Say, Looks Like That Supply-Side Stuff Works After All

[Toddsterpatriot]

Stupid teabaggers love it.
Multi-billion $$$ pay $0 and working people pay $1,000's.
Then teabaggers whine about the debt, (That's only when a democrat is president)

Yes, companies that reinvest in new equipment pay nothing.
Idiot leftists, I repeat myself, whine.

 

[Nuthin' Fancy]

Yes, companies that reinvest in new equipment pay nothing.
Idiot leftists, I repeat myself, whine.

You're FOS, as usual.
Not even close to the companies that bought their own stock back.

 

[Red Front]

Stupid teabaggers love it.
Multi-billion $$$ pay $0 and working people pay $1,000's.
Then teabaggers whine about the debt, (That's only when a democrat is president)

The imaginary "debt" that is actually a surplus:

​

The financial liabilities of the US federal government, denominated in USD, aren't really a "debt", in the same way as you or I have a debt. Personal and household debts are completely different from the so-called "national debt"(the self-imposed financial liabilities of the US federal government, denominated in its own currency).

 

[Toddsterpatriot]

You're FOS, as usual.
Not even close to the companies that bought their own stock back.

They don't get a tax break for buying their own stock, idiot

 

[Toddsterpatriot]

The financial liabilities of the US federal government, denominated in USD, aren't really a "debt", in the same way as you or I have a debt. Personal and household debts are completely different from the so-called "national debt"

So what?

 

[Red Front]

So what?

Time and time again, right-wing apologists, compare our so-called "national debt", with personal debt, in order to scare people into thinking our federal government is going to go insolvent or raise taxes. The US government is supposedly "going broke", according to these right-wing ideologues. No, we're not. Our government can afford infrastructural development projects, Social Security, Medicare, and Medicaid. etc.

 

[The5thHorseman]

Say, Looks Like That Supply-Side Stuff Works After All​

Say, Looks Like That Supply-Side Stuff Works After All

Every lawmaker who supports Bidenomics should be fired, with prejudice, the next time their seat comes up for election.

issuesinsights.com

6 Jul 2023

Bidenomonics has been, and will continue to be, a disaster. This is what happens when lawmakers manipulate economies. No one should ever expect a different outcome when politicians enact ideas that they believe are so brilliant that they will overcome the laws of economics. The way out of this mess is to make a policy U-turn to both unleash the economy and expand precious liberty.
President Joe Biden last week bragged that his economic policies — straight from the Democrats blueprint that says “borrow, tax, spend, regulate, then do it all again” — are working. But as we’ve noted, Bidenomics has been a wreck, a flop that is taking us into a recession.
Not only did Biden openly boast as our sclerosis grows worse, he also, as Democrats always do, took a jab at “trickle-down economics,” claiming it has “failed the middle class … failed America … blew up the deficit” and “increased inequity.”
He probably would have blamed the Canadian wildfires on “trickle-down economics” had he thought about it. But there’s not much thinking going on in his head — and in fact there never has been, with his ungovernable mouth leading the way throughout his career as an elected grifter.
~Snip~
We don’t see Biden or any other Democrat ever coming around to supply-side economic policies, the correct terminology for what they sneeringly call “trickle-down economics,” which asserts that lower taxes and less regulatory meddling fuel economic growth. Yet they are exactly what our economy — any economy – needs, now and forever.
In our post-lockdown world, the states that have the strongest economic recoveries are the red ones on the map. And what do they have in common? Low taxes and light regulation.
We can see this vividly in the rankings of states that have had the greatest increases in hiring over the last year. Of the top 10, only two are blue, or Democratic, states.
~Snip~
Democrats are stubborn animals who will continue to take two-by-fours upside their heads and swear that the blows don’t hurt and there’s no damage done. So we can’t under any circumstances foresee them ever abandoning their policy preferences, from busted Obamanomics to neo-Marxist Sandynomics to baffled-by-his-own-BS Bidenomics, that cause so much harm. Which is why we need a real red wave in 2024 rather than another ebbing tide like the one we had last year.


