I understand your position that higher interest rates add NFA to the private sector, as the government is a net borrower.

However, it seems to me there are other effects that overwhelm that one.

For one, who are the net recipients of interest payments, and what is their marginal propensity to spend from that extra income? I think it is mostly “the 1%” as they are called now, and they will likely hoard it, mostly.

For another, what changes occur among potential borrowers, most especially businesses considering expansion? The higher interest rate compares less favorably with their anticipated return, and they will undertake fewer projects, resulting in less spending, lower GDP, and less demand-push inflationary pressure.

On balance, I think raising interest rates is anti-inflationary, if only because it reduces aggregate demand, despite the addition to private sector NFA.

But I don’t think it is the best way to reduce inflation.

“requires appropriate deficits at all times”

This seems more absolute than you might mean to say. You are talking only about government deficits, right, not private sector or current accounts?

In a country with a current account surplus, and the private sector leveraging up (in deficit – see 1998 US for instance), my understanding is that you (MMT) would say that is an appropriate time for a government fiscal surplus, not a deficit. In fact, according to the sectoral balance equation, anything else would be impossible, no?

I had to let you know about this blog post from Jared Bernstein, as it shows what we’re up against from the doves/hawks on the left: http://jaredbernsteinblog.com/boy-are-americans-not-overtaxed-new-cbo-data/

Ironically I’d made a similar suggestion on another blog recently. It seems to me Randy Wray could use the release of his new book to do the rounds on TV. He would have to stay on message though, consistent with your step four. He needs to stay off of topics like the job guarantee and focus first on the fundamentals, the real crux issues in this current political climate. This isn’t to say the JG isn’t important or useful, only it isn’t the priority at this particular junction in time. We need the basics established first, the JG can come later. Time on TV is very limited, so prioritizing the message consistent again with your step 4 would be perfect.

Of course someone else might be able to do this too, but people like Randy, Warren, Stephanie, Scott, etc. have put a lot of work into this theory, and so it seems best for them to be out touting it, or at least they agree on someone to be doing such–with their blessing if you will.

Bill Black has pretty darn good communication skills, he might be a good candidate. Randy has the new release though, so in terms of timing, he might be the best choice. I suppose another might write a book between now and the election, but that’s a lot to accomplish–writing, editing, publishing, printing–between now and the election.

In terms of timing, I don’t see how it gets much better.

My feeling is that politicians only spout what they think people want to hear so you need to change what people want to hear. Right now the common belief is that we have a budget crises so all the politicians and talking heads talk about is cutting spending or raising taxes depending on their camp. Turn that common belief on its head and then you have a chance.

My two cents.