Obama Nation- Throw Social Security, Medicare under the Electric Bus

“You’re the type that would complain if they hung you with a new rope.”

Hopefully this entire administration and Congress will go down in history as the last out of paradigm regime that nearly succeeded in turning the US into the next Japan, which now includes the drive to become a net exporter, before the lights came on and every lived happily ever after.

Meanwhile, it’s more of the same, with Paul Ryan ratcheting up the fear mongering after taking the hand off from President Obama, specifically stating we were going to be the next Greece if didn’t take immediate proactive measures.

And, of course, absolutely not a peep of criticism from any politician, the media, or headline economist- hawk or dove- on that operational absurdity.

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83 Responses to Obama Nation- Throw Social Security, Medicare under the Electric Bus

  1. Jim says:

    Yes, of course. Hence the post.

    Reply

  2. Jim says:

    Is Bernanke Triggering Another Run on the Dollar?
    Treasury Yields are Blinking Red

    By MIKE WHITNEY

    [...]

    The United States will not default because it pays its debts in its own currency, (and the Treasury can always just print more money) but the prospect of a ratings downgrade is quite real. That means it would cost considerably more to finance the debt. Also, long-term interest rates will rise sharply. That will crimp consumer spending, slow economic activity, and deal a death blow to the struggling housing market.

    Bernanke’s playing a dangerous game. If he’s not careful, he could trigger a run on the dollar.

    http://counterpunch.org/whitney01282011.html

    Reply

    Tom Hickey Reply:

    “Bernanke’s playing a dangerous game. If he’s not careful, he could trigger a run on the dollar.”

    Uh, that’s the idea. The dollar is too high in the opinion of policy makers. President Obama says that he wants to double exports in five years. The notion of the “US becoming more competitive in the global market” place is code of the dollar depreciating significantly. If other countries won’t let their currencies appreciate in order to keep their export advantage, then the US will drive its currency down. There’s an old saying among the wise and wizened: “Don’t f*ck with the eagle.” :)

    Reply

  3. ds says:

    Best blog-post title ever!

    Reply

    WARREN MOSLER Reply:

    thanks!

    Reply

  4. GLH says:

    If any of you are going to run for political office or start a new party, or anything, the first thing you had better do is figure out how you are going to handle the main roadblocks to a real campaign: gay rights, women’s rights, civil rights, patriotism, religion, gun control, abortion, and just about any other thing that the two political parties hold onto to keep bigots and fools in line. It isn’t that I don’t have feelings about these issues, but it is clear that they are just used to keep our minds off the policy agendas that are pushed by the big corporations – especially finance.

    After all, if I were unemployed, you might think I would be voting for someone promising me a job, but I would probably be more worried that someone else was getting treated better that I. Sad, but true.

    Reply

    beowulf Reply:

    Social policy is a state issue, economic policy is a federal issue. If you don’t think gays should smoke pot in church, write your governor.

    Reply

    Tom Hickey Reply:

    :Social policy is a state issue, economic policy is a federal issue.”

    Not entirely. The Civil War decided that, and Rand Paul now wants it rolled back.

    Reply

    beowulf Reply:

    You’re right of course, protecting civil rights should remain a federal issue (but a bumper sticker only has room for so many words). :O)

  5. Senexx says:

    Exports are usually a cost, I agree with the MMT paradigm, but not necessarily. E.g.

    If you export wood and they send that same wood back as furniture, that would be a benefit.

    So therefore the export of the wood is of less value than the import of the wood. So therefore exports are not necessarily a cost.

    Reply

    WARREN MOSLER Reply:

    if you just send the wood out to be processed it’s not supposed to be counted as an export

    if you cut down trees and just sell the wood, that’s an export, which is a real cost.

    if you import furniture, you get the benefit of the furniture, a real benefit

    Reply

    Senexx Reply:

    Thanks Warren, that clarifies it a little bit.

    Reply

    Ryan Reply:

    The lumberjack gets rich from exporting the lumber from his trees and buys cheap furniture. The craftsman at the furniture shop loses her job when it closes. Her town and school decays. She loses her house to the bank. The bank has a crisis and fails. The benefits and costs of the import aren’t distributed equally. So she joins the tea party and is ready to throw out the whole system. And the lumberjack is appalled at her insolence and tries to explain to her how the import has helped her increase her standard of living.

    Reply

    LetsGetItDone Reply:

    This narrative is a bit biased and misses many intermediate steps where things may have worked out very differently. For example, the Government might have passed Warren’s program to keep aggregate demand high, then the craftsman never loses her job because plenty of people want to buy good furniture and can afford it.

