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View Diary: Austerity isn't dead... but it should be (132 comments)

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  •  Can kicking (0+ / 0-)

    Austerity isn't for fun or as a "way to transfer wealth to the rich", it's there to curb budget deficits so that nations live on what they make.

    If you are unable to run a balanced budget, stopping your austerity program will feel good in the short term but will be paid for eventually, all the time.

    And secular employment trends will continue regardless, since the government can't stop private industry from designing and fielding more and better machines to displace more manual or semi-skilled work.

    Economic policies must take these realities into account.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Sun Apr 28, 2013 at 08:40:51 AM PDT

    •  complete nonsense. (15+ / 0-)

      The Govt is the currency issuer, the US dollar is not a commodity, it is a simple public monopoly and utility.  There is absolutely no connection to household budgets and the Federal Govt.  A growing economy needs a growing money supply otherwise deflation is the result.  Deficit spending is the best way to grow th emoney supply because it is not associated with a liability from the perspective of the private sector like bank created money.  You are operating out of paradigm....the gold standard has been over for 40 years....its time to accept the reality of our fiat monetary system.  You may wish it still worked like it used to but the undeniable reality is that it doesn't

      MMT =Reality
      neweconomicperspectives.org

      "The Earth is my country and Science my religion" Christiaan Huygens

      by Auburn Parks on Sun Apr 28, 2013 at 08:47:31 AM PDT

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    •  Government is not a business (17+ / 0-)

      And trying to run it like one isn't good for government, or business.

      •  Government is not a boundless cornucopia either. (2+ / 0-)
        Recommended by:
        Sparhawk, soros

        Trying to make sure that what goes in one end of the horn of plenty is roughly equal to what comes out the other end, except in times of war or severe economic distress, would seem to be a reasonable expectation of the taxed, wouldn't it?  

        The patellar reflex is a deep tendon reflex which allows one to keep one's balance with little effort or conscious thought.

        by SpamNunn on Sun Apr 28, 2013 at 08:55:38 AM PDT

        [ Parent ]

        •  No (3+ / 0-)
          Recommended by:
          ozsea1, limpidglass, Eric Nelson

          That is a completely false comparison.

          "I'll believe that corporations are people when I see Rick Perry execute one."

          by bink on Sun Apr 28, 2013 at 08:59:35 AM PDT

          [ Parent ]

          •  I didn't make a comparison. (2+ / 0-)
            Recommended by:
            Sparhawk, soros

            You can't make a serious comparison of something that's real to something that's imaginary.  

            The patellar reflex is a deep tendon reflex which allows one to keep one's balance with little effort or conscious thought.

            by SpamNunn on Sun Apr 28, 2013 at 09:03:26 AM PDT

            [ Parent ]

            •  And is that not a reasonable expectation, at least (0+ / 0-)

              for people who pay the taxes?

              The patellar reflex is a deep tendon reflex which allows one to keep one's balance with little effort or conscious thought.

              by SpamNunn on Sun Apr 28, 2013 at 09:04:39 AM PDT

              [ Parent ]

              •  The Comparison Was to a Cornucopia (6+ / 0-)

                In the negative ...

                It's not like that.

                An economy is a system of exchange. Money is tokens that allow participants to exchange goods and services.

                We grant government a monopoly on the production of the tokens -- not just to ensure their integrity, but to ensure that the hand of democracy controls the amount of tokens in circulation. We further grant the government power to confiscate and redistribute tokens for the greater good.

                When government borrows tokens from participants in the economy, or confiscates them through taxation, it's merely playing the game of adjusting the amount of money in circulation, or redistributing it according to the aims of its policy.

                In fact, no taxation at all is really required by the government, nor borrowing. The Republican Party could have its dream -- and government could simply print all the money it needs and spend it into the economy annually.

                This, however, would make it difficult for the population to sustain the illusion that money means something in and of itself -- and would erode confidence in it as an instrument.

                This is an entirely different game than a household or business budget, which is subject to a money supply that is created and managed by a second entity.

                The project of government when managing money is not to "keep budgets under control." That is high absurdity. The project of government is to manage the size of the money supply and its distribution in such a way that benefits the largest number of people participating in the economy.

