Biden’s economy

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:BREAKING: Moody’s cuts U.S. credit outlook from stable to negative.

This is a direct result of Republicans recklessly playing games with the debt ceiling.

+1 Biden and congressional Democrats told the Republicans this would happen and they either don’t care or want it to so PPs can make doomer posts like these pretending that the economy with its 4.9% 3Q GDP growth is bad.

+2 They can’t complain about the mess the GOP hasn’t made.

[Anonymous]

Anonymous wrote:
Taxation doesn't take money "out of existence," for one.

Sure it does. That money isn't sitting in Scrooge McDuck's vault. It doesn't do anything until the government spends it into existence again.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
Taxation doesn't take money "out of existence," for one.

Sure it does. That money isn't sitting in Scrooge McDuck's vault. It doesn't do anything until the government spends it into existence again.

No, it doesn't. Of course it doesn't sit in the form of gold coins in Scrooge McDuck's money bin, but it very much exists on a ledger. Why do you think breaching the debt ceiling has such high stakes? The Treasury can't just decide to create a few extra dollars out of thin air.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Taxation doesn't take money "out of existence," for one.

Sure it does. That money isn't sitting in Scrooge McDuck's vault. It doesn't do anything until the government spends it into existence again.

No, it doesn't. Of course it doesn't sit in the form of gold coins in Scrooge McDuck's money bin, but it very much exists on a ledger. Why do you think breaching the debt ceiling has such high stakes? The Treasury can't just decide to create a few extra dollars out of thin air.

Because Congress arbitrarily imposed that limit.

The U.S. Government absolutely can decide to create a few extra dollars out of thin air. Where do you think the dollars came from in the first place? They weren't dumped into the Garden with Adam and Eve. The ledger is a record of money the Government has spent into existence and taxed out of existence.

I know that's not normally how we think of such things, but it's an accurate statement of what is happening.

[Anonymous]

And, to follow up on that, the problems don't come from creating new dollars. The dollars themselves aren't the issue. The issue is when the government spends out of proportion to the productive capacity of the economy generally.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Taxation doesn't take money "out of existence," for one.

Sure it does. That money isn't sitting in Scrooge McDuck's vault. It doesn't do anything until the government spends it into existence again.

No, it doesn't. Of course it doesn't sit in the form of gold coins in Scrooge McDuck's money bin, but it very much exists on a ledger. Why do you think breaching the debt ceiling has such high stakes? The Treasury can't just decide to create a few extra dollars out of thin air.

Because Congress arbitrarily imposed that limit.

The U.S. Government absolutely can decide to create a few extra dollars out of thin air. Where do you think the dollars came from in the first place? They weren't dumped into the Garden with Adam and Eve. The ledger is a record of money the Government has spent into existence and taxed out of existence.

I know that's not normally how we think of such things, but it's an accurate statement of what is happening.

Yes, it's artificial and arbitrary, but that's not the point. The point is that, contrary to your posts, the Treasury cannot create dollars out of thin air. Yes, they're fiat. Yes, they're backed by nothing but the promise that the US repays its debtors. None of that implies that ledgers aren't real or that dollars are taxed out of existence until they're spent.

Sincere question: are the dollars your employer pays you taken out of existence when they're deposited in your checking account?

[Anonymous]

The taxed out of existence, spent into existence doesn't seem very helpful as a way to think about this.

I think this is just a way of saying that taxes extracted from the real economy just hang around on the government balance sheet until the government spends it, putting it back into the real economy. It is unclear what is useful about this insight.

[Anonymous]

Anonymous wrote:

Sincere question: are the dollars your employer pays you taken out of existence when they're deposited in your checking account?

You're missing the point. My employer isn't the government which creates the dollars in the first place.

[Anonymous]

Anonymous wrote:The taxed out of existence, spent into existence doesn't seem very helpful as a way to think about this.

I think this is just a way of saying that taxes extracted from the real economy just hang around on the government balance sheet until the government spends it, putting it back into the real economy. It is unclear what is useful about this insight.

The utility is getting away from the notion that there is anything terribly beneficial about a "balanced" budget. The government isn't a business or a household. Expenditures just have to maintain a more or less steady relationship to the productive capacity of the economy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Sincere question: are the dollars your employer pays you taken out of existence when they're deposited in your checking account?

You're missing the point. My employer isn't the government which creates the dollars in the first place.

You're so, so close to understanding. The Treasury doesn't create dollars, either!

[Anonymous]

Anonymous wrote:

Anonymous wrote:The taxed out of existence, spent into existence doesn't seem very helpful as a way to think about this.

I think this is just a way of saying that taxes extracted from the real economy just hang around on the government balance sheet until the government spends it, putting it back into the real economy. It is unclear what is useful about this insight.

The utility is getting away from the notion that there is anything terribly beneficial about a "balanced" budget. The government isn't a business or a household. Expenditures just have to maintain a more or less steady relationship to the productive capacity of the economy.

The government isn't a business or a household, but debt has a cost. To pretend otherwise is fanciful. And please, don't mistake me for a Republican or a deficit hawk or a national debt doomer.

When GDP growth outpaces interest rates, these costs are basically negligible - and this is where we've been for some time now. But when interest rates rise, the cost of servicing debt is a real drag. Servicing newly-issued 30-year bonds at 5% is a lot costlier than when they were at 2%.

I hope this plea isn't in vain; don't get suckered by MMT proponents. It's truly a load of BS. But perhaps I've misread the subtext of your posts.

[Anonymous]

Closing in on $34 trillion...

[Anonymous]

Anonymous wrote:

Anonymous wrote:
Taxation doesn't take money "out of existence," for one.

Sure it does. That money isn't sitting in Scrooge McDuck's vault. It doesn't do anything until the government spends it into existence again.

Federal revenue doesn't sit in piles in a cave hoarded and guarded by a greedy dragon. It gets turned right back around to be invested into America's infrastructure, its wellbeing, and its economy. And the return on investment for federal spending is tremendous.

[Anonymous]

More great news for the economy: Gas prices are seeing a significant drop ahead of Thanksgiving: https://foxbaltimore.com/news/local/gas-prices-drop-15-cents-in-baltimore-gasbuddy-survey-says

It's already below $3 in 11 states.

Thanks Joe!

[Anonymous]

This seems like a repeat almost every month, yearly inflation down again. From 3.7% to 3.2%.

There was a 0% monthly increase. Good news, but I still don’t see the Fed lowering interest rates for a while, best case is next summer but that is even unlikely.