    Reply

    beowulf Reply:

    There’s also the fact that since the money doesn’t grow on trees, the guy with the chainsaw does have a boss. Lets see for every dollar in logging revenue, logging company’s value added is 45 cents, of which, employees get 21 cents, owner get 22 cents, tax man 3 cents.

    I hesitate to say how I know this for fear Tom Hickey will spend countless hours indulging his inner Wassily Leontief. OK OK, don’t tell Tom but… Carnegie Mellon has a rather cool Input-Output search engine for each sector’s economic and environmental impact.
    http://www.eiolca.net/

    ESM Reply:

    How can the tax man only get 3 cents? This must not be including income taxes on the employees and the owners.

    beowulf Reply:

    A better question is how 21 + 22 + 3 = 45 cents (rounding error) :o)

    But you’re right, I think they’re looking at corporate level taxation and not factoring in taxes at individual level. Personally, I don’t think there should be any corporate taxes since the earnings pass through to shareholders anyway (either directly as dividends or indirectly as capital gains).

    Tom Hickey Reply:

    Corporate tax is a VAT?

    beowulf Reply:

    No, its really a vehicle to facilitate corporate welfare. You can’t give corporate tax breaks if there are no corporate taxes.

    WARREN MOSLER Reply:

    In a good economy there is always a labor shortage and employers trying to steal employees from each other.

    Reply

  6. roger erickson says:

    jeez; Warren’s expended incredible efforts for well over a decade; we’re all standing on his shoulders

    quit complaining about what he does/doesn’t, did/didn’t, woulda/coulda/shoulda done, and just focus on what all can do next

    alignment & coordination solves all hurdles; it’s only a matter of time

    Reply

  7. mike valotta says:

    That’s what I’ve been doing. Posting articles/links on Facebook and emailing economists from all over the place. I sent an email today to my college professor.

    Reply

  8. Lisa says:

    Use Facebook. It is a viral social medium. If it were a country it would be the third largest in the world. Each person has an average of over 100 “friends”. Get a fan page and get people to “like” what you post. Facebook has tremendous built-in demographics to target your audience precisely. Get people involved in the issues you are exposing. Get them to see these are both important and interesting.

    Learn to use Linked-in. Also a tremendous resource. This is a way to reach professionals and intellectuals and managerial people.

    Obama’s team used experts in Twitter, and as a result got himself elected. Warren has the resources to hire experts in social media to spread his message. There is no more effective way to use the web.

    Reply

    LetsGetItDone Reply:

    I think you’re right. It’s only through the web that we’ll be able to compete with the legacy parties, since we’ll never have the money they have to get stuff into the MSM. We ought to start a tweeting campaign recommending 7 Deadly Innocent Frauds. That’s a great way to start getting to know MMT.

    Reply

  9. danw says:

    I think it is hard to keep focused on the big question. And for my money, the biggest question is this: how do we minimize unnecessary human suffering? Warren’s ideas, and those espoused by MMT, have the potential, at least in the near term, to minimize AMERICAN suffering. Austerity hurts, and it disproportionately hurts the poor. And it does so in quite a variety of insidious ways. But one example: How many poor people in America no longer have access to dental insurance, and thus have to have their dying teeth pulled rather than get a root canal. And….what is the result, for a young man or woman, of being sans tooth, or teeth? I know, sounds silly. But it’s not. And government “spending” lets people keep their teeth—both really and metaphorically.

    BUT, employing parts of MMT without the entire policy package is destabilizing. Without Warren’s ideas about strict regulation, loose monetary policies benefit the wealthy, not the poor. Class divisions widen. Markets become increasingly unstable. Social unrest pops (food riots in N. Africa, etc.) up. Why? Because people are suffering.

    My primary concern with regard to MMT is that without a full compliment of policies to also rein in the financial industry, MMT simply becomes another tool to be co-opted by the super-rich for their won gain…and more human suffering is created.

    Reply

    Ivan Reply:

    I’m not so sure. If tax cuts increase aggregate demand, that helps the poor and the rich. From a political perspective, the full MMT policy package is a non starter. I truly believe we need to start with tax cuts. At the very least, something positive is accomplished and you pick up support from a significant segment of the population. May not be optimal but certainly better than what we’ve got going on now in Washington.