Commentary:
Before one declares that Bidenomics is ``Not Working``, one needs to discern the goals of Bidenomics. One might find that Bidenomics is, indeed, Working as designed to destroy te economy and America.
The big takeaway from this article is that lower taxes and light regulation actually increases tax revenues. This is because:

1) productive economic effort is rewarded, and​

2) there is less incentive to avoid taxes (e.g., people fleeing CA, NY, and IL).​

At the Federal level, look what the Reagan Tax Cuts did for the disastrous Carter and Obama economy; one of the longest sustained growth periods of US economic growth ever.
Did the Democrats learn the lesson? No! because to them higher taxes is the means to attaining more power.
While it is a current trend to use the term ‘Bidenomics’ when referring to the abject failure of so many infrastructure sub-systems and supply chain shortages including baby formula, we should probably be calling it ‘Obamanomics’.
Remember “We are going to change your world as you know it.” No one thought to ask what his objective actually was..

This is such garbage that google doesn't want me to read it.

 

[Toddsterpatriot]

Time and time again, right-wing apologists, compare our so-called "national debt", with personal debt, in order to scare people into thinking our federal government is going to go insolvent or raise taxes. The US government is supposedly "going broke", according to these right-wing ideologues. No, we're not. Our government can afford infrastructural development projects, Social Security, Medicare, and Medicaid. etc.

So, we should print money to cover this debt?
Raise taxes? Cut spending? Do nothing?

Let's hear your bright ideas.

 

[Red Front]

So, we should print money to cover this debt?
Raise taxes? Cut spending? Do nothing?

Let's hear your bright ideas.

Is that the type of "debt" the US federal government has? Who do they "owe" and why?

 

[Toddsterpatriot]

Is that the type of "debt" the US federal government has? Who do they "owe" and why?

They owe their bond holders. Because they borrowed money by selling bonds.

 

[Red Front]

They owe their bond holders. Because they borrowed money by selling bonds.

They "borrowed" something they don't have? Our federal government "needs" to "borrow" USD?

 

[Toddsterpatriot]

They "borrowed" something they don't have? Our federal government "needs" to "borrow" USD?

Yes, the government borrowed money.

Our federal government "needs" to "borrow" USD?

What should they have done instead of "borrowing" USD?

 

[Red Front]

Yes, the government borrowed money.

Our federal government "needs" to "borrow" USD?

What should they have done instead of "borrowing" USD?

The funds to buy Treasury securities comes from government spending itself and does not constitute borrowing. The sale of securities is simply an exchange of bank reserves for an interest-bearing account of the U.S. government and functions to maintain a desired interest rate. If the government stopped selling securities altogether it would have no impact on its ability to spend as long as that spending was done in its own currency.

 

[Toddsterpatriot]

The funds to buy Treasury securities comes from government spending itself and does not constitute borrowing. The sale of securities is simply an exchange of bank reserves for an interest-bearing account of the U.S. government and functions to maintain a desired interest rate. If the government stopped selling securities altogether it would have no impact on its ability to spend as long as that spending was done in its own currency.

The funds to buy Treasury securities comes from government spending itself and does not constitute borrowing.

Wrong. I bought a US Treasury and the money I used did not come from government spending.
It sure as hell constituted borrowing.

What should they have done instead of "borrowing" USD?

If the government stopped selling securities altogether it would have no impact on its ability to spend as long as that spending was done in its own currency.

They should print currency to finance their spending?

 

[Red Front]

The funds to buy Treasury securities comes from government spending itself and does not constitute borrowing.

Wrong. I bought a US Treasury and the money I used did not come from government spending.
It sure as hell constituted borrowing.

What should they have done instead of "borrowing" USD?

If the government stopped selling securities altogether it would have no impact on its ability to spend as long as that spending was done in its own currency.

They should print currency to finance their spending?

• You wrote says, "Wrong. I bought a US Treasury and the money I used did not come from government spending."
  While it may seem that your individual purchase of a Treasury security was made with money you earned independently of government spending, the macroeconomic reality is different. The dollars in the economy, that you used to purchase the Treasury security, are a result of cumulative government spending. In other words, government spending injects dollars into the economy, which becomes part of the pool of funds that individuals and institutions can use to purchase Treasury securities and also pay you for your labor or for what you're selling.
• You wrote, "It sure as hell constituted borrowing."
  The sale of Treasury securities is not borrowing in the traditional sense. It's rather an asset swap. The government, as the issuer of the currency, doesn't need to borrow its own money. Instead, it issues securities to drain excess reserves from the banking system, helping to hit its target interest rate. The "borrowing" terminology comes from gold-standard thinking where governments had to borrow gold or foreign currency, which they did not have the ability to create. We're not in that situation anymore, due to the fact we have a sovereign fiat currency, issued exclusively by our federal government.
• You wrote: "What should they have done instead of "borrowing" USD?"
  The question misunderstands the role of Treasury securities in a fiat currency system. Rather than a borrowing operation, the sale of Treasury securities is a monetary policy operation that helps manage the quantity of reserves in the banking system and stabilize interest rates. It's not a matter of what the government should do instead of "borrowing" USD; it's about understanding that the issuance of Treasury securities is part of a complex system of money and banking operations.
• You wrote: "They should print currency to finance their spending" In a sense, the government already "prints" (or creates) currency to finance its spending. Every time the government spends, it increases the amount of reserves in the banking system. The issuance of Treasury securities is a subsequent operation that swaps those reserves for interest-bearing securities. The operation isn't about financing government spending; it's about managing reserves and interest rates in the banking system.

