I didn't work on the GAO piece. Re: the SS 1%, the thing people miss is that it never jumps on you all at once. It builds up imperceptibly over the next 30 years.
http://www.socialsecurity.gov/OACT/TR/2010/VI_OASDHI_GDP.html#159076 <http://www.socialsecurity.gov/OACT/TR/2010/VI_OASDHI_GDP.html#159076>(Table VI.F4) So the adjustment for any year to year period is much less than a percent of GDP. As for MMT, I understand it as boiling down to the point that a sovereign nation cannot default on debts in its own currency, so the issue is really the inflationary threat from monetizing the debt and the Fed's ability to deal with it when and to the extent appropriate. On Fri, Apr 22, 2011 at 9:23 AM, Doug Henwood <[email protected]> wrote: > > On Apr 22, 2011, at 9:17 AM, Max Sawicky wrote: > > > Who's ignoring it? > > That GAO presentation - which I assume you had a hand in - and Jamie > Galbraith when I interviewed him yesterday. > > > What you count depends on what question you are asking. > > > > Trading in Federal securities can affect interest rates, investment, > employment, and GDP. The accretion of publicly-held debt is uncertain and > by long-run projections, unsustainable. Accumulation of non-tradable > securities by the SS Trust Fund is foreseeable, sustainable, and already > baked into the cake. So it can make sense to distinguish between the two. > > Yes, but not ignore. The nonpublic share brings the debt/GDP ratio to 100%, > which is very close to the level at the end of WW2, and not the much more > modest-seeming 70%. > > > The SS draw on cash outside of annual 'tax income' (proceeds of payroll > tax and income tax on SS benefits) is inside of 1.5% of GDP over the next 80 > years and grows very slowly once the baby boom has retired. > > SS isn't a big fiscal deal, I'll admit, but given the idiocy of fiscal > politics in the USA, what do you think a fight over 1% of GDP is going to > look like? The whole arrangement was a big punt anyway. > > > I am less than fully confident in 'modern monetary theory' though it is > growing on me. > > Oh, please, not that. That stuff is like free crack. > > Doug > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l >
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