    Reply

    danw Reply:

    @ Ivan

    Good point

    Reply

    LetsGetItDone Reply:

    I agree. But if we’re going to start that way, then the highest multiplier will be the payroll tax holiday.

    Reply

    roger erickson Reply:

    It’s up to us to select improvements (hopefully first), and up to others to select to emulate demonstrated leaders.

    Per Einstein, best way to teach is to be an example, if nothing else, a warning example.

    Ever see those signs above airline seats? Basically, “before trying to rescue others, put your own damn oxygen mask on”

    Best stimulus is an alluring option, followed closely by resources available to use, including coordination, the most powerful tool of all.

    Point being it’s best to perfect return-on-coordination policies here, so others will want to emulate us.

    Reply

  10. Ivan says:

    By the way, why didn’t the US go into bankruptcy when our budget deficit was 25% of GDP during World War II? Just a thought I had last night.

    Reply

    Ivan Reply:

    That was rhetorical. Just didn’t understand how Ryan could claim we were at risk of bankruptcy now but weren’t then.

    Reply

    beowulf Reply:

    Ivan, law professor Tim Canova wrote an article on just that topic a few months ago.
    From 1942 to 1951, the Federal Reserve was accountable to democratically elected officials. It was directed by the White House and Treasury to peg interest rates at three-eighths of 1 percent on short-term Treasury borrowing and 2.5 percent on long-term borrowing… the U.S. economy grew at a real annual rate of 15 percent to 20 percent and more than doubled in output during the war… The combined efforts of the Federal Reserve and the Office of Price Administration kept annual inflation below 3 percent for the final three years of the war.
    http://www.prospect.org/cs/articles?article=the_federal_reserve_we_need

    I guess we could live with GDP growth < 15% a year if it meant avoiding OPA price controls. :o)

    Reply

    beowulf Reply:

    New York Fed’s wartime chairman Beardsley Ruml (best known for inventing “tax withholding”) wrote an article a few months after V-J day that gives an insight to how economic decisionmakers thought back then. It was recently posted online by some Huffington Post writer, I forget who. :o)
    http://www.huffingtonpost.com/warren-mosler/taxes-for-revenue-are-obs_b_542134.html

    If America’s leaders during the war thought like Paul Ryan (or Barack Obama), America’s major export today would be Japanese army comfort women.

    Reply

    LetsGetItDone Reply:

    Comment of the Day. best barb I’ve heard hurled against Paul Ryan. Have to tweet that.

    roger erickson Reply:

    what happened in 1951? Ike?

    Reply

    macrosam Reply:

    1951 Accord (Fed regains “independence”)?

    LetsGetItDone Reply:

    I’ll take the 15% per year and the OPA price controls, thanks.

    Reply

    ESM Reply:

    Yeah, all those guns, bombs, tanks and planes really raised our standard of living. Good times indeed!

    Reply

    beowulf Reply:

    Actually they did. But for those guns, bomb, tanks and planes, we wouldn’t have been able to clean out the German patent office. Gute Zeiten Ja!

    Someone wrote to Wright Field recently, saying he understood this country had got together quite a collection of enemy war secrets, that many were now on public sale, and could he, please, be sent everything on German jet engines. The Air Documents Division of the Army Air Forces answered:
    “Sorry – but that would be fifty tons…

    http://www.wanttoknow.info/war/4610_secret_nazi_war_technology

  11. Ivan says:

    I’ve suggested this before and I will again. Warren…you know people who can get you a meeting with Paul Ryan through your days as a hedge fund manager. He’s a congressman. He’s reachable. He desperately needs to be educated. If you get that meeting, please focus solely on the need for tax cuts. If you focus on spending initiatives, he won’t listen.

    We can all sit around on this blog, generally in agreement with each other give or take a few points, and watch the economy implode. Alternatively, we can respect the adversary which in this case is the politicians of both political parties. Ryan isn’t stupid. Obama isn’t stupid. They hear things from economists with far better pedigrees than those on this blog and you can’t blame them for listening and thinking they’re right. We’re the people who are failing because we’re not doing a better job getting the message out. Maybe it makes us all feel good to think “Warren..you’re so smart. We agree with you so that makes us smart too!” What does that accomplish???

    Reply

    rvm Reply:

    IMO, neither Republicans nor Democrats will listen to Warren – he tried to compete as Democratic candidate from Connecticut for US Senate and was rejected. They are all corrupt and have other agendas.

    Mr. Obama came to power only because majority of American people – middle and low income class – were fed up with trying to make ends meet and wanted CHANGE. They were betrayed by President Obama.

