And They're Off! The Democratic Candidates for 2020

[Karl Henning]

Meanwhile Bernie seems to have decided to outflank everyone else on the Palestinian issue
https://www.nationalreview.com/news/bernie-sanders-u-s-should-withhold-military-aid-unless-israel-fundamentally-changes-its-relationship-with-people-of-gaza/

Mind you, reducing aid to Israel is not a new idea, or even one that's confined to the US Left.  What is new is the idea of the US giving money to Gaza directly.  That means, as long as Hamas controls Gaza, giving money to Hamas which Hamas then diverts from humanitarian uses to its campaign of violence against Israel. So Bernie is proposing we actually finance terrorism.

It will be interesting to see if that arises in a debate.

[drogulus]

Meanwhile Bernie seems to have decided to outflank everyone else on the Palestinian issue
https://www.nationalreview.com/news/bernie-sanders-u-s-should-withhold-military-aid-unless-israel-fundamentally-changes-its-relationship-with-people-of-gaza/

Mind you, reducing aid to Israel is not a new idea, or even one that's confined to the US Left.  What is new is the idea of the US giving money to Gaza directly.  That means, as long as Hamas controls Gaza, giving money to Hamas which Hamas then diverts from humanitarian uses to its campaign of violence against Israel. So Bernie is proposing we actually finance terrorism.

     It might be a better option than U.N. aid to the populace for the U.S. to provide direct aid. The problem I see would be Hamas would be smart enough to refuse it. If aid is the tool of imperialist oppression the left thinks it is, let's imperially oppress.

[71 dB]

Beto dropped out! Good riddance! 

[SimonNZ]

Paul Krugman: Did Warren Pass the Medicare Test? I Think So

"Last week I worried that Elizabeth Warren had painted herself into a corner by endorsing the Sanders Medicare-for-all plan. It was becoming obvious that she couldn't stay vague about the details, especially how to pay for it; and some studies, even by center-left think tanks, suggested that any plan along these lines would require large tax hikes on the middle class. So what would she come up with?

Well, the Warren plan is now out. And I'd say that she passed the test. Experts will argue for months whether she's being too optimistic — whether her cost estimates are too low and her revenue estimates too high, whether we can really do this without middle-class tax hikes. You might say that time will tell, but it probably won't: Even if Warren becomes president, and Dems take the Senate too, it's very unlikely that Medicare for all will happen any time soon.

Nonetheless, Warren needed to show that she was working the problem. And she did. She brought in real experts like Donald Berwick, who ran Medicare during the Obama years, and Betsey Stevenson, former chief economist at the Labor Department. And they have produced a serious plan. As I said, experts will argue with the numbers, but this is the real thing — not some left-leaning version of voodoo economics.

How does the Warren plan expand Medicare to cover everyone without raising taxes on the middle class? There are four main components."[...]

[71 dB]

middle-class tax hikes are a great thing when you don't need to pay premiums, co-pays, deductibles etc. private crap and save tons of money in the process. This fearmongering of taxes is so old by now... ...come on!

[Todd]

Read my lips: no new taxes (1988).

If you like the plan you have, you can keep it.  If you like the doctor you have, you can keep your doctor, too. (2009)

We don't need to raise taxes on the middle class by one penny to finance Medicare for All. (2019)

The more things change, and all that. 

Goofy Elizabeth Warren is unfortunately not doing anything to help dispel the idea that girls aren't good at math.

[drogulus]

     Everyone thinks they are expert on how much tax will come back from an expansionary new government program.

     I'm sure Warren has a plan that's no better or worse than the other ones. The howyougonna meme is empty, a conversation stopper.

     We don't know how much tax comes back from a bigger economy. It will be more, that we know. Over the last decade it's been fairly proportional. The economy grew slowly and the tax came back about the same. If Medicare for All is expansionary that raises the tax take the normal way. If we impose a sufficient delay on the imposition of a higher tax rate we might find, to the everlasting sorrow of shrinkonomists, that it's not needed, whatever "needed" is supposed to be.

[Todd]

     Everyone thinks they are expert on how much tax will come back from an expansionary new government program.

     I'm sure Warren has a plan that's no better or worse than the other ones. The howyougonna meme is empty, a conversation stopper.

     We don't know how much tax comes back from a bigger economy. It will be more, that we know. Over the last decade it's been fairly proportional. The economy grew slowly and the tax came back about the same. If Medicare for All is expansionary that raises the tax take the normal way. If we impose a sufficient delay on the imposition of a higher tax rate we might find, to the everlasting sorrow of shrinkonomists, that it's not needed, whatever "needed" is supposed to be.

The funniest thing about this post is that it isn't satire.

[drogulus]

middle-class tax hikes are a great thing when you don't need to pay premiums, co-pays, deductibles etc. private crap and save tons of money in the process. This fearmongering of taxes is so old by now... ...come on!

     The middle class will pay more tax on higher income, just like the economy will. Add more income and you get more tax back unless you deliberately try to prevent the tax return from rising as the economy grows. The real economic question is about inflation. Demand side inflation is hard to get and even harder to sustain. The reason for that is that real limits govern the use of money to deploy resources, and when the limits are approached resources will expand through efficiency gains and substitution. When growth is slow productivity gains are weak, when growth speeds up, gains speed up.

