Tag Archives: Paul Ryan

Paul Davidson on Paul Ryan’s economic knowledge in NY Times in 2009

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>   
>   (email exchange)
>   
>   On Sat, Aug 11, 2012 at 1:32 PM, Paul wrote:
>   
>   In an op-ed ”Thirty Years Later, a Return to Stagflation” (Op-Ed, Feb. 14), Representative
>   Paul D. Ryan, Republican of Wisconsin, argued that the stimulus plan will bring the
>   combination of high inflation and high unemployment known as stagflation.
>   
>   Here is a copy of my February 22, 2009 published letter to the Editor of the New York
>   Times evaluating Paul Ryan’s economics.
>   

LETTERS; Can We Spend Our Way to Recovery?

February 22, 2009 (NYT)

To the Editor:

Paul D. Ryan repeats the tired idea that when the Federal Reserve prints money for the government to spend on economic recovery, the result will be inflation because ”it is a situation in which too few goods are being chased by too much money.” This is based on a false assumption that the output of the country will not increase when government lets contracts to businesses to produce more goods and services that will improve the productivity and health of our country.

If there is significant unemployment and idle capacity in the private sector (and who can deny that there is?), then this deficit spending will not cause inflation. Rather, the ”printed” money spent on a recovery plan creates profit opportunities that induce private enterprise to hire and produce more goods. Then there will be many more goods available for this money to chase and no inflation need occur.

Paul Davidson
Boynton Beach, Fla., Feb. 14, 2009

The writer is editor of The Journal of Post Keynesian Economics.

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MMT to Ryan- Apologize NOW about the US being the next Greece

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Congressman Ryan’s response to the President Obama’s State of the Union address included
something we’ve all hear a lot of ever since.

He warned along the lines that that the US could become the next Greece,
and be faced with some kind of a sudden financial crisis,
where the world would no longer lend to us,
interest rates would skyrocket,
and the US,
unable to spend,
would be down on it’s knees before the IMF begging for the needed funding.

And no one with any kind of national public forum took issue with him.
Including the President and the Democrats in Congress,
who for all appearances quietly agreed and acted accordingly.

Well, today, based on the near universal response to the S&P downgrade,
everyone now knows, or should know,
there is no such thing as the US becoming the next Greece.

The overwhelming response to the S&P downgrade by everyone from Buffet to Greenspan, and
most every financial and academic economist in the world was along the lines of:

The US is the issuer of the dollar.
It can print dollars.
So it can always make timely payments without limit.

THERE IS NO SOLVENCY ISSUE FOR THE US.
There is no such thing as the US running out of dollars to spend.
There is no such thing as the US being dependent on taxing or borrowing to get dollars to spend.

Greece is very different.
Greece, Ireland, Italy, and all the euro member nations, corporations, and households can’t print euro,
any more than the US states, corporations, and households can print dollars.
And so they are all indeed dependent on revenues from somewhere to be able to spend.

So, Congressman Ryan, please apologize NOW for being so wrong and so misleading.

There is no solvency risk for the US.
The Fed is price setter for the interest rates for the US government and the banking system, not the market,
just like the European Central Bank sets the interest rates for its banking system and its own debt.

Congressman Ryan,
your reasons for deficit reduction have vaporized.

You see,
the risk of overspending is inflation,
not solvency.

So if you want to argue for deficit reduction,
apologize NOW,
regroup,
and come back with your next round of fear mongering
about how the deficit can be inflationary,
or something like that,
and see how that flies.

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