    It is clear that nobody among today’s US political parties has the knowledge and the will to bring that CHANGE.

    Reply

    Ivan Reply:

    So we give up? Very few want Obama’s vision of “change”. Our politicians, if they have any background or knowledge of economics, learned traditional gold standard crap that doesn’t apply any longer.

    Warren wasn’t rejected by the politicians. He was rejected by the people, most of whom didn’t know he was on the ballot. That wasn’t the highest and best use of Warren’s time. Making an effort to educate those who are in a position to bring a meaningful change in thinking is something that Warren can do effectively.

    Reply

    rvm Reply:

    Giving up?! You are kidding, we are only warming up before the match. :-)

    Warren spent his time very well – 10 000 voted for him.
    Hey, that was the first MMT candidate for high US political office ever.

    Ivan Reply:

    All kidding aside, most of his votes had to have been from people just rejecting both parties or hitting the wrong button. I don’t think he got through to 10,000 people. Warren is a policy wonk. His best work can be done from the inside out.

    jason m Reply:

    At the very least, Warren’s run added serious credibility to his resume in regard to commitment to principles and involvement in the political process, which should help him get more access to those in power and in the media.

    Tom Hickey Reply:

    Ivan, I suspect that Art Laffer has already coached Ryan. Ryan is a deficits don’t matter as long as they come from tax cuts and military spending, but social spending is off the table kind of guy, just like Laffer.

    There are two factions to the deficit hawk crowd. First, there is the Austrian “sound money” Rol Paul contingent and secondly, there is the the Grover Norquist/Art Laffer bunch that want to use public disapproval of debt to beat down social spending while cutting taxes to the bone and raising military spending.

    Ryan is in the second group, which uses the first group to advance their agenda and is willing to throw them under the bus, too, in order to advance their agenda. Where was all the handwringing over debt and deficits when the Bush tax cuts were extended and the tax cutters were pushing for more? Ryan’s push for spending cut is aimed at giving SS to Wall Street, for which they have been salivating for some time. Kills two birds with one stone. Keeps the donors happy and kills the New Deal, making conservatives happy.

    Reply

    LetsGetItDone Reply:

    Tom, Warren’s program include payroll tax holiday, State revenue sharing, and the FJG. One of these is a tax cut program, the other two are spending programs.

    Tom Hickey Reply:

    Oops. My comment turned up in the wrong place. The navigation in comments is confusing.

    roger erickson Reply:

    Obama came to power because he was selected VERY EARLY ON to receive massive financial support from Wall St. Way before he started his supposedly all-powerful Twitter campaign, and way before he unseated Hillary as Dem nominee.

    Reply

  12. Joshua says:

    Interesting title…as a strong supporter of electric buses and a realist knowing that SS and medicare are not likely to be there when i retire in 30 years, i’m not sure what to make of your analogy.

    -joshua
    mr. electric bus

    Reply

  13. As I am 76 years old and have been fighting this battle for 15 years, may I be considered for the post of Elder Advisor for the new progressive party, except may we call it the “Monetary Sovereignty Party, or maybe the “Monetary” party? “Progressive” in many people’s minds is a euphemism for ultra left wing, bordering on communism.

    Rodger Malcolm Mitchell

    Reply

    rvm Reply:

    Agree, the name should be discussed very carefully – product’s name is very important for successful marketing.

    Reply

    peterc Reply:

    Maybe you guys could call yourselves the Capitalist Christian Coalition (CCC) to win votes. Or, equivalently, the Profits for Prophets Party (PPP).

    Then once you’ve won office, slip in the monetary sovereignty and commitment to science as surprise bonuses. :-)

    Reply

    jcmccutcheon Reply:

    Agree. Should be narrowly focused on macro policy, monetary reform, employment and price stability. Making it generic enough to draw support from all political spectrums.

    Reply

    beowulf Reply:

    “Making it generic enough to draw support from all political spectrums.”

    That’s the truth. If “bipartisan” means an insider coaliton (as conservative activist Grover Norquist put it, “bipartisanship is when the Republicans and Democrats get together to screw the people”), then what liberal activist Jane Hamsher termed “transpartisan” is an outsider coalition. Backbenchers (and voters) on both sides endorse a position that the leaders of both parties are against.

