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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.

Archive for January 14th, 2013

More Americans 75 and Older Keep Working

Posted by WARREN MOSLER on 14th January 2013

As previously discussed, the real answer to the ‘dependency ratio’ is in fact happening?

The trick is to let seniors collect full social security and their paychecks:

More Americans 75 and Older Keep Working

By Christine Dugas

January 1 (USA Today) — Sixty-five is the normal retirement age, but many Americans are working much later in life, and it’s not just because they need the money.

The number of workers who are 75 and older has skyrocketed by 76.7 percent in the past two decades, according to research by the AARP Public Policy Institute. “We are living longer, healthier lives,” says Kerry Hannon, author of Great Jobs for Everyone 50+. “And the types of work that people do is not as labor intensive as it was in our parents’ generation.”

Posted in Uncategorized | 22 Comments »

Platinum Coin Idea Is Rejected by White House

Posted by WARREN MOSLER on 14th January 2013

This is far more problematic than markets realize.

The President had a choice. The debt ceiling thing expresses ‘the will of Congress’ where Congress makes laws for the executive branch to execute. The President has also sworn to uphold the Constitution which says the President has to pay the nation’s bills. The President has so far decided to abide by the will of Congress.

And, in any case, the Republican leadership says the fight is going to be about modifying the already in place sequestrations.

So seems it’s now ‘advantage Republicans’ on the spending cuts issue.

The economy hitting the debt ceiling and going cold turkey to a balanced budget is a far more catastrophic event than even going over the full cliff would have been, as it disables the ‘automatic fiscal stabilizers’ and instead triggers a pro cyclical downward spiral in output and employment. That is, when the $25 billion/week spending cuts kick in and the economy slows, the falling tax revenues mean spending has to be cut more, nor can total spending on unemployment ‘automatically’ go up, etc.

And don’t forget about the Jan 1 FICA hike now beginning to kick in which also seems markets are not discounting.

Platinum Coin Idea Is Rejected by White House

January 12 (Reuters) — The White House on Wednesday sees little profit in the notion of minting $1 trillion platinum coin as an escape hatch to avoid a debt default if Congress balks at raising the U.S. debt limit.

Posted in Government Spending, Political | 28 Comments »