Be a production equipment sponsor for Real Fiscal Responsibility Today

We have decided to offer sponsorship opportunites to individuals or organziations who wish to be equipment sponsors for Real Fiscal Responsibility Today. We have established an Amazon Wish List for Real Fiscal Responsibility Today.

We plan to make six pilot shows for YouTube and use them as a marketing tool. Production equipment sponsors will recieve acknowledgement in the program credits as will as links from the Real Fiscal Responsibility Today site. This will be true for both the pilot series and when we launch the show with whichever station picks it up.

This program promises to have an international and influential audience. This is a chance to raise your or your organization’s profile and bring it to the notice to the economic elite. If you have any questions about becoming an production equipment sponsor, contact me at marshall AT prestovivace DOT biz.

Real Fiscal Responsibility Today, progress to date, looking forward

As of this post we have raised $3,650 from 44 donors. With an average of $83 per donor, we will need 317 new donors within the next five days in order to make our original goal. These kinds of fundraisers often have spurts in the final days of a campaign and with your help we can meet our goal.

Even if we do not make our original goal we have made great progress. As of this posting we have sufficient funds for a single pilot, This is a major achievement, and we are grateful to all those who made it possible. We still hope to raise enough to make all six pilots, as this will help us demonstrate an audience for our show.

This effort has generated new interest in Modern Monetary Theory generally and in our project in particular. Because of this public show of interest, we have the possibility or raising the balance from other sources. This is why each new donor is so important. At this point the number of donors we have is more important than the amount given, because the number of donors shows public interest. Of course, if you are in a position to give a significant amount of money, we have some nice perks for you.

Please help us launch Real Fiscal Responsibility Today!

How Real Fiscal Responsibility Today is changing the dialog

Recently Pavlina Tcherneva and Stephanie Kelton have been in the news. Warren Mosler Marshall Auerback have been interviewed on Boom Bust. It could be argued that all of these economists are news makers, and have been in the news before. Certainly they have all been in the news before, but never so many at the same time, never in so many publications, and never so prominently. So why now?

I put it to you that our fundraising effort for Real Fiscal Responsibility Today has demonstrated the popular appeal of Modern Monetary Theory. For weeks Twitter has been full of links from our supporters, and it has made a difference. Reporters love Twitter. Weeks of supporting tweets have had their effect, reporters and editors are paying attention to MMT economists in a way they have not before. Imagine what would happen if there were a weekly talk show! Help us make that happen, donate to Real Fiscal Responsibility Today!

How the Platinum Coin saved America and the Global Financial System

This time last year we were looking at the real possibility that the Republican controlled House of Representatives would refuse to raise the debt ceiling and force the US to default on its obligations. Had the Republicans succeeded in their purpose there would have been an unimaginable financial catastrophe.

Who would want such a thing? We only have to look at Greece and Detroit for the answer. The United States would have been forced to repudiate obligations to those too politically weak to defend their interests and sell off assets at fire sale prices to those politically strong enough to collect. No doubt that is what the plutocrats backing Ted Cruz had in mind when they put him up to it.

So what stopped it? In my never was humble opinion it was the platinum coin option. Matthew Yglesias gives us the short version:

It all goes back to sub-section (k) of 31 USC § 5112 “Denominations, Specification, and Design of Coins.” The opening subsections consists of boring specifications about the coins the United States issues. Subsection (k) says “The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”

So there it is in black and white. Geithner can have the Mint create a $1 trillion coin. Then he can walk it over to the Federal Reserve and deposit it in the Treasury’s account. Then the government can keep sending out the checks—to soldiers and military contractors, to Social Security recipients and doctors who treat Medicare patients, to poor families getting SNAP and to FBI agents—it’s required by law to send—and the checks will clear. It’s a simple, elegant solution.

It all began with a comment on Brad DeLong’s blog from Beowulf, Joe Firestone took the idea and ran with it. With discussion centered at CorrenteWire, it spread across the Internet with the deepening of the fiscal/political crisis of threatened default. The platinum coin meme crested with a burst of #mintthecoin posts on Twitter. I came up with the idea of the #mintthecoin hashtag on an MMT Googlegroup, and Stephanie Kelton was the first to post it. From their the idea went into the mainstream press with even Krugman endorsing the idea to avert a default.

Presently we have no discussion of a default. Mitch McConnell has promised a government shut down if the Republicans take the Senate; but there is no talk of default. The platinum coin has made the threat to refuse to raise the debt ceiling an empty threat. This is what simple blogging has done. Imagine if we had a larger platform from which to speak. Imagine what we could do if week after week we could expose the hollow news-speak of our times. Help us do that, help us launch Real Fiscal Responsibility Today.

