Krugman VS the market

[senseamp]

Personally I think the stimulus helped stop the bleeding, and I think most people would agree.

Quoted for posterity.

 

[werepossum]

Quoted for posterity.

??? I've only posted that a hundred times, but whatever.

Let me know if you need another copy.

 

[Bird222]

I have been trying to read up a little on MMT. Could someone provide just some basic accounting entries for the following (if I miss any important entities please add them):

1. What was the accounting entry when the US dollar first started? i.e. when the Treasury gives money to the banks what accounts are debited and credited at the Treasury and what accounts are debited and credited at the banks?

2. When the Treasury sell bonds, what are the entries? When they buy bonds what are the entries?

 

[Doc Savage Fan]

"Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in)." - Paul Krugman

 

[nick1985]

"Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in)." - Paul Krugman

He didn't mean that.

 

[AMFMQAM]

Pity me, for I am a 9/11 truther who is off his meds.

 

[Bird222]

I have been trying to read up a little on MMT. Could someone provide just some basic accounting entries for the following (if I miss any important entities please add them):

1. What was the accounting entry when the US dollar first started? i.e. when the Treasury gives money to the banks what accounts are debited and credited at the Treasury and what accounts are debited and credited at the banks?

2. When the Treasury sell bonds, what are the entries? When they buy bonds what are the entries?

Can anyone answer this?

 

[Craig234]

Can anyone answer this?

Suggestions, calling the US Treasury, and the library.

 

[Bitek]

...
As far as Krugman, after his bullshit "we should have 7% targeted inflation policy" I can only assume that he either doesn't understand basic math or is a liar with an agenda. I assume it is the latter but I am willing to consider the former.

Without knowing the exact quote you are referring to, Krugman has advocated the Fed publicly announce a higher target rate for inflation.
Why?

He is proposing trying to change the calculus of investors and debt holders to hold onto Tbills and cash rather than invest in productive assets. Due to low inflation, there is little risk to companies just sitting on hoards of cash and wait out the storm. (ie not spend, not hire, wait for sure signs of demand)

Knowing that higher inflation will decrease the value of cash, they will be motivated to invest in assets which will offer a greater ROI over inflation. (ie workers, capitol investments, other growth opportunities.) They will be pushed into taking more risk rather than to wait out the slack in demand.

This decision also changes the operation of the Fed. They have a dual mandate for full employment and low inflation. Not always synchronous policies. He has criticized the Fed for too much focus on inflation (which has been low), and too little on unemployment (which has been high and stubborn.) Such an decision would force Fed into more action on employment rates.

This does not mean inf% will go to 7%. Just means Fed will only watch it and not worry even if it creeps to higher than avg levels. Say 4%. Keeps their eye on the employment ball.

Inf% cannot really rise w/o in increase in wages. Wages won't go up until employment gets better. So there are still natural checks on the system.
Since we are suffering and overburden of private debt and an uncompetitive export market, an added benefit is that value of debts go down faster, and a weaker $ will improve exports and job opportunities domestically. Also will make imports less attractive and aid trade balances.

His own critique of this policy is that it does not guarantee investments will be made in the US. That why he still favors more direct methods, but given the political paralysis, we need help wherever it can come from.

And I believe it was he who wrote something concerning the potential cost to service our debt in the future is greatly overstated. ..

Again not sure of quote. Krugman has worried about long term debt. He has questioned some of the calcs of % rate as being too high bc of dismissal of the liquidity trap. Long term conditions are serious, but has advocated a policy of worrying about the problem in front of us more than the one we imagine in the future. Has also pushed that fixing problems of today are essential to solving the future problems. One cannot be done w/o the other.

 

[Craig234]

His own critique of this policy is that it does not guarantee investments will be made in the US. That why he still favors more direct methods, but given the political paralysis, we need help wherever it can come from.

Surprising statistic: In 2010, US companies created 1.4 million jobs overseas, and nearly 1 million in the US.