Great Leap Forward

PAYROLL TAX HOLIDAYS AND MMT: It’s a Funny World, News Recap on the Eve of Xmas

As Mae Moore says, “It’s a Funny World” (2002). Let’s try to make sense of two news reports. Help me if you can.

1. Republicans reject the payroll tax holiday because it does not go far enough. To complicate matters, the Senate has already gone on its Xmas holiday and is refusing to come back. That leaves the Republicans in a bit of a pickle—they are going to raise taxes on the average American by $1000 per year because they refuse to support a 2 month holiday extension.

Right. Congress wants its long holiday from work, but does not want to give Americans a holiday from paying a regressive tax—the payroll tax—that for the bottom 70% of American workers takes away more income than the Federal Income tax. It is a job killer, too—as it raises the cost of employing Americans over the cost of employing workers just about anywhere on earth (few other countries tax work and employment the way we do—our payroll tax makes American workers more than 12% more expensive). So Republicans want to take away the payroll tax holiday and kill jobs.

That is a rather nice election strategy. And it is bad enough that they’re mainly running clowns for President. With the exception of Ron Paul, is there any serious candidate in the running? No, I didn’t think so. What, they actually WANT President Obama for 4 more years? Why? To continue to bail-out Wall Street? To continue to look the other way while banksters trash the economy?

Apparently the Republicans are hold-outs because they want two noxious additions to the payroll tax holiday legislation. First, they want an environment-killing Keystone pipeline—so they want that linked to the extension of the payroll tax holiday. The wording they prefer forces the President to forego any reasoned analysis of the wisdom of the pipeline by rushing a decision within 60 days. Second, they want to end the extended unemployment compensation benefits—to kill any jobs that the payroll tax holiday created. Right. We’ve been too kind to the environment and to the workers who lost their jobs because of Wall Street’s excesses, so let’s take away the payroll tax holiday and kill as many jobs as we can.

The logic escapes me. Extending the payroll tax holiday while reducing the time unemployed workers can collect benefits is a zero sum game. Do Republicans really want to fiddle while the economy slips into Great Depression 2.0? Yes they do. They see that as a win-win. They’ll run some Bozo the Clown, lose the election, and then stick Obama with the coming depression. And they hope to also stick him with an environmental nightmare to hasten the end of life as we know it.

Oh, sure, there will be life after Keystone. You’ve seen some of the science fiction movies that attempt to divine it. I’d put my money on the dystopian Mad Max or A Boy and His Dog. I expect that is a future that many of the current Republican candidates would embrace: one with insignificant, ineffectual governmental constraint on unbridled pursuit of macho self-interest. Newt! It’s your party platform.

2. The World Discovers Modern Money Theory. Who wuddavthought? The problem with the Euro is that formerly sovereign nations gave up their currencies to adopt a foreign currency called the Euro. Now, MMT followers have been saying that since the Euro was proposed. It was a system designed to fail, and like all systems designed to fail the only question was when. We now know the “when” is January 2012—when the Euro banks fail and Italy leaves the union.

But we were ignored for a decade and a half, while economists and policymakers celebrated the glorious “Union”. Heck, the union was so great that the EMU invited every Tom, Dick, and Harry nation to join up. They added nations with wages and living standards that were barely above subsistence level—indeed, nations that were willing to reduce living standards below subsistence if only they could join and reap the supposed benefits of joining the most dysfunctional empire ever constructed.

And they let Germany add cheap workers within its eastern half and then extend its reach to those low cost new additions as it came to account for 75% to 80% of all European exports. There has never been any international arrangement, anywhere, at any time in human history, that so-favored a nation. And when things went predictably bad for all of Germany’s neighbors, Germany pointed its finger at its victims and insisted that they were at fault for Germany’s success. No more porridge for them!

As evidence that the world is coming around (finally) to the MMT view, take a look at Dean Baker’s excellent piece:

Now here’s the ironic thing. It seems to have been none other than Paul Krugman who made it safe for others to adopt MMT. He shined his headlights on the obvious: the reason why interest rates on government debt are not exploding in countries like Japan, the US, and the UK is because they issue their own currencies.

