Ted Cruz made a very sound and impressive comment on money in last night's Republican presidential debate. It's the best comment on money from a presidential candidate since Ron Paul ran in 2012:
You know, it's interesting, you look at on Wall Street, the Fed is doing great. It's driving up stock prices. Wall Street is doing great.
You know, today, the top 1 percent earn a higher share of our income than any year since 1928. But if you look at working men and women. If you look at a single mom buying groceries, she sees hamburger prices have gone up nearly 40 percent.
She sees her cost of electricity going up. She sees her health insurance going up. And loose money is one of the major problems. We need sound money. And I think the Fed should get out of the business of trying to juice our economy and simply be focused on sound money and monetary stability, ideally tied to gold.-RW
Over on the “other side”, people never seem to mention that Bernie Sanders is an MMTer:
ReplyDeleteNew budget committee ranking member Sen. Bernie Sanders (I-VT) is poised to break dramatically from traditional Democratic views on budgeting, from Obama to Clinton to Walter Mondale and beyond.
His big move: naming University of Missouri - Kansas City professor Stephanie Kelton as his chief economist. Kelton is not exactly a household name, but to those who follow economic policy debates closely, tapping her is a dramatic sign.
For years, the main disagreement between Democratic and Republican budget negotiators was about how to balance the budget — what to cut, what to tax, how fast to implement it — but not whether to balance it.
Kelton is among the most influential advocates of Modern Monetary Theory (MMT), a heterodox left-leaning movement within economics that rejects New Keynesianism and other mainstream macroeconomic theories.
MMT emphasizes the fact that countries that print their own money can never really "run out of money." They can just print more. The reason we have taxes, then, is not to pay for stuff, but to keep people using the government's preferred currency rather than, say, Bitcoin.
The main takeaway from this is that you really don't need to balance the budget over any time horizon, and attempts to do so will hurt the economy. That's what Kelton argues happened after the Clinton surpluses of the late 1990s / early 2000s. Any dollar of government surplus must show up as private debt, she reasons.
http://www.vox.com/2015/1/10/7521819/sanders-mmt-kelton
The last two paragraphs are the craziest things I've ever heard in my life. The budget surplus hurt the economy in 2001 ... around the same time my uncle's pigs flew south for the winter!
DeleteWow nice comment from Cruz!
ReplyDeleteStick with the inequality debate, not price inflation. More ammunition for the Krugmans of the world. "These GOP cranks think inflation is a problem at a time when yada-yada-yada CPI yada-yada PCE deflater yada charts." Hard to argue that the Fed's easing hasn't created more wealth inequality.
ReplyDelete