 

[Toddsterpatriot]

• You wrote says, "Wrong. I bought a US Treasury and the money I used did not come from government spending."
  While it may seem that your individual purchase of a Treasury security was made with money you earned independently of government spending, the macroeconomic reality is different. The dollars in the economy, that you used to purchase the Treasury security, are a result of cumulative government spending. In other words, government spending injects dollars into the economy, which becomes part of the pool of funds that individuals and institutions can use to purchase Treasury securities and also pay you for your labor or for what you're selling.
• You wrote, "It sure as hell constituted borrowing."
  The sale of Treasury securities is not borrowing in the traditional sense. It's rather an asset swap. The government, as the issuer of the currency, doesn't need to borrow its own money. Instead, it issues securities to drain excess reserves from the banking system, helping to hit its target interest rate. The "borrowing" terminology comes from gold-standard thinking where governments had to borrow gold or foreign currency, which they did not have the ability to create. We're not in that situation anymore, due to the fact we have a sovereign fiat currency, issued exclusively by our federal government.
• You wrote: "What should they have done instead of "borrowing" USD?"
  The question misunderstands the role of Treasury securities in a fiat currency system. Rather than a borrowing operation, the sale of Treasury securities is a monetary policy operation that helps manage the quantity of reserves in the banking system and stabilize interest rates. It's not a matter of what the government should do instead of "borrowing" USD; it's about understanding that the issuance of Treasury securities is part of a complex system of money and banking operations.
• You wrote: "They should print currency to finance their spending" In a sense, the government already "prints" (or creates) currency to finance its spending. Every time the government spends, it increases the amount of reserves in the banking system. The issuance of Treasury securities is a subsequent operation that swaps those reserves for interest-bearing securities. The operation isn't about financing government spending; it's about managing reserves and interest rates in the banking system.

While it may seem that your individual purchase of a Treasury security was made with money you earned independently of government spending, the macroeconomic reality is different.

Not really.

The sale of Treasury securities is not borrowing in the traditional sense. It's rather an asset swap.

When I swap cash for a bank CD, it is also an "asset swap".
So what? It's still the bank borrowing from me. Me lending to the bank.

The government, as the issuer of the currency, doesn't need to borrow its own money.

What should they do, instead?

Instead, it issues securities to drain excess reserves from the banking system, helping to hit its target interest rate.

You think the Treasury selling a T-Bill drains reserves from the banking system?
Who told you that?

The question misunderstands the role of Treasury securities in a fiat currency system.

LOL! You're funny.

the sale of Treasury securities is a monetary policy operation that helps manage the quantity of reserves in the banking system and stabilize interest rates

You're confusing fiscal policy with monetary policy. I'm not surprised.

In a sense, the government already "prints" (or creates) currency to finance its spending.

Do you feel the government should do this without also selling Treasuries?

 

[Red Front]

While it may seem that your individual purchase of a Treasury security was made with money you earned independently of government spending, the macroeconomic reality is different.

Not really.

The sale of Treasury securities is not borrowing in the traditional sense. It's rather an asset swap.

When I swap cash for a bank CD, it is also an "asset swap".
So what? It's still the bank borrowing from me. Me lending to the bank.

The government, as the issuer of the currency, doesn't need to borrow its own money.

What should they do, instead?

Instead, it issues securities to drain excess reserves from the banking system, helping to hit its target interest rate.

You think the Treasury selling a T-Bill drains reserves from the banking system?
Who told you that?

The question misunderstands the role of Treasury securities in a fiat currency system.

LOL! You're funny.

the sale of Treasury securities is a monetary policy operation that helps manage the quantity of reserves in the banking system and stabilize interest rates

You're confusing fiscal policy with monetary policy. I'm not surprised.

