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You might want to think twice before picking an Internet fight with a University of Chicago trained economist. Friedman's "We are all Keynesians now," quoted by Nixon with limited but not zero understanding of the issues, referred to a narrow technical point on which Keynes was right. We are not all Keynesians in the ordinary English language sense of believing that government has the ability and responsibility to manage the economy through fiscal policy.
I don't know what Ricardo would do, but based on his own theories and statements he should save up to pay taxes that will come due in future periods because of deficits incurred in the current one.
We the people can and should save. Businesses might save. The Federal gov't sovereign in its own money has no reason to save.
Are the new Trump tax cuts really tax cuts, or are they tax subsidies?
The federal government is running a $700 billion deficit. The tax cut will result in an immediate loss of revenue on the order of $140 billion for 2018. That $140 billion must be financed by the selling of Treasury bonds. Interest on those bonds will be paid for by taxpayers for years to come.
In 2017 Bob paid $10,000 in federal taxes. In 2018, his taxes will fall to $8,000 due to the tax cut. Bob thinks, great, I get to keep more of my own money. But in reality he has received a $2,000 subsidy from the government in the form of publicly financed debt. This is exactly what the government is doing: they are using public debt financing to help subsidize people's tax bills.
The only time a tax cut allows you to "keep more of your own money" is when the government has a budget surplus. In that case the tax cut can be granted without the need for public debt financing and no subsidy is involved.
You're about 156 years too late with that nomenclature since income taxes have always been subsidies.
Debt was in the trillions during Clinton administration, increased to $9 trillion by Bush 43, and zoomed to $20 trillion by the end of the 2nd Obama term. Keynesian economics?? Hell no.
We're all Modern Monetary Theorists now, as government spending and receipts are permanently decoupled, with apparrently no serious ill-effects.
So far.
Better get used to it, folks. Both Dems and Repubs sure have!
PS ..This doesn't even include unfunded future liabilities like Federal pensions, Medicare, SS, Medicaid and other welfare subsidies. That will be a future fiscal fiasco that is likely to be 'solved' by money creation on a whole 'nother level. Hope I live to see it play out.
So, the effects that you have suffered from the unfunded future liabilities of fifty years ago have actually been nil. Got it. I haven't suffered any either, so we have that in common.
Letting people keep more of their own money is a subsidy? Also, Debt to GDP(the only measure that matters) SHRANK this year by a percent. Growth is the only path out of debt.
Letting people keep more of their own money is a subsidy? Also, Debt to GDP(the only measure that matters) SHRANK this year by a percent. Growth is the only path out of debt.
Lower federal taxes is always good IMO.
There will be a projected deficit due to the new tax plan at some point in time. So that is new money going somewhere into the private sector, a central subsidy.
Debt to GDP may be what matters to you, IMO our middle class standard of living is more important.
So, the effects that you have suffered from the unfunded future liabilities of fifty years ago have actually been nil. Got it. I haven't suffered any either, so we have that in common.
Yes, that is correct. But I worked and lived thru the postwar boom years when Medicare /Medicaid were not as heavily in use. We were paying then, not collecting. Now it's reversed.
Today, and going forward, money creation via ever expanding debt is filling the shortfalls to an even greater extent than ever with no ill effects on the haves. So I am 'in high cotton' and living the good life.
The have-nots may have a different opinion.
Like I said MMT describes this model and so far the world hasn't ended.
We're all Modern Monetary Theorists now, as government spending and receipts are permanently decoupled, with apparrently no serious ill-effects.
So far. Better get used to it, folks. Both Dems and Repubs sure have!
I like your observation that spending and receipts are now permanently decoupled. If that's the case, then politics boils down to where the deficit dollars get spent. Dems = more of the deficit pie to raise the standard of living of the lower and middle class, while Reps = deprive the bottom classes of spending and spend more at the top.
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