Sunday, 9 April 2017

Cures for stagflation, my opinion



In contrast to Roger Mitchell's deficit spending + high interest rates, here's how I would tackle stagflation.

First of all, rationing, if the cause is heavily supply-side intense.
If it's not, I'd do the following:

-increase capital requirements for banks (because this is more effective at putting drag on the growth in bank debt than rate hikes)

-increase the Land-value-tax (Why? The land value tax in and of itself puts drag on the economy, but it also has other beneficial effects; it lowers production and consumption costs. It leaves the landowner with less bargaining power. People pay less rent to the landowners, which leaves more income to be orientated towards investment and consumption. At least, that's how I see it in theory)

-see which sectors struggle with demand and underemployment, and adjust (increase) Government spending and (lower) other taxes appropriately (aka deficit spending)

Messing around with interest rates, you're modifying the cost of settlement payments. This doesn't deter Animal Spirits. If people feel comfortable with their level of income, and decide that going into debt is good now to achieve their aims, then they're gonna do it. If more and more people feel this way, you got an economy that officially looks good, which leads to more private debt and more private consumption.
Now, mainstream view is that OMF net Government spending is inflationary. I say that's bullshit. If OMF (Overt Money Financing) isn't inflationary, then I don't see how higher interest bearing bonds or higher IOR will be less inflationary. During the war bonds era, they were used to drain liquidity and as a psychological tool to improve the spirits of the population. In most cases, when you went to the market, some goods were rationed. And you also had price controls.
I don't think Mitchell's higher interest rates would solve the inflation part. This is just my 2 cents. Feel free to add your own thoughts.

Friday, 7 April 2017

Trump commits an act of war against Syria

It's truly a fucked up world, when republicans and democrats are more of a threat to world peace than neo-nazis...
http://mobile.abc.net.au/news/2017-04-07...ia/8425132
And yes, Hillary would have done the same thing.

Also, THIS!
Now that Obama’s poll numbers are in tailspin – watch for him to launch a strike in Libya or Iran. He is desperate.
~Donald Trump, October 2012

Thursday, 6 April 2017

Consumption taxes are fine? No, they're not

Very disappointed with Bruening's reasoning here.
http://mattbruenig.com/2017/04/05/why-co...-are-fine/

I reply to him via twitter the following:

--- Matt, by regressive, critics mean that the levy is the same for the rich & poor. The rich won't feel the tax, the poor will.
Also, since you're talking about the US, US Federal Taxes don't fund anything. They simply create demand for the US dollar.
State governments, unlike the Fed Government, are constrained in their spending by what they can borrow, tax, and receive from the Fed Gov.
So if you want state governments to levy a 10% VAT, that's fine. But there's absolutely no reason why the Fed Gov should levy a VAT.
If you want to tax the rich, levy a progressive tax on all incomes, that only the opulent minority will qualify to pay. ---

Whether he realizes or not, Bruening is actually making the case for flat taxation, invoking that a person's tax obligation is proportional to his or her spending. Proportional equity. So the rich pay more, the poor pay less, at the same tax rate. Very strange to see this type of argument from a progressive.

Wednesday, 22 March 2017

Life is bitter when you see it clearly as a Deficit Owl

People who complain that Trident is the reason they can't have housing & health care are so aggravating. How exactly does a nuclear submarine deprive you of bricks, mortar, medical doctors, and pharmaceuticals? Similarly, people who complain that the Welfare system is the reason why they can't have smaller taxes are aggravating as well. How does a food stamp or a minimum pension spent on output deprive you of extra numbers on your balance sheet?

Tuesday, 21 February 2017

How the UK Left Lost the Working Class

Chris Beck: There seem to be some areas of legitimate concern, but have they made Islam the scapegoat?


Steve Hall: The Islam issue has allowed UKIP to deflect the blame from global neoliberalism, the true source of the working class’s problems. This is the principal service UKIP offers to the establishment.

Read the full interview here.

Wednesday, 8 February 2017

Concerning Romania & all interested outsiders

The Constitutional Court of Romania just bitch-slapped the opposition, the prosecutors, and the superior council of the magistrates. The prosecutors & the magistrates DON'T MAKE the law. They APPLY the law. There is no conflict between the Executive and the Judiciary regarding Government decree nr 13.

Monday, 6 February 2017

The best article I've read, explaining the shit going on in Romania

Bogdan Herzog nails it.
http://katehon.com/article/muddy-waters-romanian-politics

Update. So I found out that this think tank is a Russian far right revisionist think tank. 😠 I've read many articles in mainstream publications, and all of them were lacking in key facts. This article is by far the most pertinent I've come across.