→ This is a very good illustration of your point of view. You basically think, “yes my ideological team got it wrong and catastrophically so, but I can just going to assert that we were sensible and rational as we made errors we will not recognize as errors.”
This is the same reasoning that Senator Imhofe uses in climate debates. :-)
Your entire premise is that Wall Street guys are the ‘smartest guys in the room’ and thus deserve some sort of elevated place in the policy dialogue.
Overstatement. Point here is that it’s generally best to have the best economists working on macroeconomic modeling. Some of the “best” are in corporate America (often at the oil companies), some are in Universities, a lot of them are working on Wall Street. It is an unfortunate fact that few of them work for government because of low pay levels. Do you want your models developed by the best folks possible, or do you want them developed by folks who got B’s at state schools, because you have an irrational bias against corporate america and Wall Street?
Don’t bother to answer. We already know where you’re coming from.
They are very smart, but they are also in thrall to very stupid ideas that leads to catastrophic errors like the one you dismiss above.
So, you think that reversion to mean is a “stupid idea”? :-)
→ I’m very aware of these fights.
Well, then retract your comment about deficits only being of concern since the 70’s, and let’s move on.
→ We can print as much as we want, but we can’t do so without consequences.
Your original tome completely ignored any cognizance of consequences. Thank you for the acknowledgement.
The point is we can’t ‘go bankrupt,
That’s true, but not relevant. At some point, as we print like crazy, we look like Venezuela. We’re not bankrupt, but as far as the impact on our society, it’s a distinction without a difference.
You are explicitly conflating the two bottleneck constraints for ideological reasons.
It is not an ideological point. It’s a simple exaggeration to MAKE the point. If there’s a limit to what we can print, then there is also a limit to what we can borrow, because those we borrow from want to be paid in dollars that are worth something. If they think the dollars they’ll get paid in will be worth less, they’ll demand higher interest rates. And so the death spiral begins.
So, let’s leave “ideology” out of it and just stipulate that there are limits to what we can print. We don’t know what those limits are, and to be sure many of us on the Keynes/Hayek/Friedman side of the argument are very surprised that we haven’t been inflationary at these debt levels. It surprises us that the world keeps wanting to buy our debt. :-)
BUT, THAT SAID, we’ve apparently agreed that the rubber band can only be stretched so far. The question on the table then changes to “how far do you want to stretch it” in pursuit of tax cuts (GOP) or social spending (Dems)”
Both parties want to test those limits, it seems.
It would be honest if you said there are no monetary constraints on our choices, but there are constraints of real productive resources. But that would be honest and people like you lie for ideological reasons.
Hmmmmm. “Constraints of real productive resources”.
I disagree. There are constraints on NATURAL resources, to be sure, but a significant portion of GDP comes from, has for some time, from industries that require relatively little in terms of natural resources to produce.
Who uses more natural resources per dollar contributed to GDP? Boise Cascade, or Amazon?
So, let’s put two things to rest here. ONE is that there are real constraints on the productive capacity of the US. TWO is that I lied. I am not just truthful, but correct.
I didn’t say that we can print as much as we like without consequences, but I know you like to misrepresent people who believe in democracy.
Oh, sweet Jesus. I’m blinded by the virtue signalling. :-)
Notice how your argument has morphed into ‘don’t trust elected officials’, trust the “smartest guys in the room” from Wall Street. Funny that.
Except that nothing’s morphed. It’s not the economists that put policy into place, after all.
This was in what Ben Bernanke and all those fancy economists called ‘the Great Moderation’ when they had figured out how to conquer the business cycle. Your “smartest guys in the room” are, as it turns out, idiots.
Hmmm. Nobody set out to “conquer the business cycle.” What Bernanke did was use the lessons of the past (when the Fed morphed a sharp market downturn into a full scale Depression by tightening credit) to advise his actions in the future (doing just the opposite).
Not sure what you consider “idiot” about that behavior. Should he have tightened into weakness, like 1929?
What eventually crushed inflation in the early 1980s was a vicious recession, the evisceration of wage gains, and offshoring of production.
So, Volker could have been on vacation?
There’s a pattern starting to form here. In each instance, the generally accepted “right thing to do”, OR what is generally accepted as “what worked” is, by you, classified as (a) ideological, and (b) stupid. And you do so without spending any time explaining WHY you believe the consensus is wrong, and why your alternative, minority explanation is correct.
Have you really thought these things through, or are you letting the cart pull the horse? Because it doesn’t sound like you’ve given these matters much thought at all.
I think the whole Green New Deal frame is vague and a misunderstanding of what the New Deal was, but let’s play your stupid game. The Federal Reserve can simply peg interest rates at whatever amount we choose. That’s how FDR financed WWII. Paying interest on debt is a political choice.
Dude. :-). WW2 was financed by income taxes and war bonds sold into a post-Depression economy. Sure, the US could charge whatever it liked, because (a) it was considered patriotic to buy the war bonds, and (b) after the events of 1929, people were keeping their money in mattresses. All the government had to to was match savings interest rates, and the bonds flew out the door.
Fast forward to today. The Fed can still peg interest rates wherever it wants, but we sell our debt at auction. Treasury can try and sell 10 year notes at 1% if it wants, but there won’t be any takers. That rate has to jack up until the bonds get sold. So, it’s NOT QUITE THE SAME as it was in WW2; rates on bonds are set by the global economy.
Which is precisely why your whole model is discredited, ahistorical, and fundamentally autocratic.
Sucks that it still by consensus runs the country and the world, eh? :-)