tag:blogger.com,1999:blog-5713178645208582139.post4971487320562218308..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: A Foolproof Approach to Monetary Policy For Both Fiscalists and MonetaristsDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-5713178645208582139.post-78887178169596704332013-06-17T05:11:31.391-05:002013-06-17T05:11:31.391-05:00What do you think the government did from 2009-201...What do you think the government did from 2009-2013? It massively cut federal taxes (total revenues fell to something like 14-15% of GDP, far below the historical trend), and financed it with massive amounts of QE.<br /><br />Sure, it wasn't at quite the magnitude you suggest. But it was still quite substantial, and it didn't work. The Fed's mortgage purchases probably had more of Joehttps://www.blogger.com/profile/15522209631824888717noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-9681191602181067012013-06-15T01:10:26.869-05:002013-06-15T01:10:26.869-05:00Forget punk "helicopter drops."
Send in...Forget punk "helicopter drops."<br /><br />Send in the B52s for blanket bombing runs.<br /><br />Cut federal taxes by a trillion dollars or two, and monetize all of it through QE and maybe more.<br /><br />Dudes, the problem is not inflation.<br /><br />We have an economy much less inflation-prone than in the 1960s, and we were in single-digits then (before deregging transportation, Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-30985543516018734582013-06-15T00:28:58.176-05:002013-06-15T00:28:58.176-05:00its a rule, not an emergency policyits a rule, not an emergency policyAnonymoushttps://www.blogger.com/profile/02665089266421768740noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-23312389004286173202013-06-14T18:52:04.932-05:002013-06-14T18:52:04.932-05:00I use the term liquidity trap loosely here for an ...I use the term liquidity trap loosely here for an economy stuck at the ZLB and in a slump, like we are now.Yes, I believe conventional monetary policy tied to a NGDPLT alone could get us out of such situations, but as the Fed has demonstrated sometimes central banks chose not to act. The helicopter approach can be viewed as insurance against central bank incompetence. David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-12970413614307514272013-06-14T17:46:52.333-05:002013-06-14T17:46:52.333-05:00David, if you want funds disbursed directly to hou...David, if you want funds disbursed directly to households (which I agree with, via an increase in the Earned Income Tax Credit) wouldn't you need Congress on board?<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-78435123310952389942013-06-14T17:05:21.283-05:002013-06-14T17:05:21.283-05:00----->Beckworth on the roles of monetary and fi...----->Beckworth on the roles of monetary and fiscal policy: http://www.themoneyillusion.com/?p=21867 Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-2892909899442396532013-06-14T15:15:18.128-05:002013-06-14T15:15:18.128-05:00Isn't "government spending" because ...Isn't "government spending" because there's not deficit spending is just new money created by the FED and the government give to the households. David correct me if I'm wrong.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-78174451723779517172013-06-14T15:07:37.963-05:002013-06-14T15:07:37.963-05:00I'm confuse if MMonetarists don't believe ...I'm confuse if MMonetarists don't believe in liquidity traps and and they claim that monetary policy is highly effective in zero lower bound why you make this case or this is just a emergency unconventional policy?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-54656990888040865262013-06-14T11:31:28.915-05:002013-06-14T11:31:28.915-05:00because it's government spending which adds to...because it's government spending which adds to the private sector's financial assets.hatricknoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-48470410759628072172013-06-14T10:26:17.379-05:002013-06-14T10:26:17.379-05:00Not with NGDP level targeting. It allows rapid cat...Not with NGDP level targeting. It allows rapid catch up growth (or contraction if needed), but still anchors long-term inflation. As I said in the post, it is nominal anchor. See second half of this post for more details: http://macromarketmusings.blogspot.com/2012/09/john-cochrane-michael-woodford-and.htmlDavid Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-12267046756750882992013-06-14T09:56:58.058-05:002013-06-14T09:56:58.058-05:00This would cause at least an double-digit inflatio...This would cause at least an double-digit inflation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-76554900502056915292013-06-14T09:35:00.404-05:002013-06-14T09:35:00.404-05:00How is "money financed fiscal" if is cre...How is "money financed fiscal" if is created by the FED not by taxation or deficit.