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How worried should Americans be about public debt? My debate with Todd G. Buchholz on pairagraph.com

Published by Anonymous (not verified) on Sat, 24/10/2020 - 5:25pm in

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Debate, English

How worried should Americans (indeed the rest of the world too) be about public debt. In this running exchange Todd G. Buchholz, White House director of economic policy for President George H.W. Bush, financier and author, and Yanis Varoufakis, academic economist, parliamentarian and author, answer the question. Invited to do so by debate forum pairagraph.com, Todd kicked off the debate with this piece (see also below) and Yanis responded thus (also copied below).
TODD G. BUCHHOLZ’s Opening Salvo 

I wish I could believe that the tooth fairy really flies from pillow to pillow, that Elvis still lives, and that government debt doesn’t matter. Some people manage to believe in all three, and I’m sure they sleep better at night. I’m also sure that whenever confronted with absurdities, they can concoct all sorts of theories that seem plausible after a few drinks or puffs of suspect vegetation.

But to the rest of us, the U.S. and many of its G7 cohort look not just ill but veering towards broke. To offset the COVID-induced Great Cessation, the Federal Reserve and Congress have pumped in staggering sums of stimulus, fearing that the economy would otherwise sink like a dense dumpling in a bucket of broth at a 1930s soup kitchen. The 2020 budget deficit will hit about 16 percent of GDP, and the ratio of debt to GDP is hurdling over the 100 percent mark, numbers not seen since Franklin Roosevelt was photographed with a cigarette holder jauntily protruding from his patrician lips.

Assuming we eventually defeat COVID and do not devolve into a dystopic Terminator scene, can we avoid the fiscal cliff? Some people think we should not care about such things and that governments can keep borrowing without limit, as long as the central bank prints money. Such debt apologists are not necessarily original thinkers. They have many forerunners, some of them buried in the rubble of ancient Greece, where 4th century BC municipalities defaulted on debts to the Temple of Delos.

Want a more recent example? Take a flight to broken Venezuela, where debt is twice the GDP level and inflation should be displayed using scientific notation. In the 1960s and 70s, UK officials listened to such advice and recklessly borrowed. The country suffered raging inflation and a sinking currency. It was called the “sick man of Europe” (a phrase first applied by Czar Nicholas I to the crumbling Ottomans). In 1976, in an extraordinary conversion, Labour Prime Minister James Callaghan begged the IMF for a bailout, performed a fiscal about-face and declared to debt apologists, “I tell you in all candour that that option no longer exists.”

The age-old refrain from debt apologists is, “we owe the money to ourselves.” Two replies come to mind. First, we don’t just owe money to ourselves. About one-third of U.S. debt is in the hands of foreigners, including a trillion dollars to the Chinese. Second, even if we look solely at debt held by Americans, we should ask, “Who is we?” The lenders who in good faith bought U.S. Treasuries are not the same individuals who would benefit from tearing up the bonds or stomping their value down to nothing through inflation. This is a fallacy of composition.

A debt is a claim on the future. If you think it is imaginary, ask Elvis to sing Jailhouse Rock when he stops by your place tonight.

YANIS VAROUFAKIS’s Reply

It takes great foolishness to be relaxed about mounting debt. But, then again, smart persons recognise that debt is to capitalism that which hell is to Christianity: Grossly unpleasant but absolutely essential, since without it the system (economic system or Christian belief system) does not work. So, yes, worrying about hell is part and parcel of being devout just as losing sleep over debt is the sensible thing to do under capitalism, especially during a crisis as great as the present one.

But, I am told by believers, freaking out about hell is not the best way to avoid ending up there. Hell, like debt, is a mere symptom of doing the wrong thing. And the wrong thing to do in a great depression, of the sort we are experiencing now, is exactly what Todd Buchholz is doing now: To freak out about public debt, carefully avoiding a single word regarding the private debt menace looming as families and companies face bankruptcy.

Too smart to put it in his own words, Todd whips up fear of public debt hoping that his readers will reach, all by themselves, the ‘obvious’ conclusion that it is time for austerian public spending cuts for the purpose of reining in the budget deficit.