                What we have now is a concerted effort by government to create a shortage of money ... in the interest of protecting its value for the few that have much of it. A consequence of this is high unemployment and economic stagnation.

                This is directly related to -- in fact a product of -- the unwillingness of the government to either run the printing presses or sufficiently confiscate money from the horders.

                "I'll believe that corporations are people when I see Rick Perry execute one."

                by bink on Sun Apr 28, 2013 at 09:14:26 AM PDT

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                •  I'm guessing you don't think it makes much (0+ / 0-)

                  difference whose hand is on the throttle of the mighty machine that controls the flow of tokens, then.  

                  We might agree more than I first suspected.  

                  The patellar reflex is a deep tendon reflex which allows one to keep one's balance with little effort or conscious thought.

                  by SpamNunn on Sun Apr 28, 2013 at 09:19:57 AM PDT

                  [ Parent ]

                  •  I Guess I Believe It Matters (6+ / 0-)

                    Since, in a democracy, the people are supposed to have their hands on the throttle and, implicitly, the beneficiaries are supposed to be the largest number among them.

                    Our constitution speaks of "general welfare" not "private gain."

                    "I'll believe that corporations are people when I see Rick Perry execute one."

                    by bink on Sun Apr 28, 2013 at 09:21:53 AM PDT

                    [ Parent ]

                  •  I'm guessing you don't know jack (3+ / 0-)
                    Recommended by:
                    Auburn Parks, tardis10, emal

                    about sovereign currency and MMT, do you?

                    Yes, deficits do matter; there, I've said it.

                    But nowhere near to the extent that you and your fellow (redacted) Sparrowhawk imagine it is......

                    The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

                    by ozsea1 on Sun Apr 28, 2013 at 10:21:18 AM PDT

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                    •  Sovereign currency and Modern Monetary Theory.... (0+ / 0-)

                      ...are fraud and hucksterism dressed up as legit economic theories.

                      All that matters is: what physical good or service do you produce? Is the rest if the world willing to pay the price you charge?

                      Money is just a way of keeping score. The real value is the goods and services being transacted. You have to provide real value of goods and services in exchange for whatever you import. A budget deficit means you aren't doing that. To fix the problem you either have to produce more real stuff or cut your imports.

                      (-5.50,-6.67): Left Libertarian
                      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                      by Sparhawk on Sun Apr 28, 2013 at 11:32:45 AM PDT

                      [ Parent ]

                      •  were it as simple as you assert it is.... (0+ / 0-)

                        but's it's not, and your economic thinking just can't handle the historical reality.

                        Ask yourself this, if you want to learn, instead of offering your brand of "fraud and hucksterism dressed up as legit economic theories."

                        How are public debt and private assets connected? Hint: double entry accounting.

                        Why is the trade deficit important to public debt of which you are so obsessed? Same hint.

                        Decoupling our sovereign currency from the gold standard changed the game so that the rightwing/libertarian meme of comparing the federal budget to a household budget is invalidated. Explain. Show your work.

                        Finally, our buddy and pal (The) Dick Cheney simply stated - for simple minds - that deficits don't matter.

                        Likely he knew things that you clearly do not.

                        The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

                        by ozsea1 on Sun Apr 28, 2013 at 12:23:45 PM PDT

                        [ Parent ]

                •  Hey Bink, I really like your description (3+ / 0-)
                  Recommended by:
                  bink, 3goldens, ozsea1

                  you do a really a good job of laying it out here.  

                  "The Earth is my country and Science my religion" Christiaan Huygens

                  by Auburn Parks on Sun Apr 28, 2013 at 10:38:54 AM PDT

                  [ Parent ]

        •  What's changed isn't just the tax rate. (4+ / 0-)
          Recommended by:
          tardis10, eps62, lostinamerica, ozsea1

          It's what the wealthy have allowed to declare as their fare share of the profits in the first place. Take the exorbitant increase of that and then sharp reduction of taxes, and you have a marketplace designed to fail. Not to mention a broad range of inflamed social ills.

          The rich operate as if they are islands and the Second Law of Thermodynamics does not exist. And their supporters are equally blind.

