Pushing back on the destructive myths of mainstream economics and their implications for federal fiscal and monetary policy, deficits, and the “national debt.”
Jul 20, 2023 • 9 tweets • 2 min read
The problem with Bidenomics?
Having used the power of deficit spending to rescue the economy, reduce inequality, strengthen the job market, and raise real wages, then pivoting to the “sound finance” of deficit and debt vilification that will ultimately *reverse* all those gains.
None of what Bidenomics has achieved so far is attributable to deficit and public debt reduction.
This purely *political* false narrative led to the debt-ceiling fiasco.
Entrenching it as fiscal policy will undermine spending on the nation’s goals, including on climate change.
Dec 21, 2021 • 9 tweets • 2 min read
“Joe Manchin has refused to acknowledge the bankruptcy of Clinton-era fiscal orthodoxy” because the Biden administration hasn’t acknowledged it either.
In fact, they double-downed on the very same deficit/debt bankruptcy from the outset.
Most of Manchin’s reasons (excuses) for blocking BBB are financial, and derive directly from the faulty economic framework embraced by Biden and his team.
That framework of deficit/debt hysteria and “pay fors” has handed Manchin and others their most powerful weapon against BBB.
Mar 4, 2021 • 12 tweets • 3 min read
The vast majority of Americans have been taught, and thus believe, that the U.S. government really does borrow, that the result really is debt, and that it all must be “paid for” and, ultimately, “paid back.”
These core beliefs underpin their understanding of deficits and debt.
It’s reasonable for them to believe this for two reasons: that’s the way it works for them — to spend in excess of their resources, they must borrow, pay for items, and pay back what was borrowed.
And they’ve been reminded repeatedly that the rules apply to government as well.
Mar 2, 2021 • 7 tweets • 2 min read
This piece contradicts (correctly) the Treasury Secretary’s insistence that investment in permanent infrastructure — which, of course, must include addressing the climate crisis — must be paid for with tax increases to avoid increasing deficits.
bloomberg.com/opinion/articl…
Essential to understand that the piece reinforces mainstream nonsense about U.S. government spending.
To wit, “deficit neutrality” — deficits must be “paid for” by tax increases or spending cuts — remains the holy grail: “theoretically sound” — just politically “impractical.”
Jan 28, 2021 • 7 tweets • 2 min read
The new mainstream macro consensus is that deficit spending makes sense now: we can “go big” and borrow because interest rates are low. And, while the public debt is not an issue now, it could be long term.
Only one problem: like the old consensus, the new one is pure bullshit.
Long time deficit hawks, including Fed chairs and Treasury Secretaries, pat themselves on the back to growing accolades of supporters.
But, like most of mainstream macro, the consensus and its broad acceptance is downright embarrassing and detrimental to the nation’s future.
Jul 15, 2020 • 6 tweets • 1 min read
What’s new about “The Deficit Myth?”
It shatters the faulty, destructive consensus about money, interest rates, deficits, and debt that mainstream economics has allowed to metastasize and block public purpose spending.
Don’t let ass-covering naysayers gaslight you otherwise.
Naysayers insisting that the policy prescriptions found in “The Deficit Myth” can mostly be found also in mainstream sources, and woven into a similar narrative is a curious self-own.
Since they were INSTEAD used to build the false mainstream narrative the book seeks to debunk!
Oct 24, 2019 • 12 tweets • 3 min read
Suppose a large new federal program can be implemented by deficit spending alone (with no tax increases) without causing inflation.
Would you nevertheless require its proponents to identify tax increases to “pay for” the program, knowing that such taxes would be deflationary?
Of course not. But that’s exactly what M4A proponents are being required to do by centrist Dems and the MSM.
See, it’s not at all clear that deficit spending to implement M4A w/o tax increases would necessarily cause inflation.
Anyone who tells you otherwise is just guessing.
Sep 18, 2019 • 7 tweets • 2 min read
What to think about mainstream economists who warned against the dangers of deficits and debt now proposing adding trillions of dollars to each because infrastructure “pays for itself?”
Something stinks in mainstream Econ. Don’t fall for the “this time it’s different” bullshit.
Same goes for “financing” a GND. Throughout the decades that mainstream Econ vilified deficits & debt, it ALWAYS made sense to deficit spend (& increase public debt) for infrastructure and climate change. As well as ALL public purpose spending.
The fear mongering was ALWAYS BS.
Feb 28, 2019 • 6 tweets • 2 min read
THERE IT IS!
In layman’s language, there’s the core logical error made by those insisting that the US government must tax or borrow to spend:
“The US government needs dollars to spend.”
NO, IT FUCKING DOESN’T.
Just the opposite. When it spends, it CREATES money.
When Congress authorizes and appropriates to finance, say, a GND, the Treasury doesn’t gather up some of our tax dollars (which don’t exist btw) or borrow some of our untaxed dollars to do so. That’s pure fantasy.
It just spends the necessary money by creating it.