It is not hard to mislead the public into this conclusion. When the going gets tough in our private lives, with our incomes tanking, you and I have a duty to tighten our belts and to say no to new loans. However, private finances are a terrible basis for thinking about public finance.

You and I are blessed with a wonderful independence between our expenses and our income. When, in response to being in the red, we cut down on our expenses, our budget goes back into the black because our income is independent of what we spend. Tragically, the Treasury is not blessed with this splendid independence between its tax revenues and public expenditure.

Suppose Todd succeeded in pushing everyone into an austerian mindset yielding budget cuts. At a time of falling private expenses (both on consumption and, more ominously, on investment), a subsequent reduction in public spending will mean that the sum of private and public expenditure will fall even faster. But what is this sum? National income! Thus, GDP falls faster when states cut spending in a middle of a slump – a catastrophe for families and companies.

So, by all means let’s worry about debt. But let us first understand that, in a recession, debt will drown us if, like Todd, we focus exclusively on public debt. Put differently, the more government tries to balance its books now, the harder it will be for persons and firms to balance theirs and, as a result, total debt will rise faster as total incomes fall further.

For this reason, a special place in hell (and possibly debtor’s prison!) is reserved for those who whip up fear of public debt in order to lure good, unsuspecting people into the fallacy of austerity.

TO BE CONTINUED…

Owen Jones & Yanis Varoufakis to discuss Labour’s 2019 electoral defeat in the context of Owen’s recent book – 7 NOV 2020

Published by Anonymous (not verified) on Mon, 19/10/2020 - 3:13am in

The global crisis of COVID-19 presents an opportunity for a radical rethink of Britain as we know it. Join two icons of the Left as they imagine a future for progressive politics.

Whether exposing Britain’s powerful elites in The Establishment or defending the white working class in Chavs, fighting for equality and social justice as a Guardian columnist and broadcaster, Owen Jones may be the most influential and widely respected political journalist of his generation.

In this livestream In Conversation event with world-renowned economist and former Greek finance minister Yanis Varoufakis, he’ll give an unflinchingly honest, insider’s account of Labour’s electoral defeat last year – and explore where the Left can go next in the new world we find ourselves in. We have the opportunity to build a fairer country and a more equal world, but if our time is to come, then we must learn from our past.

Owen says, “if there’s anything I’ve learned from my family’s decades of political commitment, it’s that history is not linear, a tale of victories followed by successes and yet more victories; but often defeats, setbacks, followed by victories, then more defeats and setbacks. Finally, you might get somewhere approximating to where you’re going to. It’s called a struggle for a reason.”

This event takes place at 6:30pm GMT and includes access to a replay video available 48 hours after the event to enjoy with no time limit.

John Bolton vs Yanis Varoufakis on “Is Global Stability A Pipe Dream?” – The 2020 Holberg Debate, 5 DEC 2020

Published by Anonymous (not verified) on Mon, 19/10/2020 - 3:07am in

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Debate, English, Video

At the 2020 Holberg Debate, Amb. John Bolton and Yanis Varoufakis, Member of the Hellenic Parliament, will discuss current threats to regional and global stability. The debate will be a virtual event. Anyone can  watch the livestream here.  Tweet your questions before or during the event with hashtag #Holberg2020.

JOHN BOLTON is an American attorney, diplomat, Republican consultant and political commentator who served as the 25th United States Ambassador to the United Nations from 2005 to 2006 and as the 27th United States National Security Advisor from 2018 to 2019. He has also served in various positions in the US Administration under Presidents George W. Bush, George H. W. Bush and Ronald Reagan. Amb. Bolton is the author of three books: “Surrender Is Not an Option: Defending America at the United Nations and Abroad” (2007); “How Barack Obama Is Endangering Our National Sovereignty” (2010); and “The Room Where It Happened: A White House Memoir” (2020), where he describes his time as National Security Advisor for U.S. President Donald Trump from April 2018 to September 2019.

