Tag: Social Security

–Fiscal Sustainability Teach-In and Conference

Mainstream economics has led us to an average of one recession every five years. People have been fed obsolete hypotheses for so long and so often, we now have knee-jerk agreement among the media, the politicians and some economists.

But deficits neither are normal nor inevitable. Many prominent economists have discovered a better way to foster economic growth. They will host a conference to discuss their ideas, and you are invited.
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April 28th: Fiscal Sustainability Teach-In and Conference
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“The Fiscal Sustainability Teach-In Conference will be the important event in Washington on April 28. This will feature important work by honest scholars. It deserves (your)attention, and […] respect.”
— James K. Galbraith, The University of Texas at Austin. [April 19, 2010 via email with permission]
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The deficit hawks are at it again: attacking Social Security and Medicare with obsolete economic notions. We offer a counter-narrative to the false but conventional notion that Federal deficit spending is harmful, that it is a burden to the next generation, that deficit spending risks insolvency — basically that the Federal Government Budget is some how analogous to a household budget when, in fact, it is quite different.

The Teach-In Conference on Fiscal Sustainability on April 28th, 2010 in Washington, DC aims to do just that with some real world, honest economics.

We can move beyond the false economic orthodoxy that got us into the current economic mess and that is now being promoted to attack Social Security and Medicare — and harming our nation and it’s people. You can participate.

The tentative program schedule: Interesting topics and excellent presenters as of 04/16/10:

8:30–8:45 AM Welcoming Remarks
8:45–10:15 AM What Is Fiscal Sustainability? Bill Mitchell, Research Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW Australia, and blogger at billy blog

10:15–10:30 AM BREAK
10:30 AM–12:00 PM Are There Spending Constraints on Governments Sovereign in their Currency? Stephanie Kelton, Associate Professor of Macroeconomics, Finance, and Money and Banking, Research Scholar at The Center for Full Employment and Price Stability (CFEPS), University of Missouri – Kansas City, Research Associate at The Levy Economics Institute of Bard College, and blogger at New Economics Perspectives

12:00–12:15 PM BREAK
12:15–1:45 PM The Deficit, the Debt, the Debt-To-GDP ratio, the Grandchildren and Government Economic Policy Warren Mosler, International Consulting Economist, Independent Candidate for the US Senate in Connecticut, and blogger atmoslereconomics.com

1:45–2:00 PM BREAK
2:00–3:15 PM Inflation and Hyper-inflation Marshall Auerback, International Consulting Economist, blogger at New Deal 2.0 and New Economic Perspectives, and Mat Forstater, Professor of Economics, Director of CFEPS, Department of Economics, University of Missouri — Kansas City, Research Associate at The Levy Economics Institute of Bard College, and blogger at New Economic Perspectives

3:15–3:30 PM BREAK
3:30–5:00 PM Policy Proposals for Fiscal Sustainability L. Randall Wray, Professor of Economics, Director of CFEPS at the University of Missouri – Kansas City, and Senior Scholar at The Levy Economics Institute of Bard College; and Pavlina Tcherneva, Assistant Professor of Economics at Franklin and Marshall College, Senior Research Associate at CFEPS and Research Associate at The Levy Economics Institute of Bard College and bloggers at New Economic Perspectives

How you can participate:
1. Contribute to the cost of the Conference — Please click below and make a donation of $50 (or more if you want) to show support. It’s about strength in numbers (the entire budget is under $10,000).
Make Donation
2. Attend the Teach-In — watch these pages for location and other logistical information
3. Spread the word — write a blog post, talk with your friends.
4. Educate yourself — some great introductory resources are:
o Teaching the Fallacy of Composition: The Federal Budget Deficit, by L. Randall Wray
o Fiscal sustainability 101, by William Mitchell
o 7 Deadly Innocent Frauds, by Warren Mosler
o In Defense of Deficits, by James K. Galbraith
o A Quick Summary, by Rodger Malcolm Mitchell

Please do what you can to help bring the truth to light. Deficits are not normal. Social Security and Medicare can survive without benefit cuts.

Every little bit helps. Thank you.
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Rodger Malcolm Mitchell
http://www.rodgermitchell.com


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–What does the Tea Party want? Ask Sarah Palin

An alternative to popular faith

It’s a peculiarity of the human species, that if you speak from the pulpit of patriotism or religion, you can spew almost any kind of nonsense, and gather followers.

Take Sarah Palin, perhaps the nation’s leading demagogue. She shouted this irrationality to a cheering Tea Party crowd, “Is this what their ‘change’ is all about? I want to tell them, nah, we’ll keep clinging to our Constitution and our guns and religion – and you can keep the change.” The mob screamed in ecstasy, without bothering to wonder what she meant.

Does “they” just refer to Democrats, or is “they” the whole U.S. government? Hard to tell. Ironic, how hating the government now equates with patriotism and the Constitution.

According to Mrs. Palin, “they” have violated the Constitution in some unexplained way. And she indicates “they” will take Tea Party guns and religion away. She doesn’t explain how “they” will do that, but so long as she wraps herself in the flag and religion, her worshipers won’t remind her she has no idea what the hell she’s talking about.

I empathize with Tea Party folks, because one thing they want, I also want: Lower taxes. But I would be embarrassed to allow a hate-mongering, anti-everything, nitwit like Sarah Palin be my guide.

Really folks, is this the best you can do? There are excellent, economic ways to reduce taxes (which you will see if you comb through this blog site). But knock it off with the American flags, the Constitution, guns and religion, none of which have anything to do with lowering taxes.