Japan is the champion nation in terms of budget deficits and government debt relative to GDP. Many have long argued (wrongly) that this is because holders happen to have addresses in Japan. Nonsense. A sovereign government that issues its own currency makes interest payments on its debt in exactly the same manner whether the holder has an address at the South Pole or on Mars: a keystroke to a savings deposit at the central bank. What matters is whether the country issues its own currency.

That is why the little spat between the UK and France—with France insisting that credit agencies ought to down-grade the UK before they downgrade France—is so silly. France can have a debt ratio under 15% of GDP and still be forced to default. The UK can have a debt ratio above Japan’s 200% and still face no chance of involuntary default. That is the beauty and utility of issuing your own currency. France is a currency user and its fate depends on Germany—which is busy sucking up every spare Euro it can lay its greedy hands on. France is no better off than the panhandler on the street corner begging for pocket change—a user of currency, not an issuer.

So, Krugman shined the headlights on the difference between a currency issuer and a currency user. It is now time for everyone to follow Dean Baker—to look for the car keys under those MMT headlights.

3. Olly Olly Oxen Free: it is safe to come out of the dark. A sovereign government faces no financial constraints. We can have payroll tax holiday extensions and unemployment benefit extension. Heck why don’t we go whole-hog and actually create jobs for the unemployed? We need 25 million of them. We can afford them. All we need to do is to find useful things for them to do. That ain’t hard.

“The Conservative belief that there is some law of nature which prevents men from being employed, that it is “rash” to employ men, and that it is financially ‘sound’ to maintain a tenth of the population in idleness for an indefinite period, is crazily improbable — the sort of thing which no man could believe who had not had his head fuddled with nonsense for years and years… Our main task, therefore, will be to confirm the reader’s instinct that what seems sensible is sensible, and what seems nonsense is nonsense. We shall try to show him that the conclusion, that if new forms of employment are offered more men will be employed, is as obvious as it sounds and contains no hidden snags; that to set unemployed men to work on useful tasks does what it appears to do, namely, increases the national wealth; and that the notion, that we shall, for intricate reasons, ruin ourselves financially if we use this means to increase our well-being, is what it looks like — a bogy.” –John Maynard Keynes 1972, 90-92

10 Responses to “PAYROLL TAX HOLIDAYS AND MMT: It’s a Funny World, News Recap on the Eve of Xmas”

golfer1johnDecember 21st, 2011 at 10:36 pm

"All we need to do is to find useful things for them to do. That ain’t hard."

Can you give some examples of things that public employees are not already doing, and that would be useful, but would not be missed when the JG workers got a private sector job?

j0wnDecember 22nd, 2011 at 3:13 am

I'll take a shot here … I would love a super-kick-butt-clean energy-high-speed train going to Southern Missouri so that I can look at land to farm pawpaws. It would get me there in under an hour. I'd like that, just to name one.

Only our Government could do this. The private sector could not and would undertake projects like this; too long, too risky, not enough return on investment, etc.

There are thousands of useful, purposeful things like this that would increase our national wealth and help us to better enjoy our lives …

so … end of story … then I could load up my pawpaws (after I got the land and all that) and take them to market in Amarillo in under 2.5 hours. I bet they would love them there. Maybe I would then play 9 holes in Amarillo before getting back to KC by dinner time.

See how this public action is helpin' my private action John?

and … as explained above, we can afford to do this! (super-fab)

golfer2johnDecember 22nd, 2011 at 11:19 pm

I was hoping for a more serious answer, perhaps from Dr. Wray.

Your project would indeed be "affordable", but would probably be low on the list, if sorted by contribution to the general welfare. Personally, I'd rather see the government build and operate golf courses in every town, with $1 greens fees. Still, if you vote for mine, I'll vote for yours.

But these are not good projects to be done by temps, as the JG workers would be.

