Home > Main > “It is, instead, a grotesque abdication of responsibility.”

“It is, instead, a grotesque abdication of responsibility.”

May 30, 2011

There are 44 Million People on Food Stamps in the Richest Country in Human History

Paul Krugman hits another one out of the park today.  Talking about the number of people that are unemployed, he says this:

“So someone needs to say the obvious: inventing reasons not to put the unemployed back to work is neither wise nor responsible. It is, instead, a grotesque abdication of responsibility.”

It’s true.  It’s a tragedy of vast proportions that we allow this much unemployment.  I shudder at the number of families that are being broken up now – today, as I write this – due to the mom and dad fighting about money.

It’s actually even worse than Mr. Krugman thinks.  The mainstream economics profession makes a huge mistake when it assumes the no-Ponzi assumption is knowable. The no Ponzi assumption is the beating heart of the Government Budget Constraint, and the government budget constraint is the reason bond vigilantes are rumored to exist, and the reason James Carville wants to come back as the bond market.

But mostly, the Government Budget Constraint is why we allow force tens of millions of people to live lives of worry and misery rather than as productive adults.   And the Government Budget Constraint is wrong.  It’s frackin’ wrong.

This is not  just some academic argument – this bullshit assumption makes hundreds of millions – even billions –  of people far more miserable than they need to be.  People are suffering because the economic profession assumes something to be true which is worse than false.

With the no-Ponzi assumption in place, there is and must always be a tradeoff between inflation and putting people to work.  And the no Ponzi is wrong.  It’s frackin’ wrong.

We can put people to work without worrying about inflation.  This is truly a “grotesque abdication of responsibility.”

[Update:  Tom Hickey points out that Greece is likely to give up sovereignty to appease creditors.  Let’s hope we are witnessing the “blow-off top” of this horrible non-idea.]

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  1. Tom Hickey
    May 30, 2011 at 9:17 am

    It gets worse, much worse:

    Econintersect:  How much will a financial bailout cost Greece?  How about its independence as a nation?  TheFinancial Times reports (article by Peter Spiegel, Quentin Peel and Ralph Atkins) that European leaders are negotiating a deal that would lead to unprecedented outside intervention in the Greek economy, including international involvement in tax collection and privatisation of state assets, in exchange for new bail-out loans for Athens.  This solution is that austerity could be imposed from outside by the EU.  Greece would, temporarily, not have its own government.

    Greece May Suffer Temporary Loses of Sovereignty

  2. TC
    May 30, 2011 at 9:40 am

    This is absolutely horrible. While I support better tax collection within the Greek state, enforcing this from the outside is awful close to Colonialism. The picture of ruins is placed without a comment – but they must be selling some of these to private individuals.

    And all of this is in homage to an idea that isn’t even wrong.

    If you’ve ever read Iain Banks, the Government Budget Constraint is:

    “a kind of self-perpetuating, never-ending holocaust of pain and fear”

  3. gf
    May 30, 2011 at 3:50 pm

    “Greece May Suffer Temporary Loses of Sovereignty”

    I wonder if this title is some kind of bizarre news speak, it sounds anything but temporary.

  4. Clonal Antibody
    June 1, 2011 at 1:27 am

    See also David Korten’s 10 Common Sense Principles for a New Economy

    1. The proper purpose of an economy is to secure just, sustainable, and joyful livelihoods for all.
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    5. A proper money system roots the power to create and allocate money in people and communities in order to facilitate the creation of livelihoods and ecologically balanced community wealth

    6. Money, which is easily created with a simple accounting entry, should never be the deciding constraint in making public resource allocation decisions.

    7. Speculation, the inflation of financial bubbles, risk externalization, the extraction of usury, and the use of creative accounting to create money from nothing, unrelated to the creation of anything of real value, serve no valid social purpose.
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