Yeah, I've never understood churches being exempt from taxation. I know the argument is that the government could use taxation as a method to infringe upon which churches it doesn't approve of, but if all churches were forced to pay exactly the same rate it would be impossible to discriminate against a specific one.

Of course, churches and religions get away with a lot of crimes that anyone else would get destroyed for. Looking at you, Catholic Church!

I agree....mostly.
My plan, for when I'm emperor, is one tax rate based on the budget that pays for everything in full (no deficit, and pay off the debt) and puts 2% in the bank yearly for future unforseen disasters, with a base deduction of whatever poverty level in your state is +100%, so people barely out of poverty pay nothing.
Whatever that number is should be applied across the board, no loopholes, no special tax rates for certain types of income, no extra exemptions, nothing.
Also, 100% tax on money hidden offshore to avoid taxation and use RICO on the church(s) to pay off most of the debt first.


Yes, there were many reasons why the job market was good in the 50's for white guys, most of which are unthinkable or impossible today. For instance, a single income household with one average salary could not only save, they could often have a continuously rising standard of living. There's no way today, even on two incomes most families are in debt and downwardly mobile.

I think it should be paid for by co2 taxation. The cement makers free the co2, they should pay all costs to capture it again, not me. I'm not making profit from their co2 production, they are, so they should pay for the damages, that creates incentives for producers to not release it in the first place, government subsidies to recapture it without taxation on it's production do the opposite.

Your talking about it historically though. Historical abuse and mistreatment of Aboriginal people in Canada has been acceptable to discuss for at least a generation or two now, up to formal apologies and enormous numbers of court cases and cash settlements around the myriad past injustices.

The trouble is, even while addressing all the historical problems, there still exist new ones right now.

Typical conditions on Aboriginal reserves in Canada are unacceptably awful. You can have a thriving municipality right neighbouring an aboriginal reserve that is a mess of dilapidated homes, boiled water and grossly increased rates of unemployment, substance abuse and suicide. Small wonder then that increased crime rates also come along with all that.

Even that you can talk about, though the increased crime rate will get you in trouble for flirting with being racist against aboriginals.

What you can't talk about is many of the causes of the disparity.

Aboriginal reserves operate under a different legal framework than the neighbouring municipality. They operate under a different framework of governance. They operate under a different system of taxation. Organisation of all related government services like education, healthcare, policing and civil works like roads, water and sanitation are ALL different if you're on a reserve.

Talking about all that you need to be very careful how you say it, because if your not careful my above observations are a statement that coloniser systems are superior to aboriginal ones.

Private property rights are IMO an even hotter topic. The dilapidated housing on a reserve 10 minutes away from the municipality with everything in order is a direct result of who is responsible for maintaining them. In the municipality if a roof is missing shingles, the owner replaces them. If a window is broken, the owner replaces it. On the reserve though, the community is the owner. Unsurprisingly, that abstraction means maintenance on the homes is worse. If the mayor was responsible for using tax dollars to maintain all the homes in the neighbouring municipality it'd be a mess too. This leads to the poor aboriginal family stuck in a destroyed and overcrowded home and a chief saying sorry, the Canadian colonisers didn't give us enough money to fix your place, go yell at them. This just stirs up the Winnipeg citizens I mentioned earlier to respond with wonderment at why you don't fix your own home up yourself instead of protesting hopelessly for the government to hand out the money to do it for you.

The differential treatment still in place now, today is a cancer and needs to be fixed but calling it out like that would get me in trouble.

Considering the rally cry that sounded the birth of our nation is "No taxation without representation", it's incredibly hypocritical of us to allow this to continue, much less to cause it.
We need to end colonialism in America and either bring these territories in or let them go, imo, preferably the former.

I upvoted your video because I appreciate the fact you're trying to present a cognizant backing for a lot of the things you say and believe.

I don't know if this was your strongest card, 'tho. He's well-spoken, with impressive CV and an interesting argument. The problem is he's cherry-picking the entire video and sometimes even resorting to rank hypocrisy (it's anti-American to campaign to minorities with a grievance, yet pulling the same stunt got Trump elected when he did it with white people).

I notice he falls back on the Coastal Elite trope, as if being successful and having ideals is somehow an antithesis to all that's good and pure about corn farmers in Kansas. Somehow, it's all those darned people living in that magical wonderland of those who can smell sea salt from the front porch of their homes that fucked middle America.

No. Sorry. Wrong answer.

