by Keynesian economics and is why the Fed - despite republicans - has taken this course since 2008. It is not something MMT has shown anyone.

What Does Modern Monetary Theory Tell Us?

Nothing.

On debt - yes, you can fund your government, if it issues debt in its own currency, by printing new currency to inflate that debt away to nothingness. You have now effectively defaulted on your debt - that you did not "technically" do so won't matter to anyone. But you also ruined your ability to issue new fiat currency. That was a stupid thing to do as well, because you can just say "guys we're not going to pay our debt, sorry" without wrecking your currency as well. Either way, you're not issuing new debt anytime soon.

What does it tell us about our deficits? Nothing. The MMT answer is basically "it doesn't matter" or "it doesn't matter until it causes inflation". The first is nonsense. The second is trivially true but Kenesian economics already told us that.

MMT appears to be a backlash to Republican economics, which tells us that our deficit means we are spending too much. MMT wants to preserve and enhance our spending, so it says "deficits don't matter".

But does our "structural" deficit (the deficit we run overall, not just today) actually tell us? It tells us that we are spending too much or our taxes are too low. And the actual answer is (b) - our taxes are too low. The deficit should be fixed not by cutting spending, but by increasing taxes.

Republicans believe you can't raise taxes. People advocating MMT appear to have accepted that principle, which is a stupid principle. It is arguing to, essentially, ignore the deficit. But we shouldn't! We've fixed our deficit in my lifetime - when President Clinton raised taxes. We re-created it again in my lifetime - when Bush II cut taxes. We would trivially fix the deficit by returning to Clinton-era tax rates, and have plenty of room to grow spending. There is no reason to accept this stupid republican principle of "never increase taxes" and create a new, stupid, economic theory around it.

People tend to argue MMT in opposition to Republican economics, say republican economics are stupid, therefore MMT is right. Yes, republican economics are stupid. But they're not real economics. Keynesian economics is the gold standard, not the babble of the republican party, and you need to do better than that, not "it is an immutable law of the universe American taxes cannot go up".

We agree our government needs to supply more goods and services than the taxes it raises pay for. We should not solve that by some nonsense about how money isn't real and we're creating and destroying it every second where the conclusion is a laffer-curve esque "we can just have a free lunch!" We should just fix it by raising taxes.

I would like to thank you for this post. I wonder what would happen if I were to share it on facebook...I don't even know why I would bother to do that but sometimes I stare into the abyss and get curious at souless oblivion and the thought of jumping into it apparently....

Goatse James Bond
Mar 28, 2010

If you see me posting please remind me that I have Charlie Work in the reports forum to do instead

Killer robot posted:

Yeah, as I've seen it MMT people acknowledge the need to raise taxes when raising spending, just they view it as less directly connected and think debt is a useless metric for gauging when or how much to tax.

mmt actually also has Some Thoughts on debt, although I don't remember/understand enough of the math to make a guess at how much government spending should be debt-financed

Balance sheet questions aside, he casually dismisses a difference of profound urgency to every non-governmental organization that pays taxes or buys government debt, government debt under MMT is Tax Now Spend Later with some interesting quirks. The dollars still vanish from the economy upon the purchase of government debt, are re-inserted into the economy (created) with government spending, and then are re-inserted again when spent paying the debt. It is not necessarily better or worse than normal Tax Now Spend Later. The taxation and spending are just differently targeted.

The 'taxpayer' is paying up voluntarily (or voluntarily-ish, in the case of financial institutions with a gigantic dragon hoard they need to keep sitting around in dollars) so it's of less redistributive value than proper taxation of the rich but has the efficiency improvements evilweasel touches on. The recipient of 'government spending' is the entity with enough spare dollars to sock them away, which isn't really an ideal recipient of government spending. It's the price you're paying for improved efficiency, guaranteed money-raising without needing IRS enforcement, and also being able to raise that money from some foreign sources.

also US debt and the US dollar are both so gargantuan that abolishing US debt would collapse the world economy, i guess

Goatse James Bond fucked around with this message at 19:17 on May 1, 2021

fool of sound
Oct 10, 2012
Kansas Rep. Mark Samsel arrested for battery after physical altercation with student

You really should read this article, the headline is burying the lede on this guy being completely unhinged

Josef bugman
Nov 17, 2011

Pictured: Poster prepares to celebrate Holy Communion (probablY)

This avatar made possible by a gift from the Religionthread Posters Relief Fund

fool of sound posted:

You really should read this article, the headline is burying the lede on this guy being completely unhinged

What the absurd gently caress.

