Defizita: marmarka, etengabe

Hasierarako, Ikus Defizita, marmarka, desafioa eta erantzunak


(i) Mike Norman-ek segitzen du marmarka:

(a) Guest post: MMTers need to think about how to merge monetary and fiscal policy

(b) No more talk and lecturing. I’m using MMT to make money now. That’s the best revenge!

(c) And then Mosler shows up

(d) Going around telling people the deficit is too small is a non starter

(e) My friend calls and asks, “Mike, whaddya think now?” Here’s what I said…

(f) Time to ask ourselves, why hasn’t MMT caught on?

(g) Federal deficit is going up again. Up $40 billion versus last year.

(h) Who made this call? I did!

(i) The deficit is now $73 billion larger than last year and growing.

(j) Deficit is up 25% over last year, as I forecast. Will the “deficit is too small crowd” now change their position?

Tom Hickey said…
I’d assume they would say that it is still not big enough Mike….

If there is underemployment, the deficit is not big enough, as I understand it.

Marriner Eccles said that 90% stimulus doesn’t cut it in ending a crisis.

Charles Hayden said…

Mosler doesn’t predict the stock market; he’s about full employment and price stability.

And a note: in 2010 he was telling us all there would not be a second crash or double dip because the deficit was still over 10% of GDP.

Gary Hart said…
Somebody correct me but from what I understand from Bill Mitchell the deficit should not be compared to GDP, but should be large enough to quell unemployment.

MRW said…
Flows have been very, very, strong.

Then why is economic growth (according to the U.S. Bureau of Economic Analysis*) only 1.1%, when the average from 1947 to 2016 was 3.22%? Why are 94 million Americans underemployed or unemployed? Why are 45 million still on food stamps?

Who is benefiting from these flows? Just traders? Just Wall Street?

These are sincere, serious, questions. I am not asking them to be an asshole or smart-ass. I would really like to be enlightened, if possible. The deficit is just the difference between govt spending and taxes collected. An accounting measurement that recognizes the level of congressional spending and exercise of fiscal policy, the latter a phantom of times past. I really don’t see the contradiction that you claim makes Mosler wrong.

Steve D said…
@ MRW -“I really don’t see the contradiction that you claim makes Mosler wrong.”

Mosler consistently says borrowing to spend (to grow output) can come from any combination of the indebtedness of the public/private sectors. So yeah, the deficit remains too small.

Mr. Norman’s nit-picking (by assuming that Mosler strictly means the public “deficit is too small”) is Mike’s go-to recourse to assuage his own ego. Therefore, no dogma-free economics on MNE.

The financial economy always trumps the real economy.

Over 2 million have left SNAP roles since 2014, making the total today closer to 42m.

(ii) Eta marmarka gehiago

Deficit is the highest in 6 years. Where are all the MMT gods??


The deficit is now $766 bln, the highest in 6 years and the highest in 5 years as a %  of GDP. Where are all the MMT gods touting this as bullish? Mosler‘s still bearish. He’s been bearish for 4 years. Missed the entire rally.

Kelton? Still criticizing Trump.

Federal Deficit

Federal deficit

BTW…at Mike Norman Economics we look at FLOWS. It gave us the bullish signal a long time ago.

Ryan Harris said…

MMT is a useful economic model, seems like once Wray left and Mosler retired the remaining people became more interested in using the model as a means to promote political careers than the political economics itself.

Too bad in a way for the MMT analysis that gets bandied about like Mosler or Kelton clearly doesn’t go very deep any more — missing all the interesting things.

finaslegendarystories said…

well said RH…many questions re: MMT today (lack of good paying blue collar jobs, and resulting increased consumer debt) go unanswered, including my questions on Twitter responding to Aussie Prof. Bill Mitchell…is anybody paying attention, with exception of Mike Norman? But, WTF do I know, so I follow Ocasio-Cortez for entertainment purposes…

lastgreek said…

How much of this “deficit” was used in the public (Tom, Dick and Harriet…) interest?

lastgreek said…

Stephanie Kelton, Stony Brook University professor of public policy and economics, discusses the impact of U.S. tax cuts and infrastructure spending on employment and the economy with Bloomberg’s Joe Weisenthal on “What’d You Miss.”

