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View Diary: Brinksmanship On the Debt Ceiling (54 comments)

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  •  Wow!! I don't know whether you have this correct (3+ / 0-)
    Recommended by:
    RJDixon74135, Letsgetitdone, psyched

    or not but these ideas definitely merit some discussion.

    I would love to hear some comments from some economic professors and some Fed Officials on this.

    I was brought up to believe that Printing Money like this inevitably ends up in runaway inflation- kind of what we had in the 70's.

    I think the simplest way to end the deficit problem is simply to do three things.

    1) End the Bush Tax Cuts for the Rich immediately. Don wait for the end of 2012 for this to happen

    2) Immediately declare that the standard workweek is reduced from 5 days to 4 days- with no loss in pay, which immediately adds over 25 million taxpaying currently unemployed persons on food stamps and other government subsides to the work force. That's 150 Bn in new annual taxes plus new consumption which will increase exonomic activity and add even more.

    3) Wait a few years for the natural growth of the Economy to raise the denominator of the Debt to GDP ratio back to acceptable levels. In tens years at normal growth the denominator will increase by about 70% and thw whole problem is then gone and we have not risked hyper inflation nor destroyed our already  flimsy safety net.

    •  Another idea (2+ / 0-)
      Recommended by:
      Limelite, psyched

      I don't like your number 2 solution because I don't like sudden, heavy-handed interference in the private market.  I think it would be better for the government to offer a REAL jobs program and eliminate involuntary unemployment.

      As for your 1st part of your solution, I don't like it because it accepts the premise that the debt is a problem in-of-itself.  I like number 3, because that's the real solution.

      Our Dime Understanding the U.S. Budget

      by maddogg on Thu May 12, 2011 at 07:18:15 AM PDT

      [ Parent ]

      •  There's no solution (3+ / 0-)
        Recommended by:
        maddogg, psyched, katiec

        because there's no problem. The problem is the jobs problem.

        As for solution #2 I've always liked that, nit in preference to a Federal Job Guarantee program. We really need that. But working Americans have no shared in productivity gains for almost 40 years now and we work 50% more hours per year than German workers or French workers. lowering the full-time work week to 35 hours would begin to fix the imbalance, which Government policy tolerating high unemployment over the past 40 years has done much to create. In addition to doing this, I'd also immediately increase the basic minimum wage to $10 per hour, with cost-of-living adjustments for SMSAs so that people living in high cost areas might have mini-wages of $16.00 per hour.

        I'm not much worries about interference in the private market for the simple reason that the Government or private monopolists are always interfering in the private market. So, I think the Government should begin interfering in it on the side pf working people for a change.

        •  Well Put (1+ / 0-)
          Recommended by:
          psyched

          I shouldn't use the word "solution" for responses to problems that don't exist.

          Our Dime Understanding the U.S. Budget

          by maddogg on Thu May 12, 2011 at 09:27:12 AM PDT

          [ Parent ]

        •  Gov't should interfere on side of working.... (2+ / 0-)
          Recommended by:
          psyched, Letsgetitdone

          people.

          Wouldn't that be horrible?  Geeze....

          I'm amazed that there are so many people on DKos who still think they need to come to the rescue of markets....  Just so very, very wierd given all that has happened.  Remember the bailouts?  The free money for the markets?  The sacrifice we ALL have made to rescue the markets?

          How much more rescue do the markets need?

          •  Ah, yes . . . (1+ / 0-)
            Recommended by:
            katiec

            I remember it well.

          •  Government regulations (1+ / 0-)
            Recommended by:
            katiec

            I do believe in government regulation.  Let me make sure I'm clear on that.  We certainly don't have enough, or have ineffective regulation on labor, environment, and anti-trust laws.  However, I do believe that regulation needs to be thought out carefully and be focused so as not to have any unintended consequences.

            The specific proposal I was objecting to was limiting the work week to 4 days so that the unemployed could find work.  That would certainly spread the work burden, but wouldn't necessarily improve our lives overall.  There is no need to "spread the wealth" or "spread the burden", MMT offers a way to increase wealth without artificially lowering the labor demand.

            Our Dime Understanding the U.S. Budget

            by maddogg on Thu May 12, 2011 at 11:52:33 AM PDT

            [ Parent ]

            •  I'm still not sure.... (0+ / 0-)

              what to make of MMT, still learning.

              For me, the draw is a new way of looking at things, and feeling that we've outrun the old ways...

            •  I think (1+ / 0-)
              Recommended by:
              maddogg

              reducing the work week is a positive good. Americans out in far more hours than people in other nations and it may be a factor in our lower life expectancy. The problem of making less money in 35 hours can be handled by increasing the mini-wage way beyond where it is today. A family with two workers ought to earn enough to lift people out of poverty.

        •  OT, re: Job Guarantee (2+ / 0-)
          Recommended by:
          psyched, Letsgetitdone

          I mentioned this at Mosler's site, but I came across an article by conservative writer Peter Ferrera, completely out of paradigm on everything except that his idea to reform welfare (on p. 9) sounded rather familiar:
          ...suppose all aid to the able bodied was in the form of an offer to work. Report to your local welfare office before 9 am and you are guaranteed a work assignment somewhere paying the minimum wage for a day’s work. A private job assignment would be the top priority. If you need more money come back tomorrow. If you have children with no one to care for them, bring them with you and they will receive free day care… If you work a minimum number of hours you get a Medicaid voucher that will purchase basic private health insurance. If you work for a continued period establishing a regular work history, you would be eligible for new housing assistance focused on help in purchasing your own home… These workers would continue to receive the EITC and child tax credits…

          The government could even reduce administrative costs to a minimum under this system. There would be no need to maintain and investigate eligibility requirements. If Warren Buffett wants to show up for a work assignment before 9 am, no big deal. Most importantly, this new system would effectively eliminate real poverty in America. Everyone would have a place to go where they could get an assured job and an assured income of $25,000 to $30,000 per year...
          http://webcache.googleusercontent.com/...

          The bit about even Warren Buffet could show up is an important point.  If a billionaire is welcome, presumably any unemployed worker would be as well.  Nixon's term for a guaranteed job, "workfare" (as Richard Nathan suggested, perhaps should be spelled "workfair"), really is the best way to frame it politically.

    •  This is the deficit dove position (2+ / 0-)
      Recommended by:
      psyched, katiec

      However, there is no deficit problem. It's a product of false economic theories, including the theories underlying deficit dovism. See here and here.

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