politics

Posted To Stephannie Kelton’s Substack Newsletter 04/27/2025

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Portlander: Tariffs are inflationary, while a trade war is recessionary. Congressional Republicans hope to pass a big deficit busting tax cut next month which could forestall recession but boost inflation. But tariffs raise revenue and reduce the deficit, which will cool down the economy. So, what will the net effect be? What does MMT recommend to Congress and the Fed?

I guess that will depend on the goal of economic policy. Let’s assume the goal of Congress is to try to avoid a global recession amidst a trade war. But then, what should the complementary goal of the Fed be? To accommodate or tighten? Wouldn’t MMT say “go ahead, cut taxes, don’t let the ‘deficit myth’ get in the way; raising interest rates aren’t the answer for tariff-induced supply-side problems, so let interest rates drop”? If so, then the deficits from tax cuts would be financing U.S. consumers to keep buying imports with tariffs, while other countries import less from the U.S. with their own tariffs. While big tax cuts and a loose Fed may avoid a global recession, it sure would worsen the trade and fiscal imbalances. So, please tell me: what is the goal of economic policy today? Have we even defined the problem? Does policy even fit the problem? Do economists even agree on what the problem is?

If the problem is correcting structural trade imbalances, why not forget tariffs, lower interest rates, and let the dollar fall 30% to where it was in 2010? Do economists even agree that eliminating structural trade balances is a good idea in a highly integrated global economy? If so, is having the dollar serve as reserve currency for the world the root cause of the problem (per Triffin’s Dilemma)?

As Einstein said, “if I had but one hour to save the world, I’d spend the first 55 minutes defining the problem.” Isn’t the herd mentality of the economics profession, which cheered the glory of free trade for decades while ignoring the social costs of lost jobs and whole communities in the U.S. part of the problem? Can’t economists unite around a positive vision for this country? Can Stephanie help in this task? We seem to be sleep-walking to disaster.

Me: Interesting post. My response to Einstein is: Spend 10 minutes discovering the deepest problem (an old paradigm gone on for too long) and spend however long it takes you to realize that nothing short of a new paradigm…is the necessary and applied solution. Analyzing historical paradigms to find their signatures is a good start. Recognizing that the entire body of “free” market theoretics is a misnomer is very important because, as you point out in your post…nothing actually works because it swings from half truth to half truth reforms which is indicative of its lacking any known and enforceable barriers within which human freedom can actually exist. You want increased commercial and individual economic freedom? Find the new monetary paradigm and apply it strategically. Why? Because money makes the world go ’round for enterprise and the individual yet the dumb shits among us insist on creating austerity instead of finding a way to resolve the anomalies we all obsess about by stategically applying the new monetary paradigm of GIFTING, using MMT’s insight that money is created with accounting entries, at the point of retail sale with a 50% Discount/Rebate policy.

Me: And here’s the final realization that one is really on to something big: Serendipity, that is when doing something new not only solves problems in the area under analysis, but surprisingly enables/causes improvements in other areas of life thought not relevant or even possible.

Who’d have thunk that bean counting/double entry bookkeeping and Gifting applied to the economy…could be the greatest opportunity to self actualize gratitude for a gift…since meditation and prayer??? Or is the idea behind Christmas (an aspect of the natural philosophical concept of grace as in gifting) entirely bunk?

Me: Yes, Trump is the USA empire’s equivalent of Caligula. He nominated the horses of Hegseth, Patel and Bondi didn’t he? Where’s the centurian guard…when you really need them?

Actually there’s probably ways to castrate him politically. I should pitch the new monetary paradigm to him. Its completely unorthodox which he’d probably like for its illogic and initial outrage and chaotic effects. Republicans recognize and go for power much better than democrats do. The lack of response by Stephanie and general refusal to look at the temporal universe effects of my posts by all but a few here is proof of that. Now that I think about it him advocating for it might be what brings out financial seal team 6 and saves us from hyper vomiting for another 3.5 years.

Posted To Stephanie Kelton’s Substack Newsletter 01/31/2025

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Creating and distributing money has always been the route to economic good times and during wars, winning them. Even deeper and more important than that historical fact is awakening to the deepest and longest unresolved economic problem which is the monopolistic monetary paradigm that new money can only be created and distributed as debt, i.e. Debt Only…which the banks wield and the government foolishly affirms. We need to make that fact as conscious as we possibly can, and resolve it by strategically and intelligently integrating the new monetary paradigm of Gifting into the Debt Only system. MMTers are actually late comers to the fact that new money is crerated by accounting entries. C. H. Douglas of the Social Credit movement between the world wars recognized this long before them. Douglas was a very clear minded individual, but like virtually everyone he was still a victim of acculturated false orthodoxies like the classical economic idea of general equillibrium which wed to the monopoly monetary paradigm prevents one from considering the single policy that would be a paradigm change all by itself, namely a 50% Discount (credit to the consumer) at retail sale/Full Rebate (debit to the back to the merchant). This policy mathematically doubles everyone’s purchasing power while implementing beneficial price and asset deflation…because retail sale is the terminal ending point of the entire economic process where production exits the economy and becomes consumption and (my own new macro-economic insight) EVERYONE participates in retail sale so its the single aggregative as in macro-economic point in the entire economic process…and so the perfect place to implement monetary policy. Secure the new monetary paradigm’s benefits by 1) taxing greedflation and any other bogus “increase” in costs at a rate of 100%, 2) index the retail discount/rebate to any legitimate inflationary cost increases 3) regulate with the additional policies in my book “Wisdomics-Gracenomics: The New Monetary Paradigm and It Policies” that rebutt orthodox critiques and resolve the other anomalies of the current paradigm.

Where is MMT on this?