Modern Monetary Theory and the Overton Window

The Overton Window, Illustrated

Definition and discussion of the concept is below. The main points I want to convey with this image:

- There is, or there should be, a constant tug-of-war on the edges of the Overton Window on any issue.

- There is a place for everyone and anyone along the Left side of the rope, as long as we’re all pulling in the same general direction.

- The current location of the Overton Window is so far to the right of any objective political spectrum, that what are now considered Extreme Left Positions are really not extreme at all.

Our current political discourse is distorted by the false doctrine that some sort of purpose could be served by balancing the federal budget. Nothing could be further from the truth. In a country with a fiat currency, whose debts are payable in its own currency, there is no purpose in a balanced budget. Once ordinary citizens understand this, the public policy opportunities are dramatically shifted in favor of the people.

So how do we educate the public about fiat currencies? How do we open up the discussion? by creating a talk show where these issues will be examined story by story, week by week. Help us do it, help us launch Real Fiscal Responsibility.

Pavlina Tcherneva’s chart

The Richest…

Everyone is talking about this chart, the New York Times, the Washington Post, everyone. Because this chart makes clear what many of us have been saying, that workers no longer receive a fair share of the wealth they create and that inequality is reaching crisis proportions.

This marks another triumph for Tcherneva and Modern Monetary Theory in breaking through to the mainstream. But to penetrate the popular consciousness, to shift the debate in favor of ordinary people, we need both repetition and explanation. We need an economics talk show that will highlight work such as this on a weekly basis, so that the public is presented with a sustained examination of economic phenomenon from a Modern Monetary Theory point of view. Help us do it, help us launch Real Fiscal Reality Today.

The lapdogs who do not bark

You might have expected after the revelations about regulatory capture of the Federal Reserve by Goldman Sachs our news industry would be ablaze with nothing else. Carmen Segarra’s interview with This American Life is riveting, and the ProPublica report concerning the secret tapes she made of Federal Reserve meetings is gripping.

So what happened? Why isn’t our press all over this story? I can only guess at the combined pressure of Goldman Sachs, the Federal Reserve, and the White House to kill this story, but in an earlier era it would have availed them naught. Public interest would have overwhelmed everything else. But in today’s press culture compelling stories like this are over looked for war mongering and what can only be described as bilge.

Our talk show Real Fiscal Responsibility Today will deal mainly with Modern Monetary Theory; but we will also be discussing the culture of corruption. We will be inviting whistle blowers like Segarra to appear on our show along with long time corruption fighters like Bill Black. Help us shine a light on the vampire squid. Help us launch Real Fiscal Responsibility Today.

Our dumb discourse

Oh fergawdsakes

by digby

The question is do the soccer moms eat chicken and NASCAR dads drink coffee? At the same time? Only our punditocracy can sort it out for us and tell us what it all means:

“Meet the Press” host Chuck Todd on Sunday described the 2014 midterm elections as a battle between “Starbucks nation” and “Chick-Fil-A country.”

He split the U.S. into the Democratic urban areas that drink Starbucks and the Republican rural areas that eat Chick-Fil-A.

According to Todd, there are a few Senate seats up for grabs in Chick-Fil-A-loving states like Montana, South Dakota and West Virginia, giving Republicans the advantage. And he said that the major battlegrounds are Colorado and Iowa.

This is beyond dumb. If this were really the case the Democrats would have the 2014 election sewn up because Starbucks has way more locations than Chick-Fil-A, which has zero localtions in Montana. But of course this is just blather that Chuck Todd, for reasons best known to himself, chooses to visit upon his remaining viewers.

Chuck Todd could ask former Senator Bob Graham, someone with a history of getting national security right, to appear. Or he could ask Senator Mitch McConnel if he really plans another government shut down. Or he could invite Howie Klein of DownWithTyranny to ask Steve Israel about his leadership of the DCCC, the most under reported story of the 2014 election. But no, all Chuck Todd offers us is blather, and I think this is what we can expect in the future.

Real Fiscal Responsbility Today will be an economics show, which will only deal with economic side of our political discourse. We will not engage in the horse race side of it. However, we do plan to set an example that will demonstrate that we need not settle for blather.

Capitalism runs on sales

The Economy: Does More Government Help or Hurt – Complete Program

Presented at the Kansas City Public Library, Plaza Branch on September 16, 2014. This is the complete program and includes Dr. Haslag presentation and the Q&A session after both presentations.

“Businesses hire when they are swamped with demand, not when you dangle a tax cut carrot in front of them.” This may sound like captian obvious; but it is the sort of commense observation you will never hear on our current talk shows. Which is why we have decided to create our own talk show. Help us launch Real Fiscal Responsibility Today.

