simple solutions to trivial dilemmas...,
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well, that's one way of putting it...,
it's crazy, but it just might "work":
I've been joking for a while that we'd seriously be better off with some wingnut Republican President because since Ford -- and Nixon wasn't all that shy either -- they've done nothing but run huge deficits. They always find some bullshit excuse to ignore the smell of their own shit and blow it out the top, and at this point it's probably more important to run large deficits than, well, insert any remaining pet cause they might actually be worse on than Obama.
So I enjoyed reading this from Keith Newman:
[Modern Monetary Theory, neo-chartalism] is not just theoretical. In effect its greatest practitioner, without admitting to it, has been the Republican Party in the U.S., but only when in power: it cuts taxes to the wealthy and increases spending on prisons, the military, and war, and lets the deficit increase. And it works.
A Democratic President in thrall to Wall Street combined with an intransigent GOP congress is about the worst possible fiscal combination we could have. I'm pretty sure it's worse for financial reform, too, which is more important for anybody who still has a job, but carrying on about that seems greedy when there are tens of millions of people who need income. I prefer moochers and welfare queens to those embroiled in counterproductive toil, so I hesitate to say they "need work". Democratic congress, Republican white house, is the order of the election. It won't do anything to stop our conversion into a banana republic, to the extent that there's anything left to convert, but hey, the republic was doomed anyway.
Which brings us to a complaint: nothing I've read from the chartalists addresses what an Austrian would call the misallocation of capital or a Keynesian would call who knows what, the "animal spirits" of government directed unutilized resources, perhaps. They have their individual preferences, of course, but the theory seems neither here nor there. Yes, you could put everybody back to work building more houses than we know what to do with and bombing sand into glass like W. did, but what are we going to do with the extra houses and surplus glass? Where are we going to hide the bodies? And the answer springs forth: we will hide the bodies in glass houses.
update: Ah, it is made explicit, Bill Mitchell:
The reality is that whatever the government does (using its opportunities) – big or small, surplus or deficit, whatever – will have implications for what the non-government sector does. If they run surpluses then the non-government sector runs deficits. We have to get down to that level of understanding and acceptance before we can discuss other matters that might reflect our values.
When they talk about financial assets I have to keep reminding myself that they're not talking about real assets, or real liabilities compared to financial liabilities. They're not talking about the market value of the collateral, or the inflation adjusted value of the debt instrument. Fair enough, but can't net financial liabilities be created when you're keeping the books in an ocean of fraud?