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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Dems hand advantage back to Reps by delaying tax cut action

Posted by WARREN MOSLER on September 23rd, 2010

Blatantly delaying action on something that can help the economy for presumed political gain is a blunder equal to the Republicans saying they would oppose the proposed Obama tax cuts.

It doesn’t get more insulting to the voters than this.

Vote on Bush Tax Cuts Is Now Unlikely Before Nov. Elections

Congress will not vote on extending Bush-era tax cuts before the November elections, a U.S. Senate leader said Thursday, reflecting fear among some Democrats that it could hurt their chances at the polls.

“The reality is, we are not going to pass what needs to be passed to change this, either in the Senate or in the House, before the election,” said the Senate’s assistant majority leader, Dick Durbin.

Durbin told reporters he saw no hope for a quick decision on the controversial tax cut question in the current tense political atmosphere.

He said the final decision on the timing of a vote in the Senate would be made by Senate Majority Leader Harry Reid.

Durbin said the likelihood of having an early vote was “very, very slim.”

13 Responses to “Dems hand advantage back to Reps by delaying tax cut action”

  1. Andrew Says:

    Mr Mosler,

    I find your site an excellent resource and am largely convinced by the arguments for neochartalism/modern monetary theory (MMT).
    I have an academic question.
    Would Keynes have approved of modern monetary theory?
    Did he actually endorse Abba Lerner functional finance theory, on which neochartalism/MMT is based?
    My thoughts are here:

    http://socialdemocracy21stcentury.blogspot.com/2010/09/would-keynes-have-endorsed-modern.html

    Regards

    Reply

    WARREN MOSLER Reply:

    I’ve heard at one point he told learner he agreed with him but thought it would be dangerous if it were understood, or something like that.

    Reply

  2. roger erickson Says:

    have to upgrade my definition of political parties

    Republicans: (def), don’t understand operations, want to freeze [or even retract] policy, and unleash tactics
    AND HAVE ABSOLUTELY NO QUALMS ABOUT DOING SO!
    (always willing to risk your blood for their gain)

    Democrats: (def), don’t understand operations, want to limit or meddle in tactics, and unleash policy innovation
    BUT LACK THE SPINE TO ACTUALLY EXPLORE ANY OPTIONS! (at least since FDR)
    (afraid to risk anything for anything)

    repeat: the only way any progress occurs is when these two groups accidentally cooperate & coordinate – that gets more rare as net size of our electorate scales up

    sadly, most of our voters reading this over a Budweiser, or a Pabst Blue Ribbon, or “Milwaukee’s Best”, or some cheap Malt Liquor – don’t even know they’re being insulted; in fact, the typical sub PBR crowd actually thinks they’re receiving a compliment!

    Reply

  3. beowulf Says:

    In 1944 the Pabst Brewing Company, celebrating its one hundredth anniversary, wanted to do something that would identify it with a goal that was universally. Therefore, it sponsored a contest for essays on how to maintain high employment after the war.
    http://tinyurl.com/2duppal

    Both the contest’s winner (Herbert Stein) and the runner-up (Leon Keyserling) later served as Chairman of the Council of Economic Advisers.

    Reply

    beowulf Reply:

    LOL, sorry Roger when you mentioned PBR, how could I not mention the Pabst essay?(that link is to Herbert Stein’s memoirs).

    I see I cut a word when I pasted it, “a goal that was universally ACCEPTED”.

    Reply

  4. Rodger Malcolm Mitchell Says:

    The implications of monetary sovereignty (government creates money by spending; federal debt is not a burden on taxpayers; federal debt growth is necessary for economic growth) are pretty obvious, and should easily be understood by anyone. Yet, the media, the politicians and the mainstream economists don’t understand it.

    I’ve always felt it was a semantic problem, afflicting people who suffer from Anthropomorphic Economic Disease, but I wonder whether something else is going on?

    Any thoughts?

    Rodger Malcolm Mitchell

    Reply

    roger erickson Reply:

    “Anthropomorphic Economic Disease, but I wonder whether something else is going on?”

    my surveys indicate it is simply force of habit;
    you talk to the average Joe/Jane on the street – or even the average economist at the average institution – and they say that non-gold-std money thinking “seems so implausible”

    like any advertising, most people need to hear something 12x before getting familiar & comfortable with it; recognizing, of course, that 98% of people will do anything in their power to avoid thinking

    how long did it take for various historical facts to become popularized?

    My bet:
    if you get some movie star to champion MMT, blondes will be passionate believers tomorrow!
    If you could associate prayer with MMT, the sea of red ink would miraculously part.

    Reply

    Matt Franko Reply:

    Roger,

    “If you could associate prayer with MMT”

    Ironically, I see much Biblical congruence with MMT, but unfortunately many persons in ‘leadership’ in popular Christendom seem just as ignorant (or deceptive) about economic reality as the average j6p.

    This is a new book
    coming out from a guy who broadcasts on Christian radio all across the US I think daily…more ‘bad news’. Locally, he is promoting an upcoming ‘free’ seminar at the 20,000 seat Verizon Center in DC that will focus on this debt doomsday book he is releasing in the next weeks…sad.

    Also, with gold hitting new highs this week, I heard again, the AM airwaves lit up with new gold selling commericals on the talk shows that appeal to many ‘Christian Conservatives’. (Hannity & Hugh Hewitt that I heard at least and I would safely assume the others too)

    They are taking advantage of people imo, the message out there seems to be going in the exact opposite direction of where it should be.

    Resp,

    Reply

    Tom Hickey Reply:

    Matt, this gold thing is going to end badly for a lot of people, just as it did in the ’80′s, when the public went wild over the stuff. This “heaven” is going to come crashing down to earth eventually, disappointing a lot of true believers.

    roger erickson Reply:

    ps: Bill Mitchell seems to have covered this very topic today; although in reference to a different country

    We can conquer unemployment
    http://bilbo.economicoutlook.net/blog/?p=11650

    September 24th, 2010
    Many readers have written to me asking me to explain the British Treasury view during the Great Depression. This view was really the product of several decades of literature which culminated in the political process during the 1929 British election where the number one issue of the day was mass unemployment. The Treasury View was thoroughly discredited in the immediate period after it was articulated and comprised one side of the famous Keynes versus the Classics debate. When propositions – such as the Earth was flat – are shown to be incorrect constructions of reality the ideas cease to be knowledge and instead become historical curiosities which allow us to benchmark how far our education systems have taken us. However, the same cannot be said for my profession.

    Reply

  5. Unforgiven Says:

    The common guy doesn’t get to print his own currency and has learned to operate within a “gold standard” of sorts. It boggles the mind to think that US Government finances are otherwise. Politicians binding common fears to garner votes, sell your jewelry commercials, fear mongers going for market share. MMT is a bit of a small voice in the midst of all that.

    Reply

  6. Mike Valotta Says:

    With taxes for revenues at the federal level being truly obsolete, it’s ridiculous they are discussing this issue this long.

    Reply

  7. room rental Says:

    That is very natural, as it can affect their votes, congress will not be voting on extended bush tax cuts.

    Reply

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