Wait, re read and found out he's been elected twice. This is seriously unhinged though.

Josef bugman fucked around with this message at 20:00 on May 1, 2021

sit on my Facebook
Jun 20, 2007

ASS GAS OR GRASS
No One Rides for FREE
In the Trumplord Holy Land
My favorite quote:

quote:

“I went to jail for battery. Does that really make me a criminal? Time will tell.”

...yes, it does.

Dapper_Swindler
Feb 14, 2012

Im glad my instant dislike in you has been validated again and again.

fool of sound posted:

Kansas Rep. Mark Samsel arrested for battery after physical altercation with student

You really should read this article, the headline is burying the lede on this guy being completely unhinged

yeah the dudes sounds like he has some real mental health issues or something because holy gently caress.

Veryslightlymad
Jun 3, 2007

I fight with
my brain
and with an
underlying
hatred of the
Erebonian
Noble Faction
I know it's a low content post on my part, and I appreciate the amount of work you've done in the effort post, which is genuinely very informative and gives me some helpful language in breaking down this subject I will shamelessly steal but:

Portion in brackets added by myself

evilweasel posted:

Keynesian economics is the gold standard [of economic theories]

:ironicat:

Can we all take a moment to appreciate the layers of humor in this one tiny statement?
~~~~~~

Fake edit:
Although,

quote:

“I went to jail for battery. Does that really make me a criminal? Time will tell.”
Is pretty drat good, too.

Space Cadet Omoly
Jan 15, 2014

~Groovy~


fool of sound posted:

Kansas Rep. Mark Samsel arrested for battery after physical altercation with student

You really should read this article, the headline is burying the lede on this guy being completely unhinged

Holy loving poo poo, Kansas needs to do a better job of vetting their substitutes because this fucker should have never been allowed within a thousand feet of any school.

TLM3101
Sep 8, 2010



fool of sound posted:

Kansas Rep. Mark Samsel arrested for battery after physical altercation with student

You really should read this article, the headline is burying the lede on this guy being completely unhinged

Did... did he knee someone in the groin because God's supposedly speaking to him?

And he's a State Representative?

What the actual, simmering gently caress is wrong with Kansas?!

Bar Ran Dun
Jan 22, 2006

evilweasel posted:

I should note there might be some merit to MMT in other aspects, like refining Keynesian predictions or the like - just not at all in the way it is used in political discourse.

MMT as a stock and flow model of currency is good and correct.

MMT as magical thinking that means we can spend whatever is garbage. It’s abuse is analogous to the abuse of supply chain modeling. SCOR and DCOR are complicated models that one can use to model s business and optimize. Always reduce inventory wherever possible is a simplification and magical thinking that whoopsie daisy can gently caress over everyone in a crisis. MMT can be simplified and abused in that same way.

Grouchio
Aug 31, 2014

TLM3101 posted:

Did... did he knee someone in the groin because God's supposedly speaking to him?

And he's a State Representative?

What the actual, simmering gently caress is wrong with Kansas?!
It's a flat land where corn and god reigns over it.

Ms Adequate
Oct 30, 2011

Baby even when I'm dead and gone
You will always be my only one, my only one
When the night is calling
No matter who I become
You will always be my only one, my only one, my only one
When the night is calling



Grouchio posted:

It's a flat land where corn and god reigns over it.

Truly, Kansas is Krushchev's Own Country

Zwabu
Aug 7, 2006

Grouchio posted:

It's a flat land where corn and godHe Who Walks Behind The Rows reigns over it.

fixed

Unkempt
May 24, 2003

...perfect spiral, scientists are still figuring it out...

TLM3101 posted:

Did... did he knee someone in the groin because God's supposedly speaking to him?

And he's a State Representative?



Toto, I've a feeling we're back in Kansas again :smith:

a.lo
Sep 12, 2009

Is it appropriate for a state representative to speak to a class of high school students to make babies and procreate

FlamingLiberal
Jan 18, 2009

Would you like to play a game?



I feel like this other message they put in the article was even worse

quote:

In a Snapchat post shared with The Star, Samsel wrote that “it was all planned.”

“Every little bit of it. That’s right. The kids and I planned ALL this to SEND A MESSAGE about art, mental health, teenage suicide, how we treat our educators and one another. To who? Parents. And grandparents. And all of Wellsville,” he posted.

Space Cadet Omoly
Jan 15, 2014

~Groovy~


a.lo posted:

Is it appropriate for a state representative to speak to a class of high school students to make babies and procreate

