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View Diary: Tea Party is completely wrong about shrinking federal deficits (42 comments)

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  •  The US Govt is not revenue constrained like (0+ / 0-)

    Euro nations.  We have a completely different monetary system then they do.  Whether tax collections by the dollar sovereign are $1 or $10T, the ability of the Federal Govt to create and spend money is always infinite.  Taxes have nothing to do with it and T-bonds are a completely irrelevant way to judge anything in our economy.  T-bonds are financial assets, so if you think we have too many T-bonds, then you also think there is too much non-Govt financial wealth.  Given our current level of Govt spending, taxes are way too high right now to maintain full employment.  However, you are exactly right about infrastructure investment.

    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 Sat Oct 19, 2013 at 01:31:08 PM PDT

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    •  Indeed, I sometimes think (0+ / 0-)

      ...that the more T-bonds, the more invested everyone is in the stability of this nation, and the more diluted any attempt at destabilization by any one player. Is that your thinking, also?

      I think taxes on the wealthy are too low. Unequal societies are unstable and ones with less of a gap between rich and poor are better on nearly every measure of well-being. When our freeway infrastructure was being built in the 1950s, taxes on the top bracket were 91%. This is the time so many harken back to as "the good old days". Just listen to these Teanderthals -- they prattle on and on about how great it was then! (But then, they're dreaming about the social limitations.)

      "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." —John Kenneth Galbraith

      by eyeswideopen on Sat Oct 19, 2013 at 11:03:09 PM PDT

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      •  You know, that concept about getting everyone (1+ / 0-)
        Recommended by:
        eyeswideopen

        more invested in America through T-bonds is a good one.  I've never really though about it quite like that.  I think I might just have to think that over a little more and add it to my personal colloquial repertoire.

        As far as high taxes on the wealthy go, I 100% agree with you about the dangers of income inequality.  As long as we recognize that we don't need to tax the wealthy in order to get the money to spend on the working and middle class.  Thats the situation we find ourselves in now, Dems think the only way to have programs for the rest of us is to raise taxes on people who make a couple hundred grand a year (Not what I would describe as rich).  And since the Cons will never go for it, we never get any other the programs implemented.  We should just implement the programs and worry about the size of the deficit once we get to full employment.

        The 91% tax rate is effectively an income ceiling, which forces businesses and the really wealthy to extract less of an national income share because they would effectively be working to pay the Govt.  I would definitely like to see that bracket go back in place for people making more than $15 or $25 million a year.  Those are the people that do real damage to our society by buying politicians, think tanks, university economics departments and so on.

        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 Oct 20, 2013 at 05:07:21 AM PDT

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        •  Great post. I completely agree. (0+ / 0-)

          Thanks for the dialogue. If you cogitate on that idea of maximal investment and come up with something interesting, please write a diary on it. I'm certainly not well-enough versed on the dismal science to do so, and you are very clear and cogent in your writing.

          By the way, there was a fascinating article in the Oct 15 issue of The New Scientist about how this turmoil was predictable due to population growth outstripping jobs, driving down wages much to the delight of the elites, and then education expanding the number of elites who are far outstripping the rest in gobbling up the available resources, naturally resulting in a vast chasm between the classes. Here's a link but I'm afraid it might not work due to a pay firewall. Fingers crossed!

          "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." —John Kenneth Galbraith

          by eyeswideopen on Sun Oct 20, 2013 at 10:23:16 PM PDT

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