Larry Summers says deficit reduction would be ‘catastrophic,’ argues for new government debt yardsti
- Thread starter Banjo
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I agree with him/that rap album is an embarrasment to the university[see wikipedi]
But he's wrong on dumping toxic junk in Africa +wrong on keep on borrowing too much /just because might get by with it\low rates.
He is right on tax cuts;
tough call on him being against Citi exec getting pay capped for gov bailout.............................................................
The idiot is totally fine destroying whatever value is left in the USD.
Can't actually find a diagram labeled "USD Relative Purchasing Power" at FRED. Either way, I am not sure what it measures.
If it's proportional to the purchasing power of other countries in the world then the fact is a large number of other countries have developed since 1913, and in fact the produce of these countries through international trade let the US consume far more in absolute terms than would be the case if a large proportion of the world's economic production was US only.
Less likely: If it's proportional to the inverse of inflation then it's nonsense since more USD exist in the system nowadays. But FRED wouldn't add nonsense, so...
%%The idiot is totally fine destroying whatever value is left in the USD.
Good thing for us/USA;
our money is still a haven + desirable. I traded some silver for federal reserve notes this year.....................................................................................................That chart makes exports better also.
Jim Rogers said its a flawed currency , but still likes US dollars
It's there:-
https://fred.stlouisfed.org/series/CUUR0000SA0R
but it is labeled Consumer Price Index for All Urban Consumers: Purchasing Power of the Consumer Dollar in U.S. City Average
Summers is exactly right, as is Bernanke. We must not NOT attempt a significant paydown of the National Debt. It makes absolutely no sense to try and do this. It would lead to economic disaster because it would require that we, on balance, over time run government surpluses that would remove more money from the private sector economy than the government spends into it; thus slowly strangling the economy, forcing up real interest on debt, and causing destructive deflation.
You are an indefatigable proponent of MMT. In your opinion can an MMT regime provide resolution to the posed debt problem?
There isn't debt problem yet. The trick is to prevent one in the future. Small regular deficits are essential so long as productivity and population keep growing. Otherwise the economy will be starved for money. The important question is how much deficit is the correct amount. And what happens eventually if deficits are regularly too large. I have been studying this issue. Looks like the answer has a lot to do with bond servicing because this, like entitlements is non-discretionary. But unlike entitlements, none of mandatory debt servicing is prepaid. Summer's thinking is, in my opinion, very much on track.
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