All Life Is Problem Solving

Warren Mosler has an important forthcoming book called The Seven Deadly Innocent Frauds, which is, fortunately, available right now in a pre-publication version for reading and commenting from Warren’s site.

Jamie Galbraith, Warren’s friend and occasional co-author has recently written a Foreword to the book, which also can serve as a Foreword to the Modern Money (or Monetary) approach to economics. I think the foreword is important enough in itself that I decided to comment on it. That commentary is the subject of this blog post. I’ve arranged the post as a series of quotes and additional, hopefully, value-added, comments on what Jamie said. [Read more →]

In early December, I asked whether President Obama would choose to be more like Hoover, or more like FDR. Well, I guess it’s definitely Hoover.

The President believes that Federal dollars for a jobs program necessary to end The Great Recession are limited. He can only believe that because he believes that the Federal Government has to either tax or borrow to get those dollars. This belief is false, and it can’t provide either a rationale or an excuse for not funding as large-scale a jobs program as Americans need to go back to work. [Read more →]

Deficit terrorism has lately turned to deficit hysteria. With Germany leading the way, most Eurozone countries appear ready to implement austerity programs. The United Kingdom, under its new Conservative/Liberal overlords, appears to be taken with austerity too. And Canada, Australia, New Zealand and Japan have all jumped on the bandwagon. But it doesn’t look like this bandwagon will include Brazil and Argentina. They’ve had their fill of austerity, and the prescriptions of the IMF, and they’re not taking on neo-liberal ideology again any time soon. The question is what should the United States do? [Read more →]

These days, if you work for the WaPo, lip service to deficit hawkism is becoming a job qualification. The New York Times is more divided on things. Krugman has been on a crusade against austerity and has had some good blogs recently, Bob Herbert had a great one on jobs the other day, and the editorial page actually opposed the growing chorus for austerity.

But Bobo, on the other hand, is offering the theory that we are ending the period of fiscal stimulus and moving into the period of fiscal consolidation, and is, assembling “evidence” from various studies that austerity has often been “associated” with great economic gains. [Read more →]

In a heartfelt piece lamenting the jobs crisis and Washington’s Hooverite response to it, Bob Herbert of the New York Times said:

There is no plan that I can see to get us out of this fix. Drastic cuts in government spending would only compound the crisis. State and local governments, for example, are shedding workers as we speak.

Actually, there is a simple plan that would get us out of this and its author says it would do it in 90 days. The author is Warren Mosler an International Consulting Economist who is running for the US Senate in Connecticut under the Independent Party Banner, and who is one of the leading figures in the approach to economic analysis that has come to be called Modern Monetary Theory (MMT). [Read more →]

Dear President Obama:

I’m not entirely sure how to put this, so I guess I’ll just come right out and say it. During the last presidential campaign and in the context of John McCain’s admission that he didn’t understand economics very well, you let us know that you thought you had a very good understanding of it. Well, Mr. President, I’m here to let you know that you don’t understand it, don’t know what you’re doing, and are now preparing to do exactly the wrong things. And, I’ve got lots of evidence for thinking that. What’s my evidence?

To begin with, you’ve been President for close to a year and a half now, and your bailing out of the big banks, toleration of big bonuses in the finance industry, reluctant pursuit of new financial regulatory legislation that will, in fact, regulate, and an economic stimulus package, in combination, have only, at best, stopped the march toward economic deflation temporarily. There appears to be no sustained recovery underway, little new economic activity on Main Street, little prospect for achieving full employment anytime soon, and every prospect that close to 20% of our labor force will have blighted working and economic lives for some years to come. [Read more →]

By

Warren Mosler

With permission of the author

The G20 has dropped its support for fiscal expansion. The deficit hawks are prevailing. But why is that? We all either know or should know that operationally Federal spending is not constrained by revenues, as Chairman Bernanke stated last year, when asked on ’60 Minutes’ by Scott Pelley where the funds given to the banks came from:

“…we simply use the computer to mark up the size of the account that they have with the Fed.”

We know that when the Fed spends on behalf of the Treasury it simply credits a member bank or foreign government’s reserve account at the Fed. [Read more →]

Warren Mosler, an international financial consultant, and Independent Party Candidate for the Senate in Connecticut has issued a challenge to his opponents. Here’s the nub of it.

A 37 year ‘insider’ in monetary operations, Mosler knows as a fact of actual monetary operations that, operationally, there is no such thing as the US government running out of dollars, being dependent on foreign borrowing, or potentially facing a solvency crisis like Greece. Nor is there any financial reason to cut Social Security or Medicare benefits. To make the point, he’s offered to pay $1 million of his own money to any of his Senatorial opponents on the ballot who can prove him wrong. ‘Those fears come from pure fear mongering from supposed experts, with no factual basis, and those unwarranted fears are the true obstacles to the return of full employment and prosperity’ said Mosler. [Read more →]

At the very end of the Seminal/FireDogLake discussion of my last post, “How Are You Going To Pay For It”, two commenters, ironymeter and konst, offered some comments about the idea in Modern Monetary Theory (MMT) that fiat currency is, to a great extent, accepted, because the Government mandates its status as sole legal tender which can be used for paying taxes imposed by the Government. Let’s begin with a reply to ironymeter; who says: [Read more →]

This is the third and last in a series of posts based on youtubes from a speech in Milford CT by Warren Mosler. Warren is running for the Senate in CT in the Independent Party primary. Unlike both the Democratic and Republican candidates Warren really understands economics and his forté is explaining it to people. Here’s a youtube following on the last one I blogged about. My earlier post covered Warren’s policy proposals. This one considers the question “How are you gonna pay for it?” [Read more →]