In a sense, the government already "prints" (or creates) currency to finance its spending.

Do you feel the government should do this without also selling Treasuries?

1. "Not really."
   The larger point here is that the total amount of dollars in the economy at any given time is a function of cumulative government spending over time. When the government spends, it essentially creates dollars and injects them into the economy.
2. "When I swap cash for a bank CD, it is also an 'asset swap'. So what? It's still the bank borrowing from me. Me lending to the bank."
   Indeed, a bank CD is a type of loan to a bank. However, there's a crucial difference between the position of a bank and that of a government that issues its own currency. A bank does not issue the currency and hence needs to attract deposits (loans from customers) to lend. A government that issues its own currency doesn't have this constraint - it doesn't need to attract dollars before it can spend them.
3. "You think the Treasury selling a T-Bill drains reserves from the banking system? Who told you that?"
   Yes, the sale of Treasury securities does drain reserves from the banking system. This is well-documented in the literature on central banking and can be confirmed by consulting any comprehensive textbook on money and banking.
4. "You're confusing fiscal policy with monetary policy. I'm not surprised."
   The sale of Treasury securities blurs the line between fiscal and monetary policy because it involves both fiscal agents (the Treasury) and monetary agents (the central bank). In any case, the key point is that the sale of Treasury securities affects the level of reserves in the banking system and the interest rate, both of which are typically matters of concern for monetary policy.
5. "Do you feel the government should do this without also selling Treasuries?"
   This question reflects a misunderstanding of why governments that issue their own currency sell Treasury securities. The sale of Treasury securities is not a necessary precondition for government spending. Instead, the securities are sold as part of a strategy for managing the level of reserves in the banking system and stabilizing the interest rate.

 

[Toddsterpatriot]

1. "Not really."
   The larger point here is that the total amount of dollars in the economy at any given time is a function of cumulative government spending over time. When the government spends, it essentially creates dollars and injects them into the economy.
2. "When I swap cash for a bank CD, it is also an 'asset swap'. So what? It's still the bank borrowing from me. Me lending to the bank."
   Indeed, a bank CD is a type of loan to a bank. However, there's a crucial difference between the position of a bank and that of a government that issues its own currency. A bank does not issue the currency and hence needs to attract deposits (loans from customers) to lend. A government that issues its own currency doesn't have this constraint - it doesn't need to attract dollars before it can spend them.
3. "You think the Treasury selling a T-Bill drains reserves from the banking system? Who told you that?"
   Yes, the sale of Treasury securities does drain reserves from the banking system. This is well-documented in the literature on central banking and can be confirmed by consulting any comprehensive textbook on money and banking.
4. "You're confusing fiscal policy with monetary policy. I'm not surprised."
   The sale of Treasury securities blurs the line between fiscal and monetary policy because it involves both fiscal agents (the Treasury) and monetary agents (the central bank). In any case, the key point is that the sale of Treasury securities affects the level of reserves in the banking system and the interest rate, both of which are typically matters of concern for monetary policy.
5. "Do you feel the government should do this without also selling Treasuries?"
   This question reflects a misunderstanding of why governments that issue their own currency sell Treasury securities. The sale of Treasury securities is not a necessary precondition for government spending. Instead, the securities are sold as part of a strategy for managing the level of reserves in the banking system and stabilizing the interest rate.

The larger point here is that the total amount of dollars in the economy at any given time is a function of cumulative government spending over time.

Not really.

However, there's a crucial difference between the position of a bank and that of a government that issues its own currency.
If you're talking about a "swap of assets", they're exactly the same and just as irrelevant.

Yes, the sale of Treasury securities does drain reserves from the banking system

You're hopelessly confused. We're discussing a sale of Treasuries by the Treasury in order to borrow money. In this light, the central bank isn't involved.

The sale of Treasury securities blurs the line between fiscal and monetary policy because it involves both fiscal agents (the Treasury) and monetary agents (the central bank).

The Fed isn't involved in the fiscal issue.

In any case, the key point is that the sale of Treasury securities affects the level of reserves in the banking system

If I buy a Treasury security from the US Treasury, reserves in the banking system are unchanged.

This question reflects a misunderstanding of why governments that issue their own currency sell Treasury securities.

Your failure to answer makes me laugh.

The sale of Treasury securities is not a necessary precondition for government spending.