MMT is a good reform bucking the same civilization-long moral and intellectual acculturation around the concept of debt. However, they need to up their game to paradigmatic analysis because reforms are always palliatives with half lives of decades or less and new paradigms are deep and permanent systemic-wide changes. The simplicity of new key applied ideas have always been where the power actually is. That may be an affront to the intellectual vanities of the erudite, but its historical fact.

The best way to explain a new concept is to find the places and ways to implement it in the world that the individual can easily experience for themselves. Thats what the 50% Discount/Rebate at retail sale and 50% Gift of Interest/Debt jubilee at point of loan signing does in spades because everyone participates in retail sale and increasingly in things like mortgages.

If you’re for free profit-making markets you can’t be for a monopoly paradigm wielded by a single business model and delusionally acquiest in by the government. If you do you’d have to say that The Reformation was wrong for breaking up the monopoly paradigm the Roman Catholic church had on salvation via its sacraments ONLY.

The issue that the general populace cares about is inflation. Hence, end inflation forever by implementing the two 50% price reduction and debt jubilee policies I suggest at retail sale and point of loan signing, and tax any increase in final costs that is a fraud at a rate of 100%…and proceed to a liberal progressive political coalition greater than The New Deal.

Integrating a new monetary paradigm of Gifting into the debt, as in burden to pay/repay Only system, makes keeping Social Security flush much easier. Why? Because what is the payment/retail point for your social security insurance? Thats right, the payroll tax that comes out of your wages. With the 50% Discount/Rebate policy that amount is reduced by…50%, thus saving you money.

The combination of the 50% retail discount and another policy that aligns with the new monetary paradigm, i.e. a UBI/universal dividend of say $1000/mo. enables us to not only half the individual cost of social security they also make welfare and unemployment insurance completely redundant…because if every adult gets a $1000 monthly dividend that with the 50% retail discount policy means they have $2000/mo. worth of purchasing power…so then the payroll taxes for these services, that both employees and emplyers pay, can be eliminated.

Just another example of how a monetary mega-paradigm change integrates the self interests of traditionally opposed constituencies.

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Thats because you’re not doing the simple math of equal debits and credits that sum to zero at the strategic points I suggest is done. $100 worth of groceries minus 50% is $50 and yet with the rebate the merchant gets their full price. $100 worth of social security insurance premium minus $50 with the 50% discount means you get an extra $50 net income on your paycheck and yet $100 goes to fund social security.

Here’s another mind blowing truth that the new monetary paradigm enlightens: Accounting/double entry bookkeeping with its equal debits and credits that sum to zero operation is actually reflective of the quantum reality where particles pop in and out of existence.

I’m the one trying to actually resolve problems and explode delusions with a paradigm change instead of offering up palliative reforms like MMT. And Rube Goldberg describes the current system that is actually just a double bind in disguise overseen by Finance and The FED’s ham handed monetary policies that punish way too much, way to long and from which only the wealthy oligarchs and the banks emerge unscathed.

THE SOLUTION IS ALL ABOUT A NEW MONETARY PARADIGM!

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No, its algebra, i.e. -5 + 5= 0, and accounting equal debits and credits that sum to zero, and a new macro-economic/aggregative insight that EVERYONE participates in/is the effect of price at retail sale and so it is the perfect place to implement monetary policy, and last but not least its paradigmology which is my own new body of knowledge whose primary insights are 1) historically every new paradigm is in complete conceptual opposition to the current anomalous paradigm concept, which incidentally also makes it harder for people to perceive because the acculturation process is largely an unconscious accepting process for the mass of individuals, and in the modern age of science which highly values logic its an additional hurdle for intellects to wrap their heads around, and 2) the mental and temporal universe effects of every historical paradigm change have always been an aspect or aspects of the natural philosophical concept of grace.

Posted To Stephanie Kelton’s Substack Newsletter 12/01/2024

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MMT is correct about the mechanics of money creation. However, its problem as well as every other present monetary theory left, right and center is, its a palliative instead of the paradigm change we urgently need to resolve the anomalies (chronic individual austerity, chronic erosive inflation and pissing and moaning about the seeming double bind modern economies struggle with, but never finding a resolution) of the present paradigm. In other words we need ACTION. ACTION, WE NEED CHANGE AND WE NEED IT REEEEAAAL FAST! Thats what a new paradigm, a new operant applied concept accomplishes.

The present paradigm is Debt Only as in the Burden to Repay/Debt as the Sole/Monopolistic Form and Vehicle for the Creation and Distribution of New Money.

A new paradigm requires an entire policy program because economics is complex and humanity is not an entirely rational or ethical species. However there IS a single policy that implemented mathematically resolves the above anomalies all by itself. That policy is a 50% Discount/Rebate at retail sale. This policy is the very expression of the new monetary paradigm (Direct and Reciprocal Monetary Gifting) and its point of implementation, (retail sale) is actually a new macro-economic insight as in the single aggregatively/universally participated in point in the entire economic process and hence is the perfect place to implement a monetary policy. Thank you non-Nobel prize committee for economics.

I’m sure a lot of people would say that a 50% Discount/Rebate at retail sale would cause way over consumption. Let me address this. First, doubling purchsing power does not ipso facto result in a 100% increase in consumption/economic through put. Not everyone is going to eat twice as much or buy twice as many hand bags or pairs of under wear as they did before. Second, most people will probably want to do what most do with additional income which is invest. This could be encouraged and rationally directed by the government creating 5-6% eco/energy & Infrastructure bonds. Third, on top of this being a smart thing to do voluntarily we could implement a sliding scale percentage of required investment of gifted money into these same bonds. A gift of investment is still a gift and so aligns with the new monetary paradigm. Fourth, amend the FED’s charter so their mandate goes from hand-maiden or bail bondsman of the banks to overseer/guarantoor of the planet’s future.