YANIS VAROUFAKIS is a member of Greece’s Parliament and parliamentary leader of MeRA25, the Greek political party belonging to DiEM25 – Europe’s first transnational pan-European movement. Previously he served as Greece’s Finance Minister during the first six months of 2015, as a member of Syriza, and he led negotiations with Greece’s creditors during the government-debt crisis. Varoufakis has taught economics at the universities of East Anglia, Cambridge, Sydney, Glasgow, Texas and Athens where he still holds a Chair in Political Economy and Economic Theory. He also holds several honorary professorships. He is the author of a number of best-selling books, including “Adults in the Room: My Battle With Europe’s Deep Establishment” (2017); “Talking to My Daughter About the Economy: A Brief History of Capitalism” (2017), and “And the Weak Suffer What They Must? Europe, Austerity and the Threat to Global Stability” (2016). His latest book is “Another Now: Dispatches from an Alternative Present” (2020).

MODERATOR: SCOTT GATE is an American political scientist and economist based in Norway. He is currently Professor of Political Science at the University of Oslo (UiO), as well as Guest Researcher at UiO’s Department of Economics. Gates is also Research Professor at Peace Research Institute Oslo (PRIO), and he is Editor of the Journal of Peace Research, and of the International Area Studies Review. From 2002 to 2013, Gates was director of PRIO’s Centre for the Study of Civil War. Gates has previously worked at the Norwegian University of Science and Technology (NTNU) and Michigan State University (MSU).

Saturday, 5 December 2020 from 16:00 UTC+02-18:30 UTC+02, Hosted by Holberg Prize

Debating wealth redistribution with Bob Reich vs Larry Summers & Allison Schrager – Bloomberg & intelligence2

Published by Anonymous (not verified) on Mon, 12/10/2020 - 5:32pm in

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Debate, English, TV

Watch the closing arguments in Bloomberg’s debate where Bob Reich and I supported the motion ‘It’s time to redistribute the wealth’ against Larry Summers and Allison Schrager who argued against.

One for the Records

Published by Anonymous (not verified) on Mon, 05/10/2020 - 2:33am in

Today seems like a day for which we need a record.The president remains at Walter Reed Hospital. His condition is unclear. The United States as a whole on Friday saw the highest count of new cases since August: 54,411. Deaths are down, but still 906 Americans died on Friday from Covid-19. Continue reading

The post One for the Records appeared first on BillMoyers.com.

The Debate Heard Round the World

Published by Anonymous (not verified) on Fri, 02/10/2020 - 12:41am in

Today, it feels like Trump’s embrace of white supremacist gangs and his open declaration that he is planning an assault on our democratic process was a turning point for the campaign, and for the nation. Continue reading

The post The Debate Heard Round the World appeared first on BillMoyers.com.

ScoMo Tells Engadine Maccas Cleaners To Stand Down And Stand By

Published by Anonymous (not verified) on Thu, 01/10/2020 - 8:11am in

Australian Prime Minister Scotty from marketing has told the cleaners of Engadine Maccas to stand down and stand by, as this year’s NRL finals featuring the PM’s beloved Cronulla Sharks kick off this week.

”To the cleaners at not just Engadine maccas but all maccas, I say, stand back and stand by,” said the Prime Minister. ”It’s going to be a grueling finals season, so we need you there, ready and raring to go.”

”I’d be there myself but as you know, I don’t hold a mop and bucket.”

When asked why he was seemingly taking verbiage from President Trump, Scotty from marketing said: ”Fake news. I reject the premise of your question.”

”To my knowledge, Donald or The Donald as I call him has never even been to Engadine Maccas. I have invited him to join me there one day but no plans have been finalised.”

”Now, if you’ll excuse me, I’m off to get ready for the big game, go the sharts!”

Mark Williamson

@MWChatShow

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Joe Biden Faces Down the Fascist Donald Trump

Published by Anonymous (not verified) on Thu, 01/10/2020 - 8:06am in

Photo credit: chrisdorney / Shutterstock.com CNN’s Jake Tapper is a highly conventional and thus highly respected news anchor. The Daily...

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“That was a hot mess, inside a dumpster fire, inside a train wreck”

Published by Anonymous (not verified) on Thu, 01/10/2020 - 1:59am in

The first presidential debate of 2020 was unlike anything we have seen before. CNN’s Jake Tapper said: "That was a hot mess, inside a dumpster fire, inside a train wreck." "He was his own tweets come to life." Continue reading

The post “That was a hot mess, inside a dumpster fire, inside a train wreck” appeared first on BillMoyers.com.

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