    The best recent example is the ad hoc coalition that blocked the 2008 bank bailout on its first vote in the House. The leadership of both parties– Pelosi, Boehner, Ryan et al– were whipping members to vote for Paulson’s bailout. The opposition ringleaders were CA Democrat Brad Sherman and CA Republican Darrell Issa (Bill Isaacs writes that he used Issa’s office as his base while he was lobbying against the bill with Dean Baker and Jamie Galbraith).
    http://www.nakedcapitalism.com/2010/10/guest-post-bill-isaac-vs-hank-paulsons-bailout-machine-how-the-former-fdic-chairman-almost-stopped-tarp-%C2%BB.html

    Reply

    roger erickson Reply:

    > If “bipartisan” means an insider coaliton (as conservative activist Grover Norquist put it,
    > “bipartisanship is when the Republicans and Democrats get together to screw the
    > people”), then what liberal activist Jane Hamsher termed “transpartisan” is an outsider
    > coalition. Backbenchers (and voters) on both sides endorse a position that the leaders
    > of both parties are against.

    Hey, I like it. That’s indirection that both biologists & programmers can recognize!

    beowulf Reply:

    “The [bank bailout] opposition ringleaders were CA Democrat Brad Sherman and CA Republican Darrell Issa (Bill Isaacs writes that he used Issa’s office as his base while he was lobbying against the bill with Dean Baker and Jamie Galbraith).”

    Speaking of Darrell Issa, the New Yorker just ran a profile of him that is certainly… colorful. He’s still my favorite Republican, I like politicians with convictions (especially when they’re plea-bargained down to a misdemeanor). :o)
    http://www.newyorker.com/reporting/2011/01/24/110124fa_fact_lizza?currentPage=all

    Reply

    WARREN MOSLER Reply:

    not Fed Chairman so you can determine interest rate policy?

    :)

    Reply

    LetsGetItDone Reply:

    Huh? The gutless progressives never met a budget surplus they didn’t like?

    Reply

  14. Dan F says:

    Krugman had a few posts that were critical of last nights speeches including his favorite target, Eric Cantor.

    http://krugman.blogs.nytimes.com/2011/01/26/shiny-lazy-people/

    Reply

    Dan F Reply:

    oops meant Paul Ryan… somehow I get them mixed up. ;)

    Reply

    LetsGetItDone Reply:

    What’s the matter? Can’t distinguish between dumb and dumber?

    Reply

  15. markg says:

    “not a peep of criticism from any politician”

    We know two of them have been educated on MMT. Lieberman and Bluhmenthal. Bluhm was just elected. He doesn’t have the weight to throw around and is probably looking out for his future (which is no excuse in my book). But Lieberman is 1)senior, 2)an independent so doesn’t have party interest, and 3)not seeking reelection. He is the perfect candidate to take a stand and advance MMT. He knows better but still stands by idle and watches millions of Americans lose jobs and homes. I am adding him to my list of traitors.

    Reply

    ESM Reply:

    There are certainly more innocent explanations available.

    For example, perhaps Lieberman doesn’t buy into MMT completely. Or perhaps he doesn’t feel confident in his ability to defend MMT in a debate or a hostile interview.

    What would you actually have him do? The only thing I can think of is have him propose deepening and extending the FICA tax holiday.

    Lowering income taxes is a non-starter with Democrats, and increasing spending is a non-starter with Republicans (including me, by the way, although I don’t view transfer payments as spending).

    Reply

    WARREN MOSLER Reply:

    he could direct everyone to my book which he says he’s read

    Reply

  16. rvm says:

    New progressive party should be established in US.
    It then will bring to the public debate the really important problems which aren’t discussed at present.

    Warren has already created very good program to be used as an ideological and practical guide for such party.

    Just brainstorming.

    Reply

    WARREN MOSLER Reply:

    standing by to help!

    Reply

    rvm Reply:

    Well we – all the MMT enthusiast – will be standing by to help you!

    Reply

    WARREN MOSLER Reply:

    :)

  17. Dave Begotka says:

    Under the bus…….lol……..reminds me of working for you!!!

    Reply

    WARREN MOSLER Reply:

    sorry!!!
    :(

    Reply

    Dave Begotka Reply:

    When one plays in front of buses one gets you once and a while…..LOL……it was wth funnest bus i ever got run down by….

    Reply

  18. Tim says:

    ‘turning the US into the next Japan, which now includes the drive to become a net exporter’ -Mosler

    How is being a net exporter actually harmful? It appears to be helping China and improving many of it’s citizens incomes and standards of living greatly.

