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View Diary: Republican shutdown may nix BLS job report. ADP says 166,000 private-sector jobs added in September (11 comments)

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  •  No offense, but the Progressive budget is (2+ / 0-)
    Recommended by:
    Meteor Blades, wsexson

    unworkable long term because it maintains far too small a net contribution of new money by the Govt through the deficit.  Any budget that would be worth implementing would be one that starts with the understanding that there are 3 sectors in any economy: Govt, private domestic and foreign, and the Net outflows of financial assets from one sector must show up as net inflows to another sector.  Therefore, if the Country is running a continuous trade deficit of at least 3% of GDP, if we want our domestic private sector to be accumulating Net financial assets and not losing them, the Govt's contribution must be at least 3% of GDP at a minimum.  And even that is too small to offset private sector savings desire and still maintain enough spending capacity or agggregate demand domestically to achieve and sustain full employment.  Realistically, the Govt's addition of money to the private sector should be at least 6% of GDP per year which is keeping in line with a historical net savings average domestically of at least 3% of GDP per year.  And of course, all of this is dependent on the rate of private money creation through bank debt expansion.  If that continues to slow or even go negative, the Govt contribution will  need to be much bigger.

    Sectoral Financial balances
    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 Wed Oct 02, 2013 at 08:01:14 PM PDT

    [ Parent ]

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