(Source: Bloomberg)

Ralph Musgrave said…

The basic MMT position is that the size of the deficit doesn’t matter as long as the economy has spare capacity, i.e. as long as the deficit does not exacerbate inflation too much. In contrast, when the economy IS NEAR or at capacity, a country needs to be careful on the size of the deficit. In particular if it has an independent central bank, the CB will simply negate what it sees as an excessive deficit with interest rate rises. To judge by Kelton’s pronouncements, it’s not entirely clear to me that she gets that point, though I could be wrong there.

Matt Franko said…

Oh no now more bad news:

“Gross domestic product, the value of every good and service produced domestically, rose at an annual rate of 4.2%, the Commerce Department said, revised up from 4.1% in the advance estimate. It remained the fastest pace of growth in nearly four years.”

This really sucks…

Nahikoa eta sobera, behin eta berriz, sasi-eztabaida berbera!

Berriz: Why are 94 million Americans underemployed or unemployed?

2 erantzun “Defizita: marmarka, etengabe” bidalketan

  1. Defizita: marmarka, berriz
    Deficit balloons to $980 bln. Where are all the MMT gods cheering this??
    A giant end-of-month spending spree in August has ballooned the Federal defiicit to $980 bln and 4.8% of GDP.

    This is the largest nominal deficit since 2009 and the largest as a percentage of GDP since 2012.

    The MMT gods should be cheering this. They’re not. Weird.

    myxzptlk said…

    If my understanding is correct, MMT doesn’t argue that every deficit is good. It argues that deficits that promote growth and don’t undermine economic confidence are good. So I would expect Stephanie Kelton et al to cheer current deficit spending only to the extent that it bolsters economic confidence. Clearly, market reactions to Trump’s tariffs (even if their impacts are small) are undermining economic confidence. It’s the psychological impact, not the economic impact, that matters.
    September 9, 2018

    Detroit Dan said…
    Right. Plus MMTers are clear that deficits which increase income inequality (as from the recent tax cuts) may not provide much of a boost to the economy as most additional income is simple reinvested in existing financial assets, driving their prices up but not increasing consumption or real investment.Eventually asset prices realign with underlying consumption and that will be negative. So not a good deficit on balance.
    September 9, 2018


    Ralph Musgrave said…
    MMTers aren’t celebrating the current large deficit because large deficits are not needed when the economy is at or near capacity, which is where it is now. In fact when THERE ARE large deficits in that scenario, the Fed has to counteract the resultant excess demand with interest rate rises, which all told is a fatuous exercise. I.e. what’s the point in creating and spending so much new base money into the economy that the state (i.e. government and central bank) then has to borrow some of it back to curb demand? The only net effect is an entirely artificial rise in interest rates.

    That all supports the point made by Warren Mosler, Bill Mitchell and others that enough base money should be created to keep the economy at capacity, but not so much that government then has to borrow some of it back. I.e. the state should pay no interest to anyone (unless there are particularly good reasons for government borrowing, and I don’t know what they are). I.e. Mosler’s “permanent zero interest rate” policy looks to me like being correct.
    September 10, 2018

    Michael Norman said…

    I compile this from data from the Daily Treasury Statement, which I analyze DAILY. The Treasury will post these figures later this month. My work is ahead of theirs.

    You can use my charts. They are correct.
    September 10

    Chewitup said…
    I don’t think we’re near capacity at all. Labor participation and job security are too low. We are still in supply side mode. Trickle down takes a long time to create warmth. Especially when so much of the deficit is spent on defense.
    As to why the mainstream MMTers are not citing the deficit- they are all Democrats. (Mike and Matt do not count). The best you can get is Stephanie Kelton admonishing Nancy Pelosi for her paygo policy.
    September 10

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