We should tax the rich...but not to fight inflation. As multiple tax giveaways to the wealthy had demonstrated, giving rich people more money doesn't translate into the hoped-for stimulus that would come from new private-sector spending.
By definition, the rich have their material needs met. Even if they rush out and buy show-horses, ostrich-leather jackets, or super-yachts, these only absorb a minute fraction of their windfalls - the rest get pumped into assets, creating asset bubbles.
That was constrained, and to dampen private sector demand, the USG clawed back some of the war-wages (taxes) and encouraged voluntary deferred spending (bonds).
Biden touts his $2.2t proposal as "fiscally responsible" because of its "payfors" - tax increases to match new spending with new taxing. Taxing is anti-inflationary (because it reduces private-sector spending power, leaving more goods on the market for the public sector).
He explained America didn't depend on taxes or war bonds to pay for the war effort - rather, these were a way to sequester the new money being spent into existence to pay for the war effort, so that those wages didn't compete with government spending for rubber, metal, etc.
The US government could make all the dollars it wanted, but it couldn't conjure up rubber or steel.
It's been a current in economic thought for a long time. Back in 1945, New York Federal Reserve Chairman Beardsley Ruml gave a speech to the American Bar Association called "Taxes for Revenue Are Obsolete," explaining how America financed the war.
The right way to address America's massive real debts isn't to choose an arbitrary dollar figure and decide which debts we'll service - it's to decide what we want America to be and then figure out how we'll resource that vision.
Or as Bernie Sanders puts it: "You don’t start off by coming up with a sum and working down. You start out by looking at the needs that need to be addressed and adding them up."
This Modern Monetary Theory framework is gaining currency today, but it's hardly new.
But creating domestic capacity is a long-game and we need to spend a lot of money *right now*, which is why Kelton argues *against* Biden's "Buy American" rules: "There will be no lack of eager foreign producers if we need to relieve some demand pressure on the domestic front."
As Kelton explains: procurement rules that give preference to onshore goods and taxes that discourage offshoring are both anti-inflationary measures, because they increase the pool of goods for sale in US dollars, meaning more dollars can be safely spent.
Of course, there's a simple solution to this: reform immigration policy to welcome the millions of people who are literally dying to come here, trained and untrained alike (worker training is another job that needs doing). Type zeroes into a Treasury spreadsheet so we can pay them a socially inclusive wage with decent benefits. Put them to work alongside the people who are already here, building the country's productive capacity so that we can make more things that are for sale in dollars.
But the $10t worth of spending America needs to attain resiliency for the coming century of climate emergencies will put every American who wants a job to work for as many years as they are willing to work and still not fill the gap.
That's why an anti-inflationary spending program isn't about constraining spending, it's about increasing the pool of things governments can buy. Right now, we have lots of un- and under-employed people who need good jobs doing necessary care, climate and infrastructure work.
As Stephanie Kelton writes in the NYT, the US can't run out of dollars; debts do not constrain federal spending. Instead, the US government is constrained by resources: available workers, idle factories, raw materials.
The USG can make as many dollars as it needs by typing zeroes into a spreadsheet, but it conjuring more laborers and productive apparatus is far more difficult. Inflation isn't the result of too many dollars, it's the result of too few things you can buy with those dollars.
Biden rightfully calls the $2.2t stimulus package a "once-in-a-generation investment in America," but as AOC points out, it's not nearly enough - the $40b for housing nationwide would barely cover the bill for NYC alone.
The country and the Democrats can't afford to smallball this one. The *real* debts we've racked up - infrastructure, health, education and climate - matter far, far more than the "national debt" that goldbug bedwetters never stfu about.
@pluralistic I sorta figured something like this, was why i had a hard time finding work when i put my college experience on my resumes (now i dont even mention it)
but the extensive hour long personality tests and the like they force us to do i did not think of- thank you for pointing this out!!
A couple of articles on having worthy rivals (#competition ) and talking about #monopolies from Cory Doctorow (in regards to using #AI technology) and Daniel A. Hanley
If you want the short version of the first one follow @pluralistic or the long version follow the website (or join the email list). Also if your into audio then: https://pluralistic.net/2021/04/06/digital-phrenology/#htdsc
The second article gives the #history up-to current day discussion.
@pluralistic My 15 year old antivietnam war activist ass was stalked by the NYPD Bureau of Special Services, aka The Red Squad. Thugs. Eventually 'disbanded' (🤣 Not!). What Rummy said...
The EU Online Terrorism Regulation is a bad deal for fundamental rights. The EU Parliament should reject it. #TERREG https://www.eff.org/deeplinks/2021/04/eu-online-terrorism-regulation-bad-deal