40 years of Republican-dominated rule, 40 years of a sick social experiment being run by the disciples of Any Rand, is what fucked those people. 40 years of tax cuts for the rich and excess taxation on the poor; 40 years of stealing from schools to pay for subs; 40 years of setting the wolves among the sheep in the form of stripping consumer protections; 40 years of historical revisionism; 40 years of the kind of government that should have landed the perpetrators 12 steps from 6 hooded men with 5 loaded rifles.

Republicans have been calling the shots since Reagan, but yet 8 years of the black dude somehow set the country on a frenzy of self-destructive idiocy unseen since the French Revolution?

Look, I appreciate that you're trying to raise the tone with videos like this. But if you're trying to intellectually shore up the dike, I've got bad news for you: the facts will rarely be on your side.

15:05-15:30: you tell Mr and Mrs Front-Porch that your loonie of 1871 cannot be compared to your loonie of 2013 (year of this interview). You went off the gold standard in '33, you abandoned the peg in '70, and your currency has been free-floating ever since. Yes, the ratio of debt to GDP has some importance, but so does the nature of your currency. Just look at Greece and Japan, where the former uses a foreign currency and the latter uses its own, sovereign, free-floating currency.

Pay back the national debt -- have you thought that through?

First, the Bank of Canada is the monopolist currency issuer for the loonie, so explain to me in detail just how the issuer of the currency is supposed to borrow the currency from someone else? If you're the issuer of the currency, you spend it into existence, and use taxation as a means to create demand for your currency, and to free resources for the government to acquire, because you can only ever buy what is for sale.

Second, every government bond is someone else's asset. An interest-bearing asset. A very safe asset, in the case of Canada, the US, the UK, Japan, etc. "Paying back the debt" means putting a bullet into just about every pension fund in the world that doesn't rely exlusively on private equity or other sorts of volatile toilet paper.

There's a distributional issue with these bonds (they are concentrated in the hands of the non-working class, aka the rich), no doubt about it. But most of the other issues are strictly political, not economical.

What if the interest rate rises 1%? The central bank can lower the interest rate to whatever it damn well pleases, because nobody can ever outbid the currency issuer in its own currency. Remember, the central banks were the banks of the treasuries. The whole notion of an independent central bank was introduced to stop these pesky leftists from spending resources on plebs. That's why central banks were often removed from democratic control and handed over to conservative bankers. If the Treasury wants an interest rate of 2% on its bonds, it tells its central bank to buy any excess that haven't been auctioned off at this rate. End of story.

What if the market stops buying government bonds? Then the central bank buys the whole lot. However, government bonds are safe assets, and regulations demand a certain percentage of safe assets in certain portfolios, so there is always demand for the bonds. Just look at the German Bundesanleihen. You get negative real rates on 10 year bonds, and they are still in very high demand. It's a safe asset in a world of shitty private equity vaporware.

But, but.... inflation! Right, the hyperinflation of 2006 is still right around the corner. Just like Japan hasn't been stuck near deflation for two decades, and all the QE by the BoE and the ECB has thrown both the UK and the Eurozone into double-digit inflation territory. Not! None of these economies are running near maximum capacity/full employment, and very little actual spending (the scary, scary "fiscal policy") has been done.

But I'm going off track here, so.... yeah, you can pay back your public debt. Just be very aware of what exactly that entails.

As for the poster-child Latvia: >10% of the population left the country.

Here's a different poster-child instead, with the hindsight of another 4 years of austerity in Europe after this interview: Portugal. The Portuguese government told Master of Coin Schäube to take a hike, and they are now in better shape than the countries who just keep on slashing.

On a different note: Marx was wrong about the proletariat. Treating them like shit doesn't make them rebellious, it makes them lethargic. Otherwise goons like Mario Rajoy would have had their comeuppance by now.

PS: Blyth's book on Austerity is an absolute must-read for anyone interested in its history or its current effects in particularly the Eurozone.

Not true.
The treasury borrows money from those with money to invest, other nations, and corporations by issuing and selling treasury bonds...interest bearing IOUs. That's why, when Trump suggests defaulting on them, it's a disastrous suggestion. If we even hint we won't pay on our debt, no one will buy bonds anymore (they aren't a great investment, but are considered "safe" as is, but not if we default) and our government grinds to a halt with no cash and no credit.

The federal reserve is not the only agency to lend money, the treasury prints more of it for the government, making every dollar worth less, but creating the numerical dollars needed to pay for our debts without actually collecting any. This is actually a flat tax, because it takes the same amount of every dollar that exists with no loopholes or escape for anyone with a dollar. If we want to stop this type of taxation, we need to return to the gold standard and stop playing fast and loose with the value of a dollar....imo.