And the unions would object to a high-tech rail project being staffed by near-minimum-wage workers, when it could have been contracted out to any number of companies that would do it with union labor.

The purpose of the Job Guarantee is to employ the "buffer pool" of labor that, if it were all to be employed in the private sector, would cause inflationary pressures. And to set a wage level that would serve as an anchor for all wages and prices in the economy, so as to have price stability even at full employment.

I don't see the traditional type of public infrastructure projects as meeting this sort of need. And I can't imagine lots of ways to employ so many people doing useful things that aren't already being done, and that won't be missed when we stop doing them. Hopefully someone pushing this idea has some idea of the practical details of it, beyond just the theory (which I find very attractive, theoretically).

BrainoMay 18th, 2012 at 2:17 am

I'm truly enjoying the design and layout of your website. It's a very easy on the eyes which makes it much more pleasant for me to come here and visit more often. Did you hire out a developer to create your theme? Great work!

djlightsMay 23rd, 2012 at 6:42 am

First of all I would like to say fantastic blog! I had a quick question in which I'd like to ask if you do not mind. I was interested to find out how you center yourself and clear your thoughts prior to writing. I've had difficulty clearing my thoughts in getting my ideas out there. I truly do take pleasure in writing however it just seems like the first 10 to 15 minutes tend to be lost simply just trying to figure out how to begin. Any ideas or hints? Kudos!

