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The MMT Grand Bargain: Raise Social Security Benefits and Suspend FICA

16 Responses

      1. @Tom,

        He may, but not necessarily. He earned his doctorate at Oxford and spent some time at LSE as a research fellow. Both would have exposed him to post-Keynesian concepts like intersectoral balances.

  1. From the comments:

    “Because he deals in fixed-income securities – bonds, etc. he hopes that imposing asterity will raise the interest rates on Federal & eventually all US bonds.”

    Your move, warren πŸ™‚

      1. @WARREN MOSLER, Whatever the Congress intends, some of the investor class are still hankering for a return of interest and dividend rates which provide a living without doing any work. I suspect they think that money is like any other good or service; if there is less, what there is will cost more. Bringing interest rates back up to 1990 levels seems to have been a major ambition since 2000, when Greenspan argued that the federal surplus was responsible for the reduced interest rates set by the Fed and, therefor, the surplus needed to be replaced with a deficit, lickety split.
        Warren Stephens, whose Stephens, Inc. started out in the bond business, seems to have realized that the halcyon days of fat dividends aren’t coming back and bankers are going to have to get used to being boring middlemen.

      2. @AP,

        Ah, I see, in the HuffPo comments. Good response here: http://www.huffingtonpost.com/social/demockracy/the-mmt-grand-bargain-rai_b_2268875_213011260.html

        β€œThis is both upside-down *and* backwards. Mosler has been taking the likes of Peterson to task for a lot longer than you’ve been paying attention. (We have trouble measuring attention spans that exist only in nanoseconds.) It doesn’t *fit* there at all…

        Please take a moment to *think* and *listen* before you start writing.”

  2. Warren, somewhat off topic, what do you think about the upcoming japaneses election and what might be the economic consequences if the LDP party wins as expected…Abe seems pretty determined to move the economy out of it’s funk. I’ve heard some mention of fiscal action, but most of the rhetoric has been around monetary.

  3. Now the Fed has linked rates to the unemployment rate ..given the potential for a pick up in construction jobs, fewer public job layoffs and a modestly improving eco picture ..how long will it take to get 6.5% unemployment ? less than a year ? warren ?

  4. Quotes from Societe Generale Cross Asset Research:

    -We believe Japan’s FX regime is substantially responsibility for deflation. The yen’s appreciation was entirely inappropriate, especially during and after the Great Financial Crisis, the Great Recession and the Fukushima disaster. We believe FX policy is set to change, and repeat our call for a Swiss-style policy which would peg the yen at a weaker level.

    1. yes, buying dollars and euro is what I call ‘off balance sheet deficit spending’ and it will weaken the currency and support exports, at the expense of their real terms of trade, of course, but that’s another story. post coming

  5. Quotes from Societe Generale Cross Asset Research:

    -Exiting inflation and BoJ-bashing have been central themes in the election in Japan. The leader of the LDP, Mr Abe, has called for a series of policy changes from the BoJ, culminating in the threat to change the BoJ Act and take away its independence.

    -Other parties including the DPJ, have grown increasingly restless with the perceived inaction of the BoJ. In our view, BoJ policy will become much more aggressively expansionary, regardless of who runs the next government.

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