• Trump believes US should default if White House doesn't agree to spending cuts in the CNN townhall
  
• Matt Gaetz says the quit part aloud, it's hostage taking
  
• Republican chairperson Ronna McDaniel says defaulting on the debt would be a boon for Republicans
  
• Hard-line Republicans furious at possible compromise
  

• Republicans raised the debt limit three times during Trump's presidency
  
• They also massively raised the public deficit and debt during the Trump presidency
  
• Democrats never made an issue out of the debt limit when they weren't in the White House
  

• Ignore the limit by declaring it unconstitutional on the basis of The 14th Amendment
  
• Minting platinum coins and issuing them to the Fed
  
• Issuing perpetual bonds
  

• Except when they go up in reaction to something conservatives loath..
  
• They went up during most of Obama's presidency as well, how could that be, wasn't he bringing socialism to the US?
  

Quote:The Fox News host Laura Ingraham last week asked House Minority Leader Kevin McCarthy about an idea that has gained some steam on the right, as conservatives have vented at large tech companies they accuse of bias. Ingraham told McCarthy, a California Republican leading the charge against Silicon Valley, that "there is another interesting idea beyond antitrust." "Consider Facebook and Twitter and so forth like a public utility, and thus they could be regulated like a public utility," she said. The point, she said, is that the companies like Facebook are "the town square." "And even though it is a private company, it dominates speech, dominates advertising ... so we have to treat a different way," she said. In response, McCarthy said he thought "Congress is going to look at everything from the perspective of how powerful they have become."

• Despite big tax cuts, there was no boom in capital expenditure by business, bar from an initial flurry when the economy recovered from a deep recession and interest rates came down from 15%+.
  
• Economic growth in the 1980s wasn't actually faster than in the 1970s.
  
• The tax cuts didn't pay for themselves, a substantial budget deficit emerged.
  
• Wages and productivity started to part ways in earnest.
  
• Inequality shot up, and more and more of the economic spoils went to the top earners.
  
• In 1980s, the US had a healthcare system that was in line with the rest of the developed world but a sharp divergence in cost and a much slower advance in US life expectancy opened up in the 1980s.
  

• Andy Kiersz
  

Quote:Fox News and much of the conservative media slipped into messiah mode coverage this week when news broke that Carrier, the air conditioner giant, has decided to not move approximately 1,000 manufacturing jobs from Indiana to Mexico as the company had previously planned. President-elect Donald Trump took credit for having negotiated the respite.

Cheering Trump’s hands-on approach and his commitment to the working class, Fox talkers portrayed the Republican’s maneuver in relentlessly glowing terms. “A Big Win For Donald Trump,” announced Bill O’Reilly’s show last night.

Fox’s Stuart Varney claimed Trump had played hardball with Carrier and won: “He strong-armed them. What’s wrong with that?” (According to reports, it was likely the lure of additional tax incentives that convinced Carrier to keep the jobs in Indiana, not being “strong-armed” by Trump.) Trump’s cheerleader-in-chief Sean Hannity was just gobsmacked by the whole thing, saying on his radio program that he "can't think of a time in my lifetime where a president-elect or a president ever" did this. 

Hannity loved the fact that Trump reached out to corporate America, which is fascinating because you know what Hannity didn’t love in 2009? He didn’t love when newly elected President Obama reached out to Detroit’s auto industry in the form of an $80 billion-dollar bailout. Back then, an unhinged Hannity called Obama every name in the book as conservative pundits accused the president of trying to destroy democracy and capitalism.

Fox News and the entire right-wing noise machine relentlessly denounced Obama as he tried to rescue American manufacturing jobs, which the federal bailout eventually did. One independent study estimated the aggressive government move saved 1.5 million jobs. “This peacetime intervention in the private sector by the U.S. government will be viewed as one of the most successful interventions in U.S. economic history," the study’s author wrote.

Lots of people might forget, especially in light of the bailout’s stunning success, but Obama’s push to help the Detroit industry once served as a defining line of GOP attack. The bailout symbolized the dangers of Obama's alleged socialist/gangster leanings. This, despite the fact it was actually President George W. Bush who unveiled the first phase of the bailout plan during the final weeks of his presidency, in order to "avoid a collapse of the U.S. auto industry."

Nonetheless, the topic soon became a cornerstone of the Tea Party and its overheated attacks on Obama, amplified by Fox News.
Remember how Varney this week toasted Trump for having “strong-armed” Carrier? Back in 2009, the host was furious that Obama was allegedly trying strong arm the public into buying American cars: “[N]ow you're in the position where the government somehow has to coerce or force us all into buying the small cars that it insists Detroit puts out." (Varney routinely whined that Obama was a “bully” to business.) 

Meanwhile, Glenn Beck, then with Fox News, claimed the bailout reminded him of "the early days of Adolf Hitler." Fox favorite Michelle Malkin compared the auto deal to a "crap sandwich," and a "lemon" the U.S. taxpayers would be stuck with "for life."