5dpn28taJune 11th, 2012 at 9:42 pm

the mainly through three channels macro energy conservation: The first is the installation of a flow control valve, flow balance, thereby overcoming Enthusiasm; followed by the role of the thermostatic valve,louis vuitton borse, use of solar energy, home appliances , lighting and other equipment, free hot; is to raise awareness of energy saving thermal residents,louis vuitton, reduce unnecessary heat open the window, etc.. Three energy-saving ways, of which two are achieved through the flow control valve. Visible, flow control valve in the metering and charging of the heating system, is how important position. Therefore, how to correct selection of the flow control valve design,5@5 – Eatocracy – CNN Blogs,franklin marshall, it is very important. the 1 thermostatic valve 1.1 radiator thermostatic valve structure and working principle (1) user control of room temperature by thermostatic radiator control valves to achieve. Radiator thermostatic control valve by the thermostat, flow control valve and connect a pair of the composition of the core components of which the thermostat is a sensor unit,borse chanel Sarah Hoye — CNN – Eatocracy – CNN, namely temperature and package. The bulb senses the ambient temperature changes the volume change,ralph lauren pas cher, driven by the valve spool displacement,scarpe gucci, thereby regulating the amount of water of the radiator to change the radiator heat emission. Thermostatic valve can artificially adjust the set temperature, the thermostatic valve will be set to require an automatic control and regulation of the water of the radiator, so as to achieve the purpose of the control room temperature. thermostatic valve is generally mounted on the radiator before the needs of people living at room temperature by automatically adjusting the flow. Thermostatic valve with two-way temperature control valve and three-way thermostatic valve divided. Three links thermostatic valve is mainly used for single-pipe system with a bypass pipe,air jordan pas cher, shunt coefficient within the range of 0 to 100% of the change in the room for flow regulation, but the price is more expensive, more complex structure. Two-way temperature control valve and some for two-pipe system, and some for the single-tube system. Two-way temperature control valve resistance for two-pipe system; less resistance for the single-tube system. Thermostatic valve, temperature of the body are generally assembled into a whole, the thermal package itself is a field indoor temperature sensor. If necessary, you can use the remote temperature sensor; remote temperature sensor placed in a temperature controlled room,chanel, and a part of the valve body placed on the heating system. selection 1.2 thermostatic valve the design thermostatic valve is the most important conditioning heating system flow regulation, and other control valve are auxiliary equipment,outlet gucci, the control valve is necessary. A heating system if you do not set the temperature control valve can not be known that the heat metering system. in a temperature control valve design,lunette ray ban pas cher Health News – Sexual Health Researc,polo ralph lauren pas cher ray ban pas cher PVPEW 2011 Eight,polo ralph lauren,chanel borse, correct selection is very important. The purpose of temperature control valve selection is based on a design flow rate (a known heat load),franklin marshall pas cher, allows the pressure drop to determine the KV value (flow coefficient); by KV value to determine the diameter of the temperature control valve (model). Therefore,ray ban, the design drawings or manufacturers sample must be given a KV value and the relationship of diameter,jordan pas cher,franklin marshall, otherwise not easy for designers. In the selection of the design of the thermostatic valve is not a simple selection of the bin down and the pipeline with the diameter of the thermostatic valve. But in the selection process, resulting in an ideal differential pressure, temperature control valve to the selected working conditions. A thermostatic valve is usually working pressure is between 2 ~ 3mH2O no more than 6 ~ 10 mH2O. To this end,franklin marshall pas cher, we must given the scope of the pre-set value of temperature control valve, to prevent noise, affecting the normal working of thermostatic valve. When in the same KV value, more than two kinds of caliber choice,jordan pas cher,polo homme, priority should be given the caliber of the thermostatic valve, its purpose is to improve the regulation performance of temperature control valve. 2 electric control valve electric control valve is a computer monitoring system for traffic regulation equipment. More commonly used in the thermal station in the unattended. Electric control valve by the valve body drive mechanism and the transmitter. The control valve is self-operated flow regulator device through the thermal package, no external power supply; and electric control valves are generally single-phase 220V power supply, usually as the executive body of the computer monitoring system (adjust the flow). Electric control valve or thermostatic valve are the heating system of regulating traffic in the most important equipment, and other auxiliary equipment. balancing valve balancing valve sub-manual balancing valve and self-balancing valve. Both manual balancing valve and self-balancing valve,louis vuitton outlet, their role is to increase the resistance so that the proximal end of the heating system, limit the actual operation of traffic should not exceed the design flow; In other words, its role is to overcome the excess capital of the heating system proximal pressure head, the electric control valve or thermostatic valve in the capital of a license indenter. Therefore, the manual balancing valve and a self-balancing valve, they are thermostatic valve or electric control valve,ray ban Toronto Maple Leafs vs. Edmonton Oilers, auxiliary flow control device, but it is very important, if the selection of inappropriate or unreasonable design,ray ban pas cher, electric control valve or thermostat The valve can not work well. the 3.1 manual balancing valve 3.1.1 manual balancing valve works manual balancing valve is a one-time manual adjustment can not automatically change with system conditions change the drag coefficient, so called static balancing valve . The role of manual balancing valve resistance,lunettes ray ban, can play the role of the manually adjustable orifice to balance the resistance of the pipe network system, to achieve the balancing effect of the resistance of each loop. Able to solve the steady-state offset: When the operating conditions different from the design conditions,christian louboutin Newt Gingrich, the circulating water is more or less than the design condition, the proportion of the balance valve balance is the resistance of the system, new water in accordance with the design calculations balanced distribution of the slip road traffic will also be a sliding scale, and still meet the requirements of the corresponding flow in the load current. source: 41899/jishu/famensheji/5111.html 1/2 1 2 Next Last adjust the flow balance thermostatic valve system valve self-design