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-45251415168746816822013-06-14T09:30:55.367-05:002013-06-14T09:30:55.367-05:00MILTON FRIEDMAN: "No, I've not, never bee...MILTON FRIEDMAN: "No, I've not, never been a communist. Never even been a socialist -- [though] it may well be that I harbored socialist thoughts at the time when I was an undergraduate. "<br /><br />http://www.pbs.org/wgbh/commandingheights/shared/minitext/int_miltonfriedman.html<br /><br />After the 50s he became a monetarist-libertarian-anti-government.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-86906105352180777362013-06-14T05:47:23.201-05:002013-06-14T05:47:23.201-05:00"that form of fiscal policy is a helicopter d..."that form of fiscal policy is a helicopter drop, a government program that gives money directly to households. The Fed would finance it and the Treasury Department would deliver it to each household." <br /><br />Could you please tell Scott Sumner this. You guys could start proposing this very sensible idea and Scott could continue to pretend that what he's advocating is monetary hatricknoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-78994457965248806932013-06-13T23:34:08.548-05:002013-06-13T23:34:08.548-05:00I suggest that Friedman did support “government gi...I suggest that Friedman did support “government giving money to households in the way that garcia pointed out.” In a paper in 1948 p.250-1, he advocates that in a recession, government should run a deficit funded by freshly printed money. Whether that deficit takes the form of “giving money to households” or expanding government spending is a meaningless distinction. The important point is that Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-89560333492256825602013-06-13T23:21:34.658-05:002013-06-13T23:21:34.658-05:00Milton Friedman - The Negative Income Tax: http://...Milton Friedman - The Negative Income Tax: http://www.youtube.com/watch?v=xtpgkX588nMAldreyMrhttps://www.blogger.com/profile/00354672746177530056noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-52668498848446106972013-06-13T23:07:11.801-05:002013-06-13T23:07:11.801-05:00Friedman did come up with helicopter money idea. S...Friedman did come up with helicopter money idea. See the end of Mark's comment above.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-40264429943915807912013-06-13T22:57:13.627-05:002013-06-13T22:57:13.627-05:00This comment has been removed by the author.AldreyMrhttps://www.blogger.com/profile/00354672746177530056noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-47029704567602695062013-06-13T22:28:29.257-05:002013-06-13T22:28:29.257-05:00The proposal from Friedman IS the actual earned in...The proposal from Friedman IS the actual earned income tax credit what I said is that Friedman would never have supported having the government giving money to families to complement monetary policy.<br /><br />The idea also sounds reminiscent of Keen’s “debt jubilee” idea. Hopefully I didn’t ruin it for everyone with that…. forget I said that!… It’s clearly Friedman’s helicopter drop! (What was Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-60726592732025001512013-06-13T20:41:19.062-05:002013-06-13T20:41:19.062-05:00You mean the same Milton Friedman who proposed a n...You mean the same Milton Friedman who proposed a negative income tax?<br /><br />"Milton Friedman, who died last week at 94, was the patron saint of small-government conservatism. Conservatives who invoke his name in defense of Social Security privatization and other cutbacks in the social safety net might thus be surprised to learn that he was also the architect of the most successful Mark A. Sadowskihttps://www.blogger.com/profile/08259309059705236763noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-47174599502799994042013-06-13T19:47:50.892-05:002013-06-13T19:47:50.892-05:00Milton Friedman would never supported have the gov...Milton Friedman would never supported have the government giving money to households in the way that garcia pointed out.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-87522598887458413812013-06-13T19:30:22.167-05:002013-06-13T19:30:22.167-05:00Do you believe in liquidity traps?Do you believe in liquidity traps?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-64142836830268827902013-06-13T19:23:57.532-05:002013-06-13T19:23:57.532-05:00Either way as long it is tied to the NGDP level ta...Either way as long it is tied to the NGDP level target. It shouldn't matter the form it takes if done right. The key is satiating the demand for money.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-68740375412789296352013-06-13T19:16:35.790-05:002013-06-13T19:16:35.790-05:00This is like a aid plan? the government giving mon...This is like a aid plan? the government giving money to households? or tax cuts?Anonymousnoreply@blogger.com