     Do we "need" higher tax rates, or should we hold off and let expansion pay for itself? It would be wise to wait and see if a need of some kind appears.

[Todd]

drogulus posts: argle-bargle or foofaraw?

[drogulus]

     Kelton says that MfA might be demand negative and require a tax cut to maintain growth.

     Medicare-for-all has a modeling problem

Now, Americans don't like taxes, so that's a major political handicap.

But more the point, that assumption that you need to fully "pay for" the program is wrong on the merits.

Here's how it actually works: The federal government controls the supply of U.S. dollars, so it can create as many as it wants. It doesn't need taxes to get the money. What it does have to do is manage the macro-economy, making sure the sum total of its fiscal policy doesn't lead to overheating and inflation. As long as the economy is below capacity, the government can spend without any sort of offset, adding more demand to the economy and creating jobs until it fills that gap. Once that gap is filled, additional spending does need to be offset, lest inflation set in.

This critique is often associated with Modern Monetary Theory, of which Kelton is a major champion. But most of the mainstream economics profession will acknowledge this description is accurate. They just think distinguishing between taxes as "paying for" spending and taxes as offsets for inflation is a matter of "tomatoe" versus "tomato."

    Yeah, what I said. But I think the takeaway from demand positive or negative initial assumptions is that it doesn't matter for whether you do the policy. If the resources are there, there's no need to "run out of dollars" for them.

     So why would Kelton think we'd use tax cuts? Oh, this:

Now, there's no way those Americans who lose their jobs in the private health insurance bureaucracy could keep working in the same sector. Permanently squashing that bureaucracy is part of the point of Medicare-for-all. But the government does need to ensure there are good jobs waiting for those people. That means ensuring the economy has reached full employment and demand is maxed out. That will keep employers desperate for labor, and they'll scramble to snatch those workers up.

[Florestan]

drogulus posts: argle-bargle or foofaraw?

Whichever of these terms means "utterly unintelligible verbiage" gets my vote.

[Todd]

Whichever of these terms means "utterly unintelligible verbiage" gets my vote.

I've occasionally thought about contacting my alma mater to direct the Econ faculty to drogulus' posts on economics as humorous examples of how economically illiterate so many Americans are, including some Big Brains.  The posts could serve as "Don't Let This Happen to You" warnings.  The English department could also use his posts as useful counterexamples of good writing, though I think once they realized he is a native speaker, they might be more concerned for his mental well-being than anything else.

[drogulus]

Whichever of these terms means "utterly unintelligible verbiage" gets my vote.

     If all I did was regurgitate standard issue nonsense of the kind you are used to hearing, I assume you'd find it intelligible. Do you think, for example, that when the government spends more money into the economy, people have less of it, while if the government taxes more money from the people, they have more? Do you find that intelligible?

[drogulus]

I've occasionally thought about contacting my alma mater to direct the Econ faculty to drogulus' posts on economics as humorous examples of how economically illiterate so many Americans are, including some Big Brains. 

     Don't bother with them, they will be the last to know. One funeral at a time they will learn.

     I have a better idea, take it to Wall Street.

     Modern Monetary Theory Finds an Embrace in an Unexpected Place: Wall Street

"I don't look at labels in terms of what's on the left and the right," said Jan Hatzius, the chief economist at Goldman Sachs. "I try to look at what makes me have a better chance of getting the forecast right, and I do find some of the ideas useful."

So does Paul A. McCulley, a former chief economist at the behemoth asset firm Pimco. Ideas like M.M.T. that rub against the grain of conventional economics, he said, have "for all of my career been a very useful framework for analysis."

That framework helped produce billion-dollar gains for the company after the 2008 financial crisis. Dismissing alarms about outsize government debt and white-knuckle interest rates, Pimco instead bet successfully that rates would remain low. When it came to decision-making during this period, Mr. McCulley said, M.M.T. and other unorthodox approaches helped him "get it right."

Richard C. Koo, chief economist at the Nomura Research Institute in Tokyo, said he had been telling his clients for years that "even with huge budget deficits in the U.S., interest rates would actually come down, not go up."

   

[Todd]

MMT is the Scientology of economics. 

[Florestan]

     If all I did was regurgitate standard issue nonsense of the kind you are used to hearing, I assume you'd find it intelligible.

I don't mind heterodox economics. I mind nonsense such as this:

     The middle class will pay more tax on higher income, just like the economy will.

Granted, English is not my mother tongue but what I infer from the above is "the economy will pay more tax on higher income". If you could explain me how "economy" can "pay tax", be it more or less, I'll retract "nonsense". (That is, putting aside the issue of writing "more tax" for what I assume you meant "higher taxes".)

[71 dB]

Now, Americans don't like taxes,...

Yep, but I don't think Americans like premiums, co-pays, etc. either...

[greg]

Yep, but I don't think Americans like premiums, co-pays, etc. either...

Well, then it just seems to be a matter of which poison tastes worse to Americans, which can be decided by voting...

[Todd]

Well, then it just seems to be a matter of which poison tastes worse to Americans, which can be decided by voting...

To a limited extent.  Unless there is a 1932 style victory for one party or the other, the best any incoming Administration can hope for is a watered-down version of its agenda to pass.  I do hope Dems and ignorant non-American fellow travelers get very excited about Medicare for All.