A useless and ignorant statement

Loeffler: I’ll Back $2000 Relief Checks — If Funded By Eliminating Pork

The dingbat will be flooded with earmarks requests if she wins.  I would split the ticket, vote for the other republics and, then pick the other democrat.

George Will hammers Lindsey

Lindsey Graham Finally Wants To Begin A Dialogue About The Debt 

Generations ago, Republicans abandoned their assigned role — which was rarely real — as the party of pain that raised taxes to pay for popular Democratic spending programs. Now, in an era of low interest rates — actually, or almost, negative — the assumption is that deficits do not matter as long as the interest rate for servicing the national debt remains lower than the rate of economic growth, so the ratio of debt to GDP declines. At long last, for humanity, or at least the American portion, the table has been set for a free lunch.

Powell has said he will apply a seigniorage tax as much as needed to keep rates low.  Powell does not have that authority, that is unconstitutional for Powell to acquire the power to tax. It is way too late to do anything else.  

Powell and Yellen know what this means, a New Fed contract. They both know that one or more House members will sue the Fed, or a group of fiat banks will sue the Fed.  And this is a commonly known but commonly denied issue.

Not 100% backed

Thus, a practical CBDC really will likely be limited to a wide array of non-bank financial institutions, who then handle the consumer-facing details, for a small fee. But having stated it that way, we are essentially rediscovering narrow banks: financial institutions that take deposits and 100% back those deposits with reserves at the central bank, and provide high-speed electronic transactions services.

John Cochrane on digital currency.

He posits that we all have Fed S/L accounts, an exchange only takes milliseconds.  But the traders, in this case boys, will still crowd the gate for an external shock.  Having high speed does not solve the congestion problem when traders have the same speed as the Fed. Bots get congested just like humans.

Digital currencies are great but they will be delegated to fiat banks running digital exchanges with a market risk account, a buffer.  Aggregation by economies of scale still rule as no one want's to get bottled up at a single access point and the banks still perform their role in congestion management.  

This is true of all the so called 100% backed theories.  They can all be hit with congestion on an external shock and they all will thus have discounted reserves due to hyperbolic discounting.  That is, under external shock, traders prefer immediate access at a higher congestion fee as they have immediate losses from the shock, it is a disequilibrium. Traders will prefer to aggregate their deposits to an intermediate bank acting as insurance.

Governors get tiny clue

Anger at Congress, Trump mounts among governors

They spoke through their assistants, anonymously. If the governors do not get better clues soon it will be Nixon Shock all over again.

Failed to mention repubs, there Mish

Democrat Hypocrites and Their Insincere Covid Apologies

Like Trump and his team spreading covid all over the country during the election. 

Count the number of sick people we got from repub politicians in denial. And, I might add, mention all the country preachers who spread the stuff to all their parishioners.

Inflation and debt

In this paper we survey the historical record for over two centuries on the connection between expansionary fiscal policy and inflation. As a backdrop, we briefly lay out several theoretical approaches to the effects of fiscal deficits on inflation: the earlier Keynesian and monetarist approaches; and modern approaches incorporating expectations and forward looking behavior: unpleasant monetarist arithmetic and the fiscal theory of the price level. We find that the relationship between fiscal deficits and inflation generally holds in wartime when fiscally stressed governments resorted to the inflation tax. There were two peacetime episodes in the early twentieth century when bond financed fiscal deficits that were unbacked by future taxes seem to have greatly contributed to inflation: France in the 1920s and the recovery from the Great Recession in the 1930s in the U.S. In the post-World War II era a detailed examination of the Great Inflation in the 1960s and 1970s in the U.S. and the U.K. suggests that fiscal influences on monetary policy was a key factor. Finally we contrast the experience of the Great Financial Crisis of 2007-2008, when both expansionary fiscal and monetary policy did not lead to rising inflation, with the re

The bold face is mine. HT Kling, alert Skelton on MMT. 

The bold face says something.  You need income and outgo to balance the budget.  We do not have inflation today because Bernanke inserted the standard setting for seigniorage taxes.

The inflation of the 70s was the result of Congress absolutely refusing to pay for all the spending and Nixon had to default, direct inflation, double spending over night.  Stephanie Skelton has a role here as she has defined a method for constant devaluation and revaluation to keep the balance.

Our problem comes when Powell arbitrarily increases seigniorage as needed, he has no choice.  Eventually Congress sees the problem and refuses to pay for any of the spending.

Spending non existent money

Chicago Public Schools plans to use federal stimulus dollars to close a budget gap and reopen school buildings in early 2021, school chief Janice Jackson said Tuesday.

The school district expects to receive about $800 million from the latest coronavirus relief package, netting an estimated $720 million after it sets aside $80 million for private schools. Jackson said $343 million could be used to close a midyear budget hole, while $375 million will go toward emergency expenses connected to remote learning and reopening this school year and next.

The stimulus package is not yet a done deal. It must be signed by President Donald Trump, who criticized the deal Tuesday.

The CPS must have inside information on Trump's plans. 

Democrats will win

WASHINGTON (Reuters) - Nearly 2.1 million people have cast ballots in a U.S. Senate runoff election in Georgia that will determine whether Democrats control both chambers of Congress and the fate of President-elect Joe Biden’s agenda, according to state data published Thursday.

More than a quarter of the state’s registered voters have either cast ballots early or through the mail, the state’s figures show, a sign that turnout in the pair of Senate races will be high. About 4 million Georgians voted early in the November election, in which Democrat Biden defeated President Donald Trump.

And then the repubs can have all their court cases once more. 

My earmark, my earmark, god save my earmark

'For God's sakes, get out of the way': Trump's former national security adviser urges him to fund the US military

Bolton, the habitual war declarer wants his earmark.

Why should I save his desire to declare wars? How about we declare fewer wars?

Blame the governors

11th-hour COVID-19 relief deal proves again that Congress is unfit to govern

It will take months to decipher this new blizzard of laws, penalties and handouts. We'll be hearing horror stories long after the victory laps end

Earmarking is worse than I thought. Ultimately the weak link is the speaker who needs to run around frantically with her thousand page earmark trade book. Governors need to get a clue otherwise we get the overnight, sudden default shock.

Cuomo in NY gets the dynamics as NYC is the center is government payments. He knows the history, and he knows the governors.  Cuomo and the governors association, until they make a sound statement, we will spiral.

Lindsey will foul this up, put money on that.

Now, Sen. Lindsey Graham (R-S.C.), one of Trump’s most loyal Senate allies, and House Minority Leader Kevin McCarthy (R-Calif.) are trying to salvage the $2.3 trillion package, GOP sources said.

Graham is pushing for a vote on $2,000 stimulus checks, instead of the $600 direct payments in the bipartisan bill, and a sunset of Section 230 in the Communications Decency Act that shields social media platforms like Facebook and Twitter from lawsuits for content posted on their sites. Trump on Wednesday vetoed the National Defense Authorization Act for, among other things, not including a repeal of Section 230.

A Senate GOP aide said it makes sense for Graham to be involved with efforts to save the coronavirus-omnibus measure given the senator’s close relationship with Trump, who has recently soured on other Senate Republicans.