No, it is also not appropriate for a state representative to knee a high school student in the balls.

Otteration
Jan 4, 2014

I CAN'T SAY PRESIDENT DONALD JOHN TRUMP'S NAME BECAUSE HE'S LIKE THAT GUY FROM HARRY POTTER AND I'M AFRAID I'LL SUMMON HIM. DONALD JOHN TRUMP. YOUR FAVORITE PRESIDENT.
OUR 47TH PRESIDENT AFTER THE ONE WHO SHOWERS WITH HIS DAUGHTER DIES
Grimey Drawer

It's mostly wheat and sunflowers but if you are ever sentenced to drive across the state the flat horizon will do things to your brain.

Remember though that Kansas has moved a bit left lately...can't find a decent link, so any help would be grounds for hugs.

This guy needs help, but we still need a vaccine for the Q brain worms too.

Sanguinia
Jan 1, 2012

~Everybody wants to be a cat~
~Because a cat's the only cat~
~Who knows where its at~

PC LOAD LETTER posted:

They need something like 4-5 extra seats to not only offset Sinema and Manchin but to have a reasonable chance (they'd really need something like 7-9 more seats in the Senate to make it a near sure thing) at also offsetting the other Blue Dogs who'd probably vote it and other Progressive changes like $15 min. wage down.

There is like maaaaybe 1 seat the D's (in PA going by Sabato's map) can get in the Senate in 2022 and the others are all varying degrees of increasingly longer shots. But even a repeat of 2018's very pro D voting probably won't get them another 4-5 seats in the Senate.

And 2022's Senate election map is a class III which is considered a favorable map for D's. 2024's is going to be very favorable for R's though unfortunately so its not reasonable to get your hopes up too high even then.

I think the Dems have an extremely good chance of winning in Wisconsin, I think any map listing that as leaning red is fooling itself, and I think that the Pennsylvania seat is frankly all-but in the bag. The question is if those likely gains are going to be offset by losing Georgia and Arizona, which is less likely than you'd think because Kelly and Warnock, the far more popular of the Dem Senate Pair in each state, are the ones up for re-election. Just getting plus two gets Sinema and Manchin off the board, and while its true that there's other blue dogs besides them, those other blue dogs have been a hell of a lot more quiet any time one of these dumb RADICAL CENTRIST situations comes up. I don't consider them to be irreconcilable impediments to progress the way Sinema and Manchin apparently are, so those two wins are potentially game-changing.

If you somehow manage to get a third in North Carolina, Florida or Ohio against all odds, gravy, but I'm not so sure you need to.

WAR CRIME GIGOLO
Oct 3, 2012

The Hague
tryna get me
for these glutes



wonder what slavery was going on here. all men mostly.

olylifter
Sep 13, 2007

I'm bad with money and you have an avatar!

Space Cadet Omoly posted:

No, it is also not appropriate for a state representative to knee a high school student in the balls.

he wasn't speaking to him in that capacity though, he was working, ostensibly as a substitute teacher, which makes it exponentially worse

haveblue
Aug 15, 2005



Toilet Rascal
In which occupation is it the most appropriate to knee a teenager in the balls? Asking for a friend

GhostofJohnMuir
Aug 14, 2014

anime is not good

haveblue posted:

In which occupation is it the most appropriate to knee a teenager in the balls? Asking for a friend

police

That Old Tree
Jun 24, 2012

nah


Otteration posted:

It's mostly wheat and sunflowers but if you are ever sentenced to drive across the state the flat horizon will do things to your brain.

Remember though that Kansas has moved a bit left lately...can't find a decent link, so any help would be grounds for hugs.

This guy needs help, but we still need a vaccine for the Q brain worms too.

Kicking out the universally hated Brownback and getting a Dem governor is definitely better, but we're still trying to underfund or even cut things because our state remains in the grip of mostly Republican control. They killed a tiny raise for state workers, so we're sitting at over a decade of no raises as better-paying jobs and retirement decimate the state workforce.

Before this dude abused a bunch of students, our scandal-of-the-week was a state senate Republican leader getting smashed and driving the wrong way down the highway chased by police. They wrung their hands about what to do with this loving idiot and eventually revoked his leadership position. Still a member of the senate though!

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PhazonLink
Jul 17, 2010
Probation
Can't post for 20 hours!
didn't some mathematicians and geologists work together to prove that Kansas is flatter than a pancake?

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