The debates between the deficit doves and the deficit owls continued at New Deal 2.0 (ND20) today. Jeff Madrick, a dove, gives us a post entitled: “Stimulate Now: On Inflation and Deficits.” In this post, I’ll evaluate Jeff’s views paragraph by paragraph.

Jeff says:

New Deal 2.0 (ND20) is, well, more New Dealish than other web sites, so instead of the usual conflict between deficit hawks and deficit doves, we might see at, say, the New York Times. Here things are shifted to the left, and we see a debate between the deficit doves and the deficit owls. The doves and owls have posted there for awhile without really engaging one another. But recently, the appointment of Jack Lew as OMB Director and the Statement/petition by Sir Harold Evans called “Stimulus Now,” has ended an uneasy truce between these groups. Paul Davidson, Sir Robert Skidelsky, and Jamie Galbraith replied to the Evans petition with a refusal to sign it and an explanation of the deficit owl position. At about the same time, there was an exchange at Paul Krugman’s blog between deficit doves sharing Paul’s position on the deficit and deficit owls, who don’t agree with the deficit dove prescription of short-term deficits until we get a strong recovery and then a “pivot” to deficit reduction eventually resulting in a surplus when times get really good. The deficit owl prescription is to increase Government spending on programs directed toward the public purpose, until all excess productive capacity in the US economy is used, and then cut back on less valuable spending, or raise taxes as necessary to avoid inflation. Deficit owls also believe that there is no need to worry about deficits as long as Government spending hasn’t helped to created enough aggregate demand to use excess productive capacity, and that thereafter, aggregate demand needs to be cut either by reducing spending, raising taxes or both, not in order to reach some arbitrary deficit or surplus number, but rather to achieve the specific goal of avoiding inflation. Now, at ND20, blog posts have begun to appear where deficit doves and owls have been exchanging points of view.

Paul Krugman, well-known for his opposition to the austerity concerns of the deficit terrorists and his advocacy of additional Government stimulus to lower unemployment and end the recession, just ignited a paradigm conflict which promises to clarify for many, the issues dividing “deficit doves” like Paul, from economists who take a Modern Monetary Theory (MMT) approach to economics, which holds, among other things, that Government deficits and surpluses are not, in themselves important, and that Government spending has to be evaluated relative to its impact on public purposes. Paul said:

I just got back from the Fiscal Sustainability Teach-In organized by letsgetitdone, selise and others who regularly post and comment here at The Seminal.

The event is a bottom-up grassroots response to Pete Peterson and the President’s “catfood commission” – which is already talking about putting things like Medicaid and Social Security on the chopping block in the name of reducing the deficit. If you were able to attend the teach-in, or if you follow the noted economists and presenters who appeared there, you might know that things like full employment are much more important than national deficits, and that the U.S.’s fiscal policy on things like Social Security isn’t nearly as much of a cause for alarm as the right-wing “deficit hawks” might have you believe.

All of the signs are pointing to the imminent collapse of the US dollar. The FED’s willingness to print unlimited quantities of them to create the appearance of stability will lead to hyperinflation.

The one day (attempted) auction of a mansion in Vero Beach reveals a failure to admit stupid real estate “investment” mistakes, accept losses, and move forward.

What does the future hold for dollar denominated Americans? The US Dollar is just topping out right now as the foreign flight to the best of bad fiat currencies comes to a conclusion. Next up, the collapse of the US Dollar and the flight to gold, silver, rice, beans, wine and ammo.

The US risks being hit by Zimbabwe-style hyperinflation and there are signs that the world’s biggest economy risks turning into a banana republic