@newtboy,
Compromise implies give and take, not a one sided one way capitulation.
I'm glad to hear that, I dearly hope that both parties attempt the same. Failing both, the democrats absolutely must compromise. They need more voters and it's on them to reach out. Maybe back track on carbon taxation. Maybe allow that there is a distinction between cracking down on illegal immigration and racism against non-whites. Maybe entertain more protectionist policies on trade agreements to encourage domestic production. Regardless of any of those individual compromises being a good or bad idea, they are all ideas that resonated with voters that ditched Clinton and they at least seem potential olive branches to reach out with.

You also said:
I really think the outrage over pc thugs is a red herring. If you don't live on a liberal campus, you'll probably never meet one.
As I said, I'm from Canada so I see it daily. The over the top PC agenda and social justice fights are everywhere up here. The examples Norm gave are ones we see everywhere up here.

Example, the local university student union had an active year. They had shutdown a student club because it was pro-life and then found themselves being sued.

Our public education system bars any christian activity in schools, even so far as barring the Gideons from extending an offer of free Bibles to students who would request it. At the same time as that separation of religion from the schools is happening though, Aboriginal religion and spiritual practices and beliefs are part of the normal curriculum. And I don't mean cultural background, but as active participants in cleansing of spiritual auras and learning the function of the spirits of everything.

The silent mass of white christians up here see where the PC stuff goes and are getting a bit sick of it.

Is it that hard to agree with me?

Your just rewording exactly what I said. Your just rewording exactly what Bill Burr said. Trump didn't win by bringing out a whole bunch of brand new racist voters that stayed home when Obama was running. It was Hillary's failures, and her party's failures that were the difference in Trumps win.

I know that leads to a more uncomfortable reality were we don't have the black and white ability to blame everything on the evil racists who voted Trump in, but it is the reality. Clinton and her party LOST the votes of too many people, the numbers on the Republican side show pretty clearly it wasn't extra votes Trump gained by courting racists that turned the election.

That reality though demands a lot of self reflection from the Democratic party about how they failed and why, and they have to do it at the time when the country needs them as a counter balance the most. The trick is, if they don't get back the voters they lost they can't be a counter balance.

Here's part of the problem: people blaming Trumps win on racists voting for him, or choosing to believe that everyone who voted for Trump is a racist. That's just not the reality that is confronting you guys in the US. Most voters in this election, like all the past elections, voted their party ticket as they and their grandpa always have. That's the one of the biggest influences on how folks vote. Surveys also show that given the choice between a ideals and jobs, people choose jobs. The democratic party was promising carbon taxation at the same time as Trump was promising to bring back coal and oil jobs. Now all the counties that rely on coal or oil have a very different reason to vote for Trump outside of his racist remarks.

Oh, and check out Bill Clinton's remarks on Robert Byrd. Does that association to the KKK make it hard for racists to choose between Trump and Clinton?

People don't trust politicians in general and assume them all to be evil, corrupt and untrustworthy so dismissing some of Trumps worse parts came a bit easier for many.

Wasn't taxation without representation the reason we got rid of our last king?

Saying that "Taxation is the price we pay for a decent civilization" is the same as saying that "Human sacrifice is the price we pay for having a sun."

Such "primitive" ideology (with its absurd beliefs, fetishes, taboos, and weirdnesses) is reflected by a belief in strange elites as being either godlike ("Bernie!") or demonic ("Koch!"), along with a total ignorance about the functioning of the (alien) banking system and the military empire that it feeds.

Suspending my disbelief that you owned Apple stock for the time-being, I wonder how much you paid on Apple's "profit" taxes? And, on what specifically? Dividends? Selling stock? Did you pay more than you were legally required to pay?

At any rate, you won't ever get Apple to pay more than they're legally required to pay, but feel free to whine about it. It'll make zero difference.

Companies will continue avoiding as much taxation as they can (and so will most individuals). You can complain about corporate executives not paying "enough" (based on your arbitrary numbers as to what's "fair"), while they will continue to pay far more in taxes than you will ever make.

Your "contribution" to civilization is no doubt negligible (to say nothing of the state's wasteful use of tax dollars used to build a "decent civilization," the vast majority of which -- unbeknownst to you -- goes to the ways and means of slaughtering innocent people overseas). You must be very proud... or maybe you just don't care.

@greatgooglymoogly

Thanks for taking the time to watch it.