7f75x8kav3June 11th, 2012 at 9:56 pm

(CNN) — A month ago, Google’s three-year effort to push its Web browser, Chrome,lunettes ray ban Las Vegas (CNN),moncler doudoune, took a major step when analysts said it had passed Mozilla’s Firefox to become the second-most popular tool of its kind on the Internet.Today, that climb continues and has some tech observers wondering whether Chrome could do the unthinkable and topple perennial leader Internet Explorer from atop the browser rankings.According to Web analytics firm the most popular version of Google’s browser, Chrome 15, edged out Internet Explorer 8 in early December to become the world’s most used edition of a browser. (For those keeping score, the totals were 23.6% of worldwide browser usage compared to IE8’s 23.5%.)When all versions are considered,polo ralph lauren pas cher, Chrome accounted for more than 27% of all worldwide browser use at the beginning of December, an increase of about 1.5% over the previous month. That’s compared to about 37% for Internet Explorer, which dropped 2% from November, according to StatCounter.Now in third place,lunettes ray ban pas cher (CNN), Firefox remained mostly steady with about 25% of the browser market. Trailing far behind is Apple’s Safari,nike air jordan, with about 6%.The numbers can vary in the browser race depending on who is counting. Web surveying firm still has Explorer at 52%, Firefox at 22% and Chrome at 19%. But that represents a 10-point drop by Explorer since 2010, while Chrome use more than doubled and Firefox remained flat.Gartner analyst thinks Chrome has gathered momentum because it is a strong product.”People like it because it’s fast,” he said. “Google has done a nice job advertising it recently, so that’s increased awareness.”Since its rollout, reviews have been generally positive about Chrome. While some call it a work in progress, many have praised its features and speed.”Super-fast browsing performance, now with hardware acceleration. Excellent security through sandboxing and malware warnings. Instant site prediction and loading,”in a review of Chrome 15,louis vuitton borse, giving it 4 1/2 out of 5 stars. The review also praised it for strong support for the emerging HTML5 coding system amd built-in Flash player, while dinging it for still not being compatible with a handful of sites.Smith also said people are more aware than ever that they have a choice of browsers. Internet Explorer has been the dominant browser for more than a decade, at least in large part because it comes installed on Windows machines.”This was happening even more so when there was a real big difference between what you could get from someone else and what Explorer was,” he said. “Now, that’s not the case. Explorer 9 is pretty competitive with the other browsers, so maybe there’s not as much need to go away from it.” at least part of Chrome’s rise to its increased use among businesses.”Google announced Chrome for business exactly a year ago and IT administrators appear to have embraced it in a remarkably short time,” he said.Chrome use already had overtaken Explorer on weekends,franklin marshall, when personal use presumably trumps office use, since October. But Chrome 15 became the more popular from Monday to Friday on December 5, he said., emphasized that Explorer’s latest (and ) version, IE9,nike air jordan Talk with your mouth full – what is Souther,jordan pas cher, is rapidly gaining ground as use of IE8 drops. IE9 was released in March.(To its credit, Microsoft is also celebrating the demise of Internet Explorer 6. Widely reviled by Web developers and many users from the start, use of that version dropped below 1% in the United States last month,ray ban pas cher, with writing on the Windows blog that the company is breaking out the champagne and “as eager as anyone to see it go away.”)The statistics Microsoft used on its blog, which showed Chrome use mostly flat,lunette ray ban, only looked at browser usage on Microsoft’s Windows 7 operating system.The rise of Chrome comes as Google has expanded beyond its core product — its search engine — into such areas as mobile operating systems (Android) and social networking (Google Plus). Chrome has been a high point for Google in what has developed into a two-front clash of tech titans with Microsoft.While Google tries to erode Explorer’s browser share, Microsoft is taking aim at Google’s longtime dominance in search. Launched in 2009, Microsoft’s Bing has tried to make Web search a true two-way race.And while Google’s stranglehold on that market is still strong,borse chanel, Bing has chipped away. In December, Bing captured about 15% of the search market, compared to 61% for Google, One victim of Google’s success (not to mention deep pockets) has been Firefox, long a favored browser among tech-savvy types.”They (Mozilla) were not coming out with a lot of releases and new features for some time,,” Smith said. “They’ve really tried to change that in the last year, but perceptions got made during that time frame.”They were the ones that were the sole recipient of the browser change — they were the alternative browser for most — but now they have to split that role with Google.”Whether Chrome’s rise will continue remains to be seen, he said. Web users only tend to seek out a new browser if the one in front of them is lacking,lunette ray ban pas cher, and Internet Explorer appears to have stemmed that tide somewhat.”Three or four years ago, if you wanted tabs,jordan pas cher, you had to go to another browser. If you wanted something fast you had to go to another browser,” Smith said. “That’s not the case any more.”

Most Read | Featured | Popular