          Frankly, I'd rather take down Exxon or Goldman Sachs, the way we're taking down RushBeckistan, than elect another "better" Democrat who's going to wind up singing for the bankster choir.

          by Words In Action on Sun Apr 28, 2013 at 09:04:19 AM PDT

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        •  Severe economic distress (4+ / 0-)

          We're having that now.

          Some of the long-term unemployed may never be able to get back in the job market.

          Freedom isn't free. Patriots pay taxes.

          by Dogs are fuzzy on Sun Apr 28, 2013 at 09:36:09 AM PDT

          [ Parent ]

          •  Many will not. And most of the long-term (2+ / 0-)
            Recommended by:
            ozsea1, 3goldens

            unemployed who do re-enter the market will do so for permanently reduced earnings.

            The destructiveness of austerity the financial collapse, the immediate failure to deal with it alone will last a generation or more. Adding austerity simply extend the destruction further in time and space.

            Frankly, I'd rather take down Exxon or Goldman Sachs, the way we're taking down RushBeckistan, than elect another "better" Democrat who's going to wind up singing for the bankster choir.

            by Words In Action on Sun Apr 28, 2013 at 09:41:51 AM PDT

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    •  And we can bet that the private sector won't (3+ / 0-)

      anticipate or humanely address the impact of "fielding more and better machines to displace more manual or semi-skilled work," because there are no ethics or morals built into the market.

      That's why government must address these and other market issues by imposing a Mixed Economy, because private interests will not. Strong regulations and enforcement are needed to mitigate inevitable legal and illegal exploitation of resources, human and otherwise.

      Frankly, I'd rather take down Exxon or Goldman Sachs, the way we're taking down RushBeckistan, than elect another "better" Democrat who's going to wind up singing for the bankster choir.

      by Words In Action on Sun Apr 28, 2013 at 09:01:24 AM PDT

      [ Parent ]

    •  Ah yes, the good ole' Household Budget analogy. (14+ / 0-)

      Ma and Pa Kettle don't need to know no macro, it's all right there on the kitchen table. Send Pa to Washington, he'll straighten 'em out.

      The free market is not the solution, the free market is the problem.

      by Azazello on Sun Apr 28, 2013 at 09:09:04 AM PDT

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    •  There's a time for budget surpluses (8+ / 0-)

      That time is when the economy is booming.

      Freedom isn't free. Patriots pay taxes.

      by Dogs are fuzzy on Sun Apr 28, 2013 at 09:24:36 AM PDT

      [ Parent ]

      •  And we are starting to see inflation. The budget (0+ / 0-)

        should never be balanced or in surplus because the Govt needs its own currency from the citizenry.  The only reason would be to slow down aggregate demand because inflation is becoming a problem due to capacity being maxed out..........what a great problem that would be to have!

         "we need to slow down demand because there is so much output and employment we just can keep up!"
        (assuming of course the output growth isn't based on a financial asset bubble like the Clinton and Bush years)

        "The Earth is my country and Science my religion" Christiaan Huygens

        by Auburn Parks on Sun Apr 28, 2013 at 10:50:22 AM PDT

        [ Parent ]

        •  "Starting to see"? (0+ / 0-)

          Inflation has been with us this whole time, other than in housing prices. Compare the cost of a loaf of bread and a gallon of milk over the last 5 years, let alone 10 or more . . .
          They do not care about curbing inflation in the least, for those of us who have to budget our money for the essentials.

          "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

          by bryduck on Mon Apr 29, 2013 at 09:03:41 AM PDT

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    •  Rubbish - creates a false equivalence between (4+ / 0-)

      the budget of a household (which must live on what it makes and borrows) and a sovereign government (which may find deficit spending necessary to maintain a given level of GDP when other components of the macroeconomic equation have cut spending).

    •  Austerity isn't for fun, no. (3+ / 0-)
      Recommended by:
      3goldens, tardis10, Mark Sumner

      It's there for the purpose of transferring ever-higher piles of money from the poor to the rich, until the poor have nothing....and the rich are wondering why there's a revolution going on.

      "Violence never requires translation, but it often causes deafness." - Bareesh the Hutt.

      by Australian2 on Sun Apr 28, 2013 at 10:14:30 AM PDT

      [ Parent ]

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