Hannity himself berated Obama for engaging in what he called a "mission to hijack capitalism." And in the infamous words of Rush Limbaugh, it was as if General Motors and Chrysler "bent over and grabbed the ankles." (Limbaugh loves Trump’s Carrier deal, by the way.)

Quote:For the time being, however, infrastructure spending has become a rallying cry. In his acceptance speech Wednesday morning, Trump again pledged to make such spending a top priority. “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” Trump said. “We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.” Marcia Hale, president of Building America’s Future, a group representing a variety of city and state officials and former officials, called on Trump to make an infrastructure plan part of his first 100 days in office. 

Plans to boost government infrastructure spending have been on the table for years. In his fiscal year 2016 budget proposal, for example, President Obama asked Congress to support a $478 billon, six-year public-works plan for roads, railroads and ports. He tried to bundle that with business tax reform. Funding for the infrastructure plan would have been offset with the windfall from a temporary tax adjustment that would have encouraged corporations to bring back profits parked overseas. But Republicans in Congress, who said they were concerned about the federal deficit, blocked Obama’s proposals. Those lawmakers could prove an obstacle for Trump, too. Senate Majority Leader Mitch McConnell (R-Ky.) favors linking infrastructure plans to comprehensive tax reform. Meanwhile, leading economists have made the case for more infrastructure spending.

Quote:Hillary Clinton often gets described as an incrementalist, with a relatively modest agenda. This makes sense, given that she spent the past two years or so running against a literal democratic socialist and Donald Trump.


But this depiction misleads more than it informs. Amid her blizzard of plans and white papers, the scope and ambition of Clinton’s program often gets missed. Just imagine, for a second, what a world in which it all became law would look like.

The vast majority of families would be able to send children to public colleges and universities tuition-free. Four-year-olds would have universal access to pre-K, and child care would be massively subsidized so as to cap costs at 10 percent of a family’s income. All workers would get 12 weeks paid family leave and 12 weeks paid medical leave, in case they need to care for a new child, a sick family member, or themselves. The child tax credit would be doubled for families with young children and made available to poor families with little earnings.

Eleven million undocumented immigrants would gain a pathway to citizenship. Medicare would be expanded to people as young as 55, and allowed to negotiate down drug prices with pharmaceutical companies, and every state would have a robust public option. All states would expand Medicaid coverage to anyone living underneath the poverty line, and subsidies for health care on the exchanges would be more generous. The government would cover out-of-pocket health costs through the tax code. Federal money would be able to pay for abortions for people with government-paid insurance. Social Security benefits would increase. The minimum wage would be at least $12, maybe $15 an hour, and firms could unionize through card check rather than having to go through elections.

There would be an injection of $500 billion — $275 billion of which comes from federal coffers — into rebuilding roads, highways, mass transit, airports, seaports, broadband networks, electrical grids, water pipes, and other forms of infrastructure. This would be the largest public works push from the federal government since the building of the interstate highway system in the 1950s. Much of that money would go to directly hiring workers, particularly youth in minority communities. The Clinton campaign estimates that the $500 billion would create about 6.5 million jobs, more than half of which come from public money.

And to pay for it all, the rich would face a top income tax rate of 43.6 percent and a top estate tax rate of 65 percent, each of which is the highest since Ronald Reagan. Investors would face a new tax on financial transactions.

Put together, this is not quite a plan for full social democracy, like the one Bernie Sanders cobbled together to mixed results in the primaries. But, to borrow a Silicon Valley term, it’s a plan for a minimal viable product of social democracy. It extends the promise of the American safety net from cradle to grave, covering major gaps that currently exist here and not abroad for the first time in American history.

“I think a lot of Clinton’s proposals are very much a step in the direction of a Nordic-style or social democratic welfare state,” Lane Kenworthy, a sociologist at the University of Arizona and author of Social Democratic America, says.

The result would leave the United States’ safety net far less generous than that of, say, Sweden. Hospitals aren’t nationalized. Parental leave is 12 weeks, not 480 days per couple. There isn’t a child allowance paid to all families, no strings attached.

Quote:The discredited old model focused only on using "nudges," especially in the form of tax credits, to encourage private market actors to carry out social goals. The idea was to keep government nimble. As Gov. Mario Cuomo summarized this position in the 1980s: "It is not government's obligation to provide services, but to see that they're provided."

Once again, this approach has hit a wall. Take, as just one example, the tax deduction that encourages people to invest in 401(k)s and other private retirement savings. Tax deductions are most beneficial to those with the highest tax burden, and nearly two-thirds of this value goes to the top 20 percent of earners.

It’s not even clear that the deduction encourages people to save. Studying a similar program in Denmark, the economist Raj Chetty and others found that such programs only encourage rich people to shift the way they save to pay less in taxes without actually saving any more, and have virtually no impact on poorer savers. In embracing 401(k)s over other kinds of retirement policies, we’ve ended up with a regressive policy that doesn’t even accomplish what it sets out to do.

