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View Diary: Why are Americans satisfied with economic mediocrity? (30 comments)

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  •  Let me submit to you as an example of (1+ / 0-)
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    psyched

    reveling the entire GOP.  The GOP wants the Govt to extract more money out of the private sector through taxation than it provides through spending.  They seem to hate workers and don't care about the unemployment rate.

    "The Earth is my country and Science my religion" Christiaan Huygens. Please join our Kos group "Money and Public Purpose". The gold standard ended on August 15, 1971, its time we start acting like it.

    by Auburn Parks on Sun Sep 29, 2013 at 11:15:11 AM PDT

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    •  At the top of the diary you referenced "Americans" (0+ / 0-)

      and citing the GOP as an example doesn't work for me.  
      GOP ≠Americans.  A good day for America is a bad day for the GOP and a bad day for America is a good day for the GOP and that rule of thumb is all anyone needs to know about the reason for Republican reveling.

      I wouldn't correlate unemployment with increasing income inequality.  From 1967 to 2012, income inequality has slowly and steadily increased with the majority of it coming after the introduction of the economics known as Voodoo.  Factors like globalization and the devaluation of labor correlate with the problem of ever-increasing income inequality.  Full employment can't solve that problem with a minimum wage falling below the poverty line.  Voodoo has other elements too that tilt the system to the advantage of a privileged few.

      When you get to spending, the debt, and Social Security, I have to pause.  Social Security is funded from payroll taxes and even if spending exceeds revenue these days there's a trust fund holding $2.6 trillion is it in guaranteed government bonds to keep the program funded for a while.

      I don't believe MMT would ignore the revenue from payroll taxes or the trust fund balance but it's Sunday and I'd much rather go for a swim than write more about this.

      There is no existence without doubt.

      by Mark Lippman on Sun Sep 29, 2013 at 11:49:21 AM PDT

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      •  Upon re-reading I want to be clear that the (0+ / 0-)

        Social Security Trust Fund doesn't hold bonds because it was necessary for the government to borrow to pay benefits.  No, it holds bonds because revenue collected from payroll taxes exceeded benefits paid for many years and the surplus was borrowed by the General Fund to pay for other government needs.  This should go without saying but it's hard to say who knows what so I'd rather risk overexplaining.  Now for a swim.

        There is no existence without doubt.

        by Mark Lippman on Sun Sep 29, 2013 at 11:53:39 AM PDT

        [ Parent ]

      •  Mark, your claim needs to account for the (1+ / 0-)
        Recommended by:
        psyched

        very clear correlation between rising median income and increasing employment, and its opposite, the decreasing median income that accompanies high rates of unemployment.  Even if there were no taxes at all, the unemployed labor there is, the less you have to pay for it.  Supply and demand, just like every other market.  So while high tax rates on high incomes (not $250,000 a year like most dems want, since people making that much money have next to no say in corporate governance), over $5 million a year perhaps, would indeed help to circulate more of that money into the hands of the middle and working class, thats not the most important reason for stagnating wages.  If you want wages to go up consistently, we must maintain full employment.  There's no way around that foundational principle.

        Where you get it wrong is by stating that the Govt needs to borrow the surplus payroll tax money.  This is illogical, T-bonds are there for private sector savings, just like CD's and savings accounts are at your local bank.  If the Govt taxes $1 or $10 trillion, the ability of Congress to direct its bank (the Fed) to credit and debit accounts on its spreadsheet is completely unchanged.  You need to get passed the household budget analogy paradigm.  Its illogical to think the Govt must get its tokens from other people before it can create the tokens that only Congress has the Constitutional authority to make.

        MMT = Reality

        "The Earth is my country and Science my religion" Christiaan Huygens. Please join our Kos group "Money and Public Purpose". The gold standard ended on August 15, 1971, its time we start acting like it.

        by Auburn Parks on Sun Sep 29, 2013 at 12:17:38 PM PDT

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