“An Explanation of Modern Monetary Theory”

A Tuesday Wall Street Journal Letters to the Editor writer offered one.

[I]nflation is the only reason to limit budget deficits. The national debt is never a valid reason in countries with their own currencies; they can always make payments as they come due and can never be forced to default.

In particular,

The debt can always be paid by creating money.

Here are a couple more thoughts on the matter.

“Credible Military Capabilities”

The European Union needs some, says Ursula von der Leyen, European Commission President.

In order to respond to crises, the EU needs “credible military capabilities,” the leader of the EU Commission Ursula von der Leyen said at the World Economic Forum in Davos on Wednesday.
The bloc has already “set up the building blocks of a European defense union,” the former German defense minister said in her speech.
“It is complementary to NATO and it is different,” she added. “There is a European way to foreign policy and foreign security policy where hard power is an important tool […] but it is never the only one.”

Trade Dispute

Deutsche Welle is worried about President Donald Trump reignit[ing a] trade battle with Europe.

US President Donald Trump vowed on Wednesday to make good on threats to impose high tariffs on European cars if the bloc doesn’t agree to a long-delayed trade deal with Washington.

The US leader said that the tariffs, which would Germany’s car industry especially hard, could amount to 25%.

Tariffs and Fairness

In a Wall Street Journal article centered on the way tariffs involved in the People’s Republic of China/US trade “dispute” and the simmering EU/US trade dispute impact a Scottish town, Alistair MacDonald posed a question.

Is it fair for the US, in its pursuit of trade concessions, to hurt smaller businesses that make iconic products in nations such as Scotland?

The question is a non sequitur.  The correction is, “Is it fair to single out particular subgroups for special treatment when addressing the rest of the group or the group as a whole?”

No, of course not.

Losing our Free Market?

And not just through Progressive-Democrats’ Big Government demands and planned impositions.  Now it’s fund MFWICs with bugs up their noses about their currently favored special interest, exemplified by BlackRock’s Larry Fink.

BlackRock, along with Vanguard and State Street, are the three most powerful investment funds, holding as they do roughly 20% of the S&P 500 through funds they run for investors.  And now Fink is starting to dictate to the companies his company owns shares in what they must do vis-à-vis climate change, Fink’s issue du jour.

Mr Fink is surely right that investors should worry about climate risks leading to big shifts of capital, and therefore big price moves.

Medicaid Block Grants

The Trump administration is planning to set up procedures for allowing States to convert the Medicaid funding they receive from the Federal government from matching funds to block grants.

The new procedures would represent a large change.

Medicaid funding is open-ended, meaning the federal government matches state spending. If that funding is converted to a block grant, a state could get a limited, lump sum of federal money instead.

There are two key differences here. One is that the funding would go from strings-attached matches to no-strings block grants. The other is that the decision to go to block grants would be each requesting State’s, resulting in less Federal control over that State’s internal affairs.

A Telephone Merger

The Wall Street Journal wrote about roadblocks in the form of nine Progressive-Democrat-run States’ lawsuit against a T-Mobile-Sprint merger.  In commenting on the article, a fellow reader wrote in part,

What about the customers?

His concern was centered on quality of service that would—might—flow from the merged company as well as the number of alternatives from which to purchase cell phone service.

Customers are an important factor, but businesses are obligated to make money for their owners, Progressive-Democrats’ virtue-signaling notwithstanding.

The importance of the customers will be exercised by their staying with the merged company or moving on if the post-merger business isn’t better.

Fiscal Management

In Tuesday’s Progressive-Democratic Party primary debate, Joe Biden made the claim that he couldn’t afford child care in 1972 on his then-income of $42,000/year.

Jan Brewer, ex-governor of Arizona, had a thought on that via Twitter:

“Jan Brewer @GovBrewer · 12h
“Biden just said he couldn’t afford child care in 1972 when he was making $42,000/yr. Today, that’d be $256,000/yr.  Really Joe?  If you can’t run your own household efficiently, I don’t think you can run our country!

“Vote @realDonaldTrump!”

Universal Basic Income

It’s creeping ever more deeply into the Progressive-Democratic Party’s psyche and ideology. It’s an idea that was first dreamed up in the ’70s, and it remains an idea that can only fail were it to be implemented.

Giving everyone a basic income won’t improve anyone’s income; it’ll only incentivize employers to pay a wage diminished by the amount of the guaranteed government payment.  But the failure runs much deeper than that.

Such a scheme is inflationary: the outcome can only be a spike in inflation followed by price stabilization at a higher price level.