by On Warren Mosler's website his economic views have been bearish for something like the last four years. I cannot understand this.Not only was the deficit (something he talks about all the time) last year the highest in 6 years (both nominally and as a percent of GDP), but this year it will be even higher. In fact, it's already three-fourth's of last year's total and we're not even halfway through the fiscal year. Shouldn't he be bullish?Moreover, government spending is going to break another record. Government spending is the "flow" in the "stock/flow" discussion (whereas the deficit is the stock) and it's what drives income, profits and overall economic activity. You don't even know what the deficit is going to be until the government spends first. (He even says, "gov't spends first then
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Mike Norman considers the following as important: bearish on economy, bearish on stocks, MMT, Warren Mosler
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Not only was the deficit (something he talks about all the time) last year the highest in 6 years (both nominally and as a percent of GDP), but this year it will be even higher. In fact, it's already three-fourth's of last year's total and we're not even halfway through the fiscal year. Shouldn't he be bullish?
Moreover, government spending is going to break another record. Government spending is the "flow" in the "stock/flow" discussion (whereas the deficit is the stock) and it's what drives income, profits and overall economic activity. You don't even know what the deficit is going to be until the government spends first. (He even says, "gov't spends first then taxes later." So why not look at flows?)
Finally, when he talks about Fed rate hikes he says they "add to income via the interest channel," which is true. Meanwhile the Fed has been raising rates for the past 3+ years and he's still bearish?
Frankly I don't understand his constant bearishness. It's very odd. It's like he ignores his very own MMT concepts when looking at the economy. Every post on his website is about how this or that metric is slowing and those posts have been going on for years, yet gov't spending continues to rise, the economy continues to expand and the stock market continues to make new highs.
Really, I find it very strange.