Low interest rates, combined with printing too much money, is simply a tax on people who save money. It punishes the most responsible Americans, at the expense of the "how much a month" crowd who like to live in perpetual debt.
US Federal Reserve raises interest rates for first time since 2018
591–600 of 693 posts
Re: US Federal Reserve raises interest rates for first time since 2018
#592Earlier quoted context omitted.
Its still closing a unofficial loophole that lower income people relied on. That counts as part of the war to extract every last penny on the poor. There are a lot of other nefarious things in the bill such as requiring manufacturers to install a device to monitor the driver if they are impaired(beyond 2026). This will lead to fines that will lead to further eroding of what little wealth the poor already have left. W…
It's not a loophole it's tax fraud. Not reporting your income does not make it legal. In the end if your income is low enough you'll mostly be offset by the standard deduction anyway.
True. I don't think the IRS pursued this heavily.
>In the end if your income is low enough you'll mostly be offset by the standard deduction anyway.
The point was that it is another barrier introduced to extract as much value from the lower classes as possible. In fact you had missed the original point completely.
Re: US Federal Reserve raises interest rates for first time since 2018
#593Earlier quoted context omitted.
I assume you're taking a swipe at Team Red, but do remember that the recent TCJA had a provision that removed the ability to deduct state/local (SALT) taxes from your Federal taxes due, above a certain amount. One could consider this very fair: if you argue for higher (Federal) taxes, you should pay what's owed, regardless of what you paid to any local governments, especially since you have much more control over whe…
Somehow the Red "cut the taxes and spending" never give back the net inflows they take from Blue states.... Blue states have higher taxes to care for their citizens so they have to take less in Federal handouts.
There aren't really blue states. Only blue cities.
https://miro.medium.com/max/1127/1*86sURhsiwekHqCuqjbFnkQ.pn...
Re: US Federal Reserve raises interest rates for first time since 2018
#594Earlier quoted context omitted.
The quiet part would be "We need to put a few million people out of work to cool things off."
It's the reason that the Fed is nominally non-political. Nobody wants the medicine, even if they need it.
This is the first time labor has been making real gains compared to productivity in a long time. I don't think it's surprising that capital would prefer to layoff a few million plebs to remind the rabble where they stand.
Re: US Federal Reserve raises interest rates for first time since 2018
#595Earlier quoted context omitted.
An important point to keep in mind when talking about MMT in a policy setting is that the people who will implement it don't care about theory and will make a series of short-term politically expedient and/or vaguely corrupt decisions. If they implement MMT, there are good odds that it will just look like money printing. It doesn't really matter what the academic plan is, the policy isn't going to follow it. Much lik…
I mean it did make everyone better. The COVID pandemic could have really wiped out a lot of people and we printed money and it helped. It’s the austerity people that have never cared about anything but their ideology. Austerity for austerity’s sake has caused unfathomable human misery in the globalization era. Right now the labor market is good for workers. That is good. Getting there has always opposed by the ruling…
> I mean it did make everyone better. The COVID pandemic could have really wiped out a lot of people and we printed money and it helped.
Yeah, Helped transfer wealth to the wealthy!
Re: US Federal Reserve raises interest rates for first time since 2018
#596Earlier quoted context omitted.
Irrespective of its economic merits, any policy which depends on a competent and upright Congress does not inspire confidence. It feels like it's bound to be one of those "True MMT Hasn't Ever Been Tried (TM)" things.
MMT isn't a thing to try or be tried: it's not an ideology or set of policies or even policy goals (there is a very loose correlation between adherence to MMT and certain progressive policy goals, but they aren't the same thing.) MMT is an understanding of factual nature of the environment in which government operates . Reduced to one sentence it is “the entire concept of fiscal balance is play-acting as if the gover…
Wouldn't the USD as a world currency and petrodollar make the USD a bad candidate for MMT?