Unfortunately for Tea Party “logic,” they not only want lower taxes, but lower deficits and less government. At the same time, they want a stronger army, better schools, federal supervision of banks and other financial firms, better roads, defense of our borders, defense against terrorism, safer food, better retirement, better unemployment insurance, police, health care, rescue from hurricanes and other disasters, more jobs and a better environment.

Hey, Tea Party. The things you want cost money. So if you want both lower taxes and a reduced deficit, where will the money come from? Cutting both taxes and the deficit requires dramatically reduced government spending. So, how will that get you the things you want? It won’t. All it will get you is a Sarah Palin.

Sure, raw, mob emotion can make you feel strong. Look what it did for Joseph Goebbels. But eventually, morning will come and you will realize your torches, pitchforks and white sheets were silly. Only then, can we have the rational discussions that will help us create and take the steps to improve our nation.

Sadly, the “T” in Tea Party does not yet stand for “Think.”

Rodger Malcolm Mitchell
http://www.rodgermitchell.com


–Ben Bernanke and the popular faith

An alternative to popular faith

According to the April 8, 2010 Wall Street Journal, “Federal Reserve Chairman Ben Bernanke said Wednesday that huge U.S. budget deficits threaten the nation’s long-term economic health and should be addressed soon.” That is the popular faith, with “faith” being defined as belief without scientific evidence.

By using the words “addressed” and “soon” Mr. Bernanke is relieved of the responsibility to provide a specific solution or a timetable.

The Journal said, “In remarks to the Dallas Chamber of Commerce, Mr. Bernanke agreed […] that the economy, while improving is still too weak to bear all the new taxes and spending cuts that would come with an aggressive deficit reduction campaign.” The Journal continued, “Cutting the deficit ultimately will mean choosing between cutting (Social Security and Medicare) entitlements, raising taxes or other spending cuts.”

This is exactly correct. Federal deficits never have been shown to cause inflation (See: item #8. )or to have any other negative effect on people or on the economy in general. In fact, substantial evidence indicates that reducing deficits has caused nearly every recession and depression in our history. (See: Click here, items #3 and #4. )

By contrast, increasing taxes or cutting Medicare and Social Security benefits or cutting other expenses (defense, infrastructure, health care, food stamps, education, research, etc.) absolutely will have a negative effect on people and on the economy in general.

So which does a sane person choose, something not proven to have a negative effect or something proven to have a huge negative effect?

Mr. Bernanke worries large deficits cause high interest rates. He subscribes to the popular faith that low rates stimulate the economy, despite there being no historical relationship between interest rates and economic growth (See Item #10 ), as he should have learned from his, and his predecessor’s twenty futile rate cuts leading into the recession.

Quoting the Journal, “[…] higher rates push up borrowing costs for many businesses and consumers,” ignoring the many businesses and consumers who are lenders, and who benefit from higher rates. For every borrower there is a lender. All of you who own savings accounts, NOW accounts, money market accounts, corporate bonds and T-securities profit when rates are higher. It may surprise you to learn higher rates have been economically stimulative, because they’ve forced the government to pay more interest into the economy. Finally, some economic hypotheses indicate low rates were partly at fault for the housing bubble.

In summary, Mr. Bernanke promotes a goal with no proven benefit, provides neither a plan nor a timetable for achieving his goal, admits it would require tax increases and spending cuts, both of which hurt people and the economy, and he discusses a possible problem (high interest rates) history shows is more a benefit than a problem.

At long last, will someone please stand up and say, “The popular faith doesn’t seem to work. May we try something new?”

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

–We hate big government

An alternative to popular faith

Perhaps it began with President Reagan, who said, “[…] government is not the solution to our problem; government is the problem.” Or maybe it began long before that, when brave, heroic, self-sufficient individuals populated this land, doing everything for themselves, and asking help from no one.

I don’t know when it started, but somewhere along the line, it has become quite knowledgeable and oh so chic to express hatred for big government and big business.

These days, to demonstrate how clever we are, we parrot the popular faith that socialism, deficits and tax increases are bad. Yes, we like Medicare, Medicaid and Social Security, but we hate big government, taxes and deficits.

We like having a strong army, a national highway system, being first to go to the moon, flu vaccine, smallpox eradication and ecologically friendly cars, but we don’t want that big, bad government telling us what to do.

We want federal help when we are hit by floods, tornados, hurricanes, volcanic eruptions and blizzards, but please no big government, taxes or deficits.

We want someone to inspect our food, take a census, protect our savings, build our dams, supervise our courts and maintain our prisons. But, not big government.

Yes, we love Yellowstone, Grand Teton, Grand Canyon and the other 389 national parks. And sure, we also appreciate the many national monuments, seashores, recreation areas, historic sites, military parks and battlefields maintained by the government, but remember this: We hate big government.

Sure, protect our borders, our airports, trains, bus stations, subways, and cities from terrorists, but please do it without big government, tax increases or deficits.

Most recently, we’ve criticized all suggestions for improving health care, because they involve big government, or big insurance companies, or federal spending or tax increases, all of which we hate. And of course, doctors are overpaid; hospitals charge too much; pharmaceutical companies gouge us, and the poor don’t deserve our help, so we hate them all, too.

We join groups like the Tea Party, so we can be with other people who prove their understanding of the world, by hating socialism, big government and big business. You see, the federal government is wasteful, inefficient and stupid. And because small business can’t compete with large foreign businesses, they need to grow, but when they become large, they get greedy. And unsuccessful large companies go out of business, firing millions of people, so yes, we hate them. And we especially hate them when the government bails them out, so they don’t have to go out of business and fire millions of people.

We just wish someone would take care of things for us. But no more taxes, no more deficits, and by all means, no big government or big business.

Is magic available?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com