    Thank you in advance for your thoughts,

    Tim

    Reply

    WARREN MOSLER Reply:

    exports are real economic costs, and imports real benefits

    see ‘the 7 deadly innocent frauds of economic policy:

    http://www.moslereconomics.com/?p=8662/

    Reply

    Unforgiven Reply:

    Time for a pink slip:

    http://www.gao.gov/special.pubs/longterm/tourqa.html

    Think we could come up with an $8/hr. job for this guy?

    Reply

    Tom Hickey Reply:

    The part I liked best: “All Tour presentations will be professional, fact-based, and nonpartisan in nature.” Uh-huh?

    danw Reply:

    @ Warren

    I understand your point here. (viz ‘exports are real economic costs, and imports real benefits’) And for the sake of my question, I am going to totally concur. Here is my (not operational, but more normative) concern:

    If a “nation” is a consumer nation, doesn’t that nation risk losing touch with the kinds of local skills that it might need if, for example, a series of black swan types of events hurled the world into a chaotic state? Moreover, doesn’t a consumer nation risk losing touch with those age-old virtues of balance and “right” living?

    I see an America that is a little off-track. Last weekend I watched hundreds of youth soccer players, all walking around with their iPods and other gadgets, barely interacting with one-another. I see masses of people buying slabs of Velveeta cheese at the local jiffy mart. I see an entire generation of Americans sitting in front of the T.V., watching really troubling shows—shows that glorify violence and drug addiction and all manner of unhealthy, sick ways of living.

    I know that I am speaking in normative terms here…but it concerns me that the operational truths to which you speak cannot be healthily handled by a population of increasingly detached and sick individuals.

    Reply

    ESM Reply:

    Dan,

    My take on it is that the knowledge and skills needed to rebuild a defunct domestic industry are easily reacquired by a developed country like the US. Even the execrable and inefficient Soviet Union went from an agrarian society to an industrial powerhouse in the space of a decade by copying proven industrial techniques and factory designs from the rest of the world. Imagine what a free economy responding to market forces could do.

    So, no, I don’t think that having the Chinese make our clothes or the Japanese and Koreans make our cars and TVs puts us in a precarious position.

    The more important question you have raised is whether the population becomes lazy and dysfunctional when it consumes much more than it produces. I think that can definitely happen if the amount of real work being done domestically drops low enough. Not only is unemployment and underemployment corrosive, but even large scale voluntary unemployment can undermine society.

    I think that we are nowhere near this point in the US (trade deficit is only 5% of GDP), but it is a problem in many oil-exporting countries. For example, Saudi Arabian society is pretty dysfunctional, and I think that their vast oil wealth is partly to blame.

    danw Reply:

    @ ESM

    Good point about the USSR.

    I don’t think we can compartmentalize issues of production vs. consumption and issues of societal health. You wrote: “…The more important question you have raised is whether the population becomes lazy and dysfunctional when it consumes much more than it produces…”

    Laziness may not be the right word. Perhaps ‘incapacitated’ is a better term. And…demoralized too. I am projecting things out in somewhat of a REPO MAN (the film) kind of way, I’ll admit. But when a society becomes utterly dependent upon the consumption of goods produced abroad, doesn’t that society become increasingly incapacitated? What happens if such imports are suddenly curtailed, or if prices for imports rise dramatically and within a brief time frame? A society “addicted” to the work and production of others may have a hard time responding to such changes in a flexible, elastic manner.

    WARREN MOSLER Reply:

    lots of problems for sure, but doesn’t seem net imports of maybe 4% of gdp is to blame for all that?

    Greg Reply:

    Dan

    The problem as I see it is that too many are still stuck in the paradigm that producing stuff is the only thing that counts as work. Many service oriented skills within the healthcare and other fields are quite valuable and people will pay for them.

    The trouble with that paradigm is it sees Germany and Japan as models for all countries to mimic. Have all your citizens produce more than they consume and save save save. Of course this ignores the reality that all net producers need net consumers so the fallacy of composition becomes a real limit to the effectiveness of this paradigm.

    As Warren has stated very well, we have all the tools we need to re energize our economy already in our toolkit. We dont need to reinvent anything we just need to reorient our views about money, work and production. We need to think globally but act locally. Cutting our taxes, guaranteeing a job for all who want one and shrinking the influence of our extractive financial sector would be a great start.

    Why would we ever have to worry about Japan being the car producer and China being the ipod producer? As long as we continue to be good customers they need us as much as we need them.

    WARREN MOSLER Reply:

    you mean, ‘…they ‘think’ they need us as much as we need them’…

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