Re: US Federal Reserve raises interest rates for first time since 2018
#597An interesting aspect of this is that the endless printing of money in the last few years was a sort of stress test of modern monetary theory, which has been seeing lots of discussion in those same years. I never quite understood how this theory would work while avoiding inflation, and what's happening now seems to at least be related - https://www.nytimes.com/2022/02/06/business/economy/modern-m... Conceptually the…
An important point to keep in mind when talking about MMT in a policy setting is that the people who will implement it don't care about theory and will make a series of short-term politically expedient and/or vaguely corrupt decisions. If they implement MMT, there are good odds that it will just look like money printing. It doesn't really matter what the academic plan is, the policy isn't going to follow it. Much lik…
The exact same thing happened with Reaganomics/Supply Side Economics. The economic brains behind these ideas was Milton Friedman, and while he did strongly and aggressively advocate for supply side economics, he also had quite a lot about to say the consumer side of things and advocate for, among other things, a negative income tax [1] that in practical terms is essentially a basic income that solves many of the major problems with things like welfare.
I'm not advocating for a basic income (or supply side economics), but simply emphasizing that what you said is completely true and one of the many risks of MMT. Even if MMT might be theoretically viable, in practice it's going to be interpreted as something not far from a pseudo-intellectual justification for arbitrary levels of debt/monetary inflation.
Re: US Federal Reserve raises interest rates for first time since 2018
#598An interesting aspect of this is that the endless printing of money in the last few years was a sort of stress test of modern monetary theory, which has been seeing lots of discussion in those same years. I never quite understood how this theory would work while avoiding inflation, and what's happening now seems to at least be related - https://www.nytimes.com/2022/02/06/business/economy/modern-m... Conceptually the…
"Conceptually the answer in the theory is to suck up the excess money with taxes" Huh, why is that the answer? Why wouldn't the conceptual answer be "do the opposite", i.e. sop up the excess liquidity by removing money from the money supply, by doing things like raising interest rates, increasing bank reserve ratios, and selling some of the trillions of dollars of securities already on the Fed's balance sheet? The la…
MMT would say that the government takes the money in taxes, then just burns it
The money the government spends is then unrelated to that which it taxes
Re: US Federal Reserve raises interest rates for first time since 2018
#599Earlier quoted context omitted.
Nope, but the military gets a pass in most years as at least being competent. Most Americans believe that most government agencies are both incompetent and profligate.
The US military hasn't won a war in about 20 years.
That's too broad a brush. I'm against militarism, but what engagement against conventional forces has the US military lost in the last 20 years?
I can't speak to dealing with insurgencies but it's clear to me that a mix of various administrations policies was to blame more than military effectiveness.
I mean was it the military or Paul Bremmer and co who disbanded the Iraqi military and unleashed a lot of chaos?
Re: US Federal Reserve raises interest rates for first time since 2018
#600Earlier quoted context omitted.
A generation ago, progressive cycles of deficit spending and taxation had put the top tax bracket in the US at 90%. Still, there was persistent inflation - and worse high unemployment. The belief was that the Federal Government had grown too large in the economy and needed to be "starved". To what extent government austerity vs. new monetary policy moved the needle for the US economy is unknowable. However many Ameri…
> It's rare that anyone pitches the government as competent outside of military spending Genuine question - do people see military as competent when it comes to spending?
No, but there is a method to the madness. Military units are often given an allowance for the year. One of the responsibilities of a commissioned officer is to often manage the unit's finances. Being in the Navy, my Bosun manage my aviation fuel division's finances. The captain of the ship manages the ships finances. Or at least, they sign it all off. If units do not use their budget, their budget get slashed last year. Essentially money mismanagement comes down in many way to some rules implemented awhile back (80s I believe during the Reagan admin). If a government agency or group does not use the full amount allotted, then they are at risk of loosing some next time they are allotted money. What this has done is create a system that encourages government agencies and military units to use up the budget no matter the cost. You don't wanna be the guy who had money left over last year, so your budget got cut, not it is this year and you had 4 major equipment casualties and because your shortened budget, can't afford for the unit to buy parts. Then, this makes you looked incompetent and hurts your career.
This is why the fuels division I was in, we often bought new desk chairs every year and $500 pocket knives and parts we would never need. Literally had to throw parts away to make room for the new parts.