Like I said in my previous comment, this talk needs to take a lot of shortcuts, otherwise its length would surpass anyone's attention span.

So, point by point.

By "balanced budget", I suppose you refer to the federal budget. A balanced budget is not neccessarily a bad thing, but it is undesirable in most case. The key reason is sectoral balances. The economy can divided into three sectors: public, private, foreign. Since one person's spending is another person's income, the sum of all spending and income of these three sectors is zero by definition.

More precisely: if the public sector runs a surplus and the private sector runs a surplus, the foreign sector needs to run a deficit of a corresponding size.

Two examples:
- the government runs a balanced budget, no surplus, no deficit
- the private sector runs a surplus (savings) of 2% of GDP
- the foreign sector must, by definition, run a deficit of 2% of GDP (your country runs a current account surplus of 2% of GDP)

- the government runs a deficit of 2% of GDP
- the foreign sector runs a surplus of 3% (your current account deficit of 3%)
- your private sector must, by definition, run a deficit of 1% of GDP, aka burn through savings or run up debt

If you intend to allow the private sector to net save, you need to run either a current account surplus or a public sector deficit, or both. Since we don't export goods to Mars just yet, not all countries can run current account surpluses, so you need to run a public sector deficit if you want your private sector to net save. No two ways about it.

Germany runs a balanced public budget, sort of, and its private sector net saves. But that comes at the cost of a current account surplus to the tune of €250B. That's 250 billion Euros worth of debt other countries have to accumulate so that both the private and public sector in Germany can avoid deficits. Parasitic is what I'd call this behaviour, and I'm German.

If you feel ambitious, you could try to have both surplus and deficit within the private sector by allowing households to net save while "forcing" corporations to run the corresponding deficits. But to any politician trying that, I'd advise to avoid air travel.

As for the "devaluation of the currency", see my previous comment.

Also, she didn't use real numbers, because a) the talk is short and numbers kill people's attention rather quickly, and b) it's a policy decision to use debt to finance a deficit. One might just as well monetise it, like I explained in my previous comment.

Helicopter money would be quite helpful these days, actually. Even monetarists like AEP say so. If fiscal policy is off the table (deficit hawkery), what else are you left with...

As for your question related to the Fed, let me quote Eric Tymoigne on why MMT views both central bank and Treasury as part of the consolidated government:

"MMT authors tend to like to work with a consolidated government because they see it as an effective strategy for policy purpose (see next section), but also because the unconsolidated case just hides under layers of institutional complexity the main point: one way or another the Fed finances the Treasury, always. This monetary financing is not an option and is not by itself inflationary."

MMT principle: the central bank needs to be under democratic control, aka be part of government. The Fed in particular can pride itself on its independance all it wants, it still cannot fulfill any of its goals without the Treasury's help. It cannot diverge from government policies too long. Unlike the ECB, which is a nightmare in its construction.

Anyway, what does he mean by "one way or another the Fed finances the Treasury, always"? Well, the simple case is debt monetisation, direct financing. However, the Fed also participates by ensuring that Primary Dealers have enough reserves to make a reasonable bid on treasuries. The Fed makes sure that auctions of treasuries will always succeed. Always. Either by providing reserves to ensure buyers can afford the treasuries, by replacing maturing treasuries or buying them outright. No chance whatsoever for bond vigilantes. Betting against treasuries is pointless, you will always lose.

But what about taxation as a means to finance the Treasury? Well, the video's Monopoly example illustrated quite nicely, you cannot collect taxes until you have spent currency into circulation. Spending comes before taxation, it does not depend on it. Until reserves are injected into the banking system, either by the Fed through asset purchases or the Treasury through spending, taxes cannot be paid. Again, monetary financing is not optional. If the Treasury borrows money from the public, it borrows back money it previously spent.

Yes, I ignored the distribution of wealth, taxation, the fixation on growth and a million other things. That's a different discussion.

Well, cheers for sticking with it anyway, I really appreciate it.

It's a one hour talk on the deficit in particular, and most of what she says is based on MMT principles that would add another 5 hours to her talk if she were to explain them. With neoclassical economics, you can sort of jump right in, given how they are taught at schools and regurgitated by talking heads and politicians, day in and day out. MMT runs contrary to many pieces of "common sense" and since you can't really give 10 hour talks everytime, this is what you end up with – bits and pieces that require previous knowledge.

