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View Diary: WH Advisor David Plouffe and Goldman Sachs CEO Agree That Medicare and Medicaid Must be Cut (614 comments)

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  •  The biggest drivers of our deficit is the tax code (5+ / 0-)

    Government spends X. Government needs to raise X. If government raises less than X it should raise revenues until it gets to X. Unless there is a recession of depression. Which there was not until December 2007. We need to pay off the debt and reduce the deficit. But the way to do that is to raise taxes.

    •  We create/issue our own currency (12+ / 0-)

      It's created by a keystroke at the fed before being printed out The government is not revenue constrained.

      So no we don't need to reduce the deficit and the biggest reason for the deficits are the recession.

      I don't negotiate grand bargains with deficit terrorists!

      by priceman on Wed Nov 28, 2012 at 10:35:15 AM PST

      [ Parent ]

      •  If we create our own currency then why do we (2+ / 0-)
        Recommended by:
        Mr Robert, NoMoreLies

        need China to buy it? Why do we sell our debt to other countries if it does not really exist. I am not a bond vigilante but I recognize that we have to pay our bills. If you point is accurate then why do we not give every American enough money to live well on through our fiat currency. After all if the size of the deficit does not matter lets give everyone a great lifestyle.

        You confuse our currency with the value of the economy. And right now the government takes up too big a chunk of our economy. The wealthy have too much money. And the best way to solve that problem is to tax them into compliance. The imbalance between rich and poor is dangerously high. So if you tax the rich the gap shrinks. And if you restore finance to less than 5% of the economy rather than the 10% + it is now more uselessful things can be done.

        So who raise taxes on is more important than raising taxes.

        •  Our trade deficit is where we mostly owe China (7+ / 0-)

          which we would owe them anyway even without China buying a dimes's worth of treasuries, butthe majority of our debt is held by us, but we don't need China to buy it, but they do because they sell us things to get dollar reserves that they need because they have a currency board to spend on par with dollars. We don't.

          We have to pay the payments as they come due, but we never have to pay down the entire debt and we create money to pay the debt because the debts are in our own currency and no I'm not confused whatsoever about hwo our money system works. You are and i say that will no disrespect; a lot of people are, because it's Orthodox nonsense, but we are not on the gold standard anymore, therefore we don't need to dig up gold to put in banks reserves here or ship them abroad.

          Progressive taxation is good for income inequality and I'm all for it but that is the reason to tax the rich, not to pay down the debt.

          If you point is accurate then why do we not give every American enough money to live well on through our fiat currency. After all if the size of the deficit does not matter lets give everyone a great lifestyle.
          That's not what I or MMT says. We can spend until everyone has a job, but spending past that point will drive up prices and there is your constraint.

          I don't negotiate grand bargains with deficit terrorists!

          by priceman on Wed Nov 28, 2012 at 12:29:29 PM PST

          [ Parent ]

        •  The reason why they don't just (1+ / 0-)
          Recommended by:
          Brian B

          print money and eliminate all debt and just give people money is that some things still need to be done in this country. Their problem would be how to motivate people to work, at a minimum. But most importantly it would destroy the power structure of this country which has been in the hands of a very small number of clans since even before there was a United States.

          The money supply is currency plus debt (spends like money but not for you or I). The government could simply print the total outstanding debt (yours, mine, everyone's - including the government's) tomorrow and have a money supply of all currency and no debt. This does not change the total money supply in any way as it exactly the same amount as it was before. No inflation.

          •  But what impact does that have on the real (0+ / 0-)

            economy? You know the one where real people have jobs and make and sell stuff other people need. Having a budget this deeply in the red has made it impossible for any kind of real concerted effort to spend on public works or job programs. The right wing was great with deficits until people started to suffer then all of a sudden the right was worried about deficits. That worry has prevented the government from doing more to fight the recession and more importantly get people back to work.

            There was no excuse, moral, economic, or otherwise to have run up the debts during the Bush years. And the existence of those debts makes it politically impossible to do the things we know we need to do to fix these problems.

            Debt spending today - good but impossible. Debt spending yesterday - bad and popular. Plus foolish. But we must address that debt before we get the political support to fix things.

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