Addressing doubts about Modern Monetary Theory

Modern Monetary Theory is so breath-takingly different from the conventional view of economics that it takes some getting used to. Those interested in the long version might be interested in these excerpts from the Fiscal Sustainability Teach In Counter Conference, which was my first exposure to MMT.

I support MMT simply because it is an accurate description of the world as it is. Taxes do not fund the government. Let me provide two examples of how that is the case. From Scott Pelly’s interview with Federal Reserve Chair Ben Bernanke:

Asked if it’s tax money the Fed is spending, Bernanke said, “It’s not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It’s much more akin to printing money than it is to borrowing.”

“You’ve been printing money?” Pelley asked.

“Well, effectively,” Bernanke said.

So when banks are in trouble the Federal Reserve can, if it is so inclined, print money to bail them out. Banksters already have MMT, we just need to take this public resource and put it to public purpose rather than continuous bailouts of ailing banks.

Warren Mosler illustrates MMT by explaining that if you went to the IRS personally to pay your taxes in cash the IRS would hand you a receipt, thank you, and put your cash in the shredder. From the point of view of the IRS your cash is simply a symbol of your compliance. By contrast if you went to the D.C. Department of Taxation and paid your taxes in cash they would give you a receipt and put that cash in the bank. From D.C.’s point of view your cash has value. Clearly if the IRS puts your cash in the shredder they are not planning to use it to pay for government expenditure as would be the case in D.C.

These two examples demonstrate that Modern Monetary Theory explains the world as it is. Taxes do not finance government expenditure at the federal level. That alone is reason to embrace MMT. If it explains the world as it is, and I put it to you that it does, than we should use it as a basis for public policy.

I will try to address some of the inevitable doubts that spring up about MMT. Here I confine myself to honest critics of MMT, people who are sincerely trying to understand it. I will ignore those who I regard as propogandists for plutocrats, who are using the myth of scarcity to maintain control over our economic discourse.

The first objection people raise is that of inflation, what about Weimar? Zimbabwe? The problem in both cases was not printing too much currency, but the collapse of productive capapcity. In the case of the Weimar Republic what was not destroyed in World War One was taken by France when they seized the Ruhr valley. When there is nothing to buy, the what little there is becomes very expensive. Retricting the money supply will not fix that, you need to expand productive capacity. The same is true of Zimbabwe, in that case farms owned by white farmers were seized and handed over to army veterans. Since the veterans had no agricultural experience production collapsed and a nation that had been a net exporter of food experienced famine. Restricting the money supply would not have fixed that, only restoring agricultural production would. That is why MMT economists focus on productive capacity and see unemployment as a symptom of a dysfunctional economy. It is appropriate for a government to keep spending into the economy as long as it results in the expansion of productive capacity.

Speaking only for myself, I consider increasing taxes on the rich as necessary for preserving democracy. It is clear to me that when inequality becomes too great the uber rich, the .001%, form a cabal to seize power and strip society of its assets. That is what is happening now in Detroit and will happen to the entire country if we are not careful. In my view, higher taxes on the uber rich are part of the checks an balances that preserve democracy. We limit the power of the President, Congress, and the Courts. Each institution serves as a check on the other two, and a free press,  the right of assembly and petition, and free elections serve as a check on the system as a whole. In addition to these checks we need to tax the uber rich to limit their resources so they can’t destroy the rest of us, as is the case in unchecked wealth. But this is a political arguement. We don’t need this money to fund the government, we need for no one to have so much money that they can destory society.

I would go farther, I think we need a requirement that no war can be taken without an increase on income taxes at the highest bracket. If it is not important enough to the elites to pay higher taxes, if it is not importnat enough for the elites to make so trifling a sacrifice, while sending others to their death, then it is not important enough for the nation to go to war. But that is a political arguement. We don’t fund wars from tax revenue.

MMT destroys the argument for austerity. Since we can indeed print money, unemployment is completely unnecessary. It is true that nothing in the theory of MMT requires a job guarantee. We can continue with the present system, endless MMT bailouts for banksters and austerity for the rest of us. But once the general public understands MMT that will be politically unsustainable. Once the public understands that the Federal Reserve can simply put money into the accounts of banks the questions arises, why can’t the Federal Reserve put money into our Social Security accounts? Why can’t the Federal Reserve put money into the account of the city of Detroit? Indeed, why not every municipality and state? Why not indeed. As long as that money is used for increasing productive capacity, schools, hospitals, transportaion, and the like, there will be no inflation. There is no justification for austerity. Which is why the elites hate MMT and are keeping it out of our public discourse.

Modern Monetary Theory is as destructive to economic plutocrats as the idea of popular democracy was to royal abolutism. That is why we need to bring it to the general public. Help us do so, help fund Real Fiscal Responsibility Today.