I'd offer talks by other MMT proponents such as William Mitchell (UNSW), Randy Wray (UMKC) or Michael Hudson (UMKC), but they are even less comprehensible. Sorry. Eric Tymoigne provided a wonderful primer on banking over at NEP, but it's long and dry.

Since I'm significantly worse at explaining the basics of MMT, I'm not even going to try to "weave a narrative" and instead I'll just work my way through it, point by point.

@notarobot

"Let's address inequality by taking on debt to increase spending to help transfer money to large private corporations."

You don't have to take on debt. The US as the sole legal issuer of the Dollar can always "print more". That's what the short Greenspan clip was all about. Of course, you don't actually print Federal Reserve Notes to pay for federal expenses. It's the digital age, after all.

If the federal government were to acquire, say, ten more KC-46 from Boeing, some minion at the Treasury would give some minion at the Fed a call and say "We need $2 billion, could you arrange the transfer?" The Fed minion then proceeds to debit $2B from the Treasury's account at the Fed (Treasury General Account, TGA) and credits $2B to Boeing's account at Bank X. Plain accounting.

If TGA runs negative, there are two options. The Treasury could sell bonds, take on new debt. Or it could monetise debt by selling those bonds straight to the Fed – think Overt Monetary Financing.

The second option is the interesting one: a swap of public debt for account credits. Any interest on this debt would be transfered straight back in the TGA. It's all left pocket, right pocket, really. Both the Fed and the Treasury are part of the consolidated government.

However, running a deficit amounts to a new injection of reserves. This puts a downward pressure on the overnight interest rate (Fed Funds Rate in the US, FFR) unless it is offset by an increase in outstanding debt by the Treasury (or a draw-down of the TT&Ls, but that's minor in this case). So the sale of t-bonds is not a neccessity, it's how the Treasury supports the Fed's monetary policy by raising the FFR. If the target FFR is 0%, there's no need for the Treasury to drain reserves by selling bonds.

Additionally, you might want to sell t-bonds to provide the private sector with the ability to earn interest on a safe asset (pension funds, etc). Treasury bonds are as solid as it gets, unlike municipal bonds of Detroit or stocks of Deutsche Bank.

To quote Randy Wray: "And, indeed, treasury securities really are nothing more than a saving account at the Fed that pay more interest than do reserve deposits (bank “checking accounts”) at the Fed."

Point is: for a government that uses its own sovereign, free-floating currency, it is a political decision to take on debt to finance its deficit, not an economic neccessity.

"Weimar Republic"

I'm rather glad that you went with Weimar Germany and not Zimbabwe, because I know a lot more about the former than the latter. The very, very short version: the economy of 1920's Germany was in ruins and its vastly reduced supply capacity couldn't match the increase in nominal spending. In an economy at maximum capacity, spending increases are a bad idea, especially if meant to pay reparations.

Let's try a longer version. Your point, I assume, is that an increase in the money supply leads to (hyper-)inflation. That's Quantity Theory of Monetary 101, MV=PY. Amount of money in circulation times velocity of circulation equals average prices times real output. However, QTM works on two assumptions that are quite... questionable.

First, it assumes full employment (max output, Y is constant). Or in other terms, an economy running at full capacity. Does anyone know any economy today that is running at full capacity? I don't. In fact, I was born in '83 and in my lifetime, we haven't had full employment in any major country. Some people refer to 3% unemployment as "full employment", even though 3% unemployment in the '60s would have been referred to as "mass unemployment".

Second, it assumes a constant velocity of circulation (V is constant). That's how many times a Dollar has been "used" over a year. However, velocity was proven to be rather volatile by countless studies.

If both Y and V are constant, any increase in the money supply M would mean an increase in prices P. The only way for an economy at full capacity to compensate for increased spending would be a rationing of said spending through higher prices. Inflation goes up when demand outpaces supply, right?

But like I said, neither Y nor V are constant, so the application of this theory in this form is misleading to say the least. There's a lot of slack in every economy in the world, especially the US economy. Any increase in purchases will be met by corporations with excess capacity. They will, generally speaking, increase their market share rather than hike prices. Monopolies might not, but that's a different issue altogether.

Again, the short version: additional spending leads to increased inflation only if it cannot be met with unused capacity. Only in an economy at or near full capacity will it lead to significant inflation. And even then, excess private demand can easily be curbed: taxation.

As for the Angry Birds analogy: yeah, I'm not a fan either. But all the other talks on this topic are even worse, unfortunatly. There's only a handful of MMT economists doing these kinds of public talks and I haven't yet spotted a Neil deGrasse Tyson among them, if you know what I mean.