Unless you have a different suggestion to fund government spending......I don't care.

Instead, the securities are sold as part of a strategy for managing the level of reserves in the banking system and stabilizing the interest rate.

You're confused!

 

[Red Front]

The larger point here is that the total amount of dollars in the economy at any given time is a function of cumulative government spending over time.

Not really.

However, there's a crucial difference between the position of a bank and that of a government that issues its own currency.
If you're talking about a "swap of assets", they're exactly the same and just as irrelevant.

Yes, the sale of Treasury securities does drain reserves from the banking system

You're hopelessly confused. We're discussing a sale of Treasuries by the Treasury in order to borrow money. In this light, the central bank isn't involved.

The sale of Treasury securities blurs the line between fiscal and monetary policy because it involves both fiscal agents (the Treasury) and monetary agents (the central bank).

The Fed isn't involved in the fiscal issue.

In any case, the key point is that the sale of Treasury securities affects the level of reserves in the banking system

If I buy a Treasury security from the US Treasury, reserves in the banking system are unchanged.

This question reflects a misunderstanding of why governments that issue their own currency sell Treasury securities.

Your failure to answer makes me laugh.

The sale of Treasury securities is not a necessary precondition for government spending.

Unless you have a different suggestion to fund government spending......I don't care.

Instead, the securities are sold as part of a strategy for managing the level of reserves in the banking system and stabilizing the interest rate.

You're confused!

1. 
   "Not really." The assertion that the total number of dollars in an economy is a result of cumulative government spending over time is based on the understanding that the government is the sole issuer of its currency. This is an intrinsic characteristic of fiat monetary systems like the one the U.S. operates under.
2. "If you're talking about a "swap of assets", they're exactly the same and just as irrelevant." Banks and the government play fundamentally different roles in a fiat economy. Banks are users of the currency, while the government is the issuer. As such, a bank's capacity to lend is constrained by its reserves and capital requirements, while a sovereign government's spending capacity is technically unlimited, constrained only by inflation and real resource availability.
3. "You're hopelessly confused. We're discussing a sale of Treasuries by the Treasury in order to borrow money. In this light, the central bank isn't involved." Treasury securities sales serve dual purposes. One, they provide a risk-free asset that the private sector desires, and two, they drain excess reserves from the banking system, assisting in the maintenance of a targeted interest rate. It's not about "borrowing" money, but about managing the amount of reserves in the banking system.
4. "The Fed isn't involved in the fiscal issue." While fiscal and monetary policies are managed by different entities (the Treasury and the Federal Reserve, respectively), the two are intertwined. The sale of Treasury securities does involve the central bank, as it affects the amount of reserves in the banking system.
5. "If I buy a Treasury security from the US Treasury, reserves in the banking system are unchanged." Buying a Treasury security changes the composition of reserves in the banking system. Your payment for the security shifts your bank reserves to the Treasury's account at the Fed, thus changing the form of those reserves from 'bank reserves' to 'government securities'.
6. "Your failure to answer makes me laugh." The role of Treasury securities in a fiat currency system is often misunderstood, hence your confusion and laughter. They are not a prerequisite for government spending but are rather a tool for managing bank reserves and stabilizing interest rates. You can deny it, but you can also believe the moon is made of Swiss cheese.
7. "Unless you have a different suggestion to fund government spending......I don't care." The fact is, whether you're willing and able to accept it or not, Government spending is not funded by the sale of Treasury securities. Rather, our federal government has the power to create currency to fund its operations. The sale of securities is a tool for managing liquidity in the banking system.
8. "You're confused!" It's understandable that these concepts might be challenging for you, especially when viewed through your right-wing, neo-liberal economic lens.

In conclusion, it's crucial to understand the fact that a sovereign currency-issuing government does not rely on tax revenues or borrowing to finance its operations. Instead, it creates money by spending and taxes and the sale of Treasury securities are ways to control inflation and manage the amount of money in the economy. The sale of Treasury securities, therefore, is not borrowing in the conventional sense but a monetary operation that helps maintain stability in the financial system. Denying this Todd, is like refusing to recognize that the state of NY is in the United States or that the US Congress is in Washington DC. You're denying the facts.

 

[Toddsterpatriot]

The assertion that the total number of dollars in an economy is a result of cumulative government spending over time is based on the understanding that the government is the sole issuer of its currency. This is an intrinsic characteristic of fiat monetary systems like the one the U.S. operates under.

How many dollars are "in our economy"?