Quote:According to a recent report by the Century Foundation, a nonpartisan think tank, offering families an annual benefit of $4,000 for every kid would reduce child poverty in the United States by more than half.

A universal child allowance would fix what’s broken in our current system. Right now, families qualify for a federal child tax credit only if they make more than $3,000 per year. That leaves out the poorest of the poor—disproportionately hurting black kids and the children of single mothers. (The number of children who live on $2 a day or less has more than doubled, to three million, since Bill Clinton signed welfare reform into law.) What’s more, the child tax credit arrives just once a year, at tax time. A universal child allowance, by contrast, would provide cash on a regular basis—allowing parents to use it for daily expenditures such as groceries and child care.

Quote:On the economic front, the U.S. is headed toward stagflation -- a combination of weak demand and elevated inflation, according to Greenspan. “Politically, I haven’t a clue how this comes out.” “We’re not in a stable equilibrium,” he said. “I hope we can all find a way out because this is too great a country to be undermined, by how should I say it, crazies.”

Quote:Greenspan repeated his concern on Tuesday that increased government spending on social security and healthcare are crowding out private investment and leading to slower economic growth. He bemoaned the fact that neither presidential candidate was talking about reining in those expenditures.

• The economy is not operating at full capacity.
  
• Interest rates are extraordinarily low, not high and/or rising as they would be if both the public and private sector would be competing for the same credit, which then could lead to private sector credit demand being crowded out through higher interest rates.
  
• We don't really see a rise in inflation either, which we would see if public and private sector demand would exceed available resources..
  

• As economies get richer, they get more complex increasing the need for regulation
  
• It mostly consists of services which are less amenable to productivity increases ('Baumol's disease')
  
• As economies get richer preferences shift towards more immaterial things like health, safety and education, the public sector plays a larger role here.
  

Quote:Teachers are given the power to educate children from the ages of 3 to 18, to help kids grow socially, and to shape students’ perceptions of the world. Despite this level of responsibility, teachers aren’t treated with the same prestige as doctors, lawyers, or professional athletes. At the same time, teachers are being asked to do more. They play critical roles in the ongoing implementation of Common Core standards and the effort to better serve a growing population of English language learners, for example. 

And in many states, they’re doing all of this with a stagnant, if not shrinking, education budget. “The hypocrisy is that you are trusting me with all of these things during my day job, but you are not trusting me to have the voice to shape my day job,” Mary Cathryn Ricker, the executive vice president of the American Federation of Teachers, said at event last week aimed at figuring out how to elevate the teaching profession...  One of most glaring challenges to attracting people to the teaching profession is the low pay that teachers receive. Teacher salaries are 40 percent lower (at $36,141) than other professions that require college degrees, according to the 2011 Organisation for Economic Co-operation and Development paper, “Building a High Quality Teaching Profession.”

Quote:

• Americans now pay more for pharmaceuticals than the citizens of any other advanced nation because Big Pharma is setting the rules – extending the life of drug patents, prohibiting Medicare from using its bargaining power to get lower drug prices, and blocking consumers from buying cheaper drugs from Canada.
  
• We pay more for Internet service, health insurance, airline tickets, and banking services because the increasing market power of key players in these industries lets them raise prices. Antitrust enforcement has been systematically weakened.
  
• The biggest Wall Street banks continue to reap the financial benefits of being too big to fail. 
  
• Hedge-fund partners make bundles from confidential information, trading on which used to be illegal.
  
• CEOs cash in their stock options and grants just when they pump up the value of their company’s stocks with buybacks. It’s allowed because laws and regulations have been loosened.
  
• Trade agreements are now designed to protect the intellectual property and foreign assets of giant corporations, but nothing is done to protect the incomes of Americans who lose their jobs to foreign competition.
  

This is business as usual in Washington. 

• Markets don't work well in monopolies or when suppliers collude
  
• Markets don't work well for public goods (goods whose consumption is non-rival and non-excludable)
  
• Markets don't work well for information and knowledge
  
• Markets can create external effects, costs falling on society at large (like pollution) or benefits  cannot be sufficiently internalized by market parties (for instance of general research, education)
  
• Markets can become unstable, especially financial markets
  
• Markets don't always clear on the macro level, hence recessions and even depressions, and can stay there for long periods of time
  
• Markets rapid change they produce creates winners and losers
  
• Markets can lead to the exploitation of information asymmetries. The more complex economies get, the more difficult it gets for buyers to assess claims of sellers products and services, and these information asymmetries can be exploited (see below how this complicates numerous markets)
  

Quote:A researcher who specializes in the Freedom of Information Act (FOIA) is suing the Justice Department for using really, really old computers to fulfil requests for information. Ryan Shapiro says that the use of "decades old" computers constitutes "failure by design", and that it refuses to use a far more capable $425 million system that could speed up the process, The Guardian reports. Under FOIA rules, requests have to be handled in a timely manner and the DOJ must make "reasonable efforts" to actually find the information, rather than just say they've looked for it and couldn't find it, which Shapiro says has been an all-too frequent occurrence.