Teeter-Totter Economics

Though the title is silly, the topic is not. Here is a nice, straightforward, and simple post from my professor on the basics of how the government deficit works. The government sector is not the same as the private sector and is not subject to the same constraints. The government's deficit is our surplus.

Note: this argument does not support either political party. It is merely a description of how the process works.

What Happens When the Government Tightens its Belt?

What Happens When the Government Tightens its Belt? (Part II)


And to continue on with the MMT primer:
The Basics of Macro Accounting

Examining Caritas in Veritate, Part 1

The most recent Social Paply Encyclical written by Pope Benedict XVI almost 2 years ago, entitled Caritas in Veritate or Charity in Truth, was written to address the current social problems and issues of our time and to call to mind the principles of authentic development laid forth in Populorum Progressio written over 40 years ago.

This post begins a series examining the teachings of Caritas in Veritate so that we can better practice and apply Catholic Social Teaching in our daily lives.

Pope Benedict begins by explaining how charity in truth is at the center of authentic development and of the Church's social doctrine:

Charity in truth, is the principal driving force behind the authentic development of every person and of all humanity.

Each person finds his good by adherence to God's plan for him, in order to realize it fully: in this plan, he finds his truth, and through adherence to this truth he becomes free.

Charity, in fact, “rejoices in the truth.”

“God is love” (Deus Caritas Est): everything has its origin in God's love, everything is shaped by it, everything is directed towards it. Love is God's greatest gift to humanity, it is his promise and our hope.

Only in truth does charity shine forth, only in truth can charity be authentically lived.

In the present social and cultural context, where there is a widespread tendency to relativize truth, practising charity in truth helps people to understand that adhering to the values of Christianity is not merely useful but essential for building a good society and for true integral human development.

Charity is love received and given. This dynamic of charity received and given is what gives rise to the Church's social teaching, which is caritas in veritate in re sociali: the proclamation of the truth of Christ's love in society.

Without truth, without trust and love for what is true, there is no social conscience and responsibility, and social action ends up serving private interests and the logic of power, resulting in social fragmentation, especially in a globalized society at difficult times like the present.

After having shown the importance of charity in truth, Pope Benedict goes on to apply the principle to the practical moral goals of justice and the common good:

Charity goes beyond justice, because to love is to give, to offer what is “mine” to the other; but it never lacks justice, which prompts us to give the other what is “his”, what is due to him by reason of his being or his acting.

I cannot “give” what is mine to the other, without first giving him what pertains to him in justice.

On the one hand, charity demands justice. On the other hand, charity transcends justice and completes it in the logic of giving and forgiving.

The common good is the good of “all of us”, made up of individuals, families and intermediate groups who together constitute society. It is a good that is sought not for its own sake, but for the people who belong to the social community and who can only really and effectively pursue their good within it.

To desire the common good and strive towards it is a requirement of justice and charity.

Every Christian is called to practise this charity, in a manner corresponding to his vocation and according to the degree of influence he wields in the pólis (community).

Closing the introduction to Caritas in Veritate, Pope Benedict explains that he is continuing the message of Populorum Progressio, which he proclaims as the Rerum Novarum of the present age, by applying the principle of charity in truth to the authentic development of the human family and by explaining the Church's role in this mission:

Love in truth — caritas in veritate — is a great challenge for the Church in a world that is becoming progressively and pervasively globalized.

Only in charity, illumined by the light of reason and faith, is it possible to pursue development goals that possess a more humane and humanizing value.

The sharing of goods and resources, from which authentic development proceeds, is not guaranteed by merely technical progress and relationships of utility, but by the potential of love that overcomes evil with good (cf. Rom 12:21), opening up the path towards reciprocity of consciences and liberties.

The Church does not have technical solutions to offer and does not claim “to interfere in any way in the politics of States.”

She does, however, have a mission of truth to accomplish, in every time and circumstance, for a society that is attuned to man, to his dignity, to his vocation.

Without truth, it is easy to fall into an empiricist and sceptical view of life, incapable of rising to the level of praxis because of a lack of interest in grasping the values — sometimes even the meanings — with which to judge and direct it.

Fidelity to man requires fidelity to the truth, which alone is the guarantee of freedom (cf. Jn 8:32) and of the possibility of integral human development. For this reason the Church searches for truth, proclaims it tirelessly and recognizes it wherever it is manifested.

Caritas in Veritate

Populorum Progressio

Double Dip?

Certainly seems like we're headed that direction given the latest economic data releases. I don't see much help coming from our government (that includes both parties), despite their ability to further stimulate a recovery.

Time to panic? You Betcha.

It really can't be said too many times, there is NO debt crisis and austerity WILL make things worse. That is my official position. I really hope our nation figures it out before we repeat the mistakes of the Great Depression and the Lost Decade of Japan.

Top Ten Reasons to Remain Catholic

From America Magazine. Number 2 is all about Catholic Social Teaching!

Top Ten Reasons to Stay Catholic

Understanding Modern Money Theory

Modern Money Theory (MMT) is the basis for my understanding of macroeconomics and is one of the reasons why I advocate certain policies over others and why I say seemingly crazy things like "we are not facing a debt crisis."

Randall Wray has just begun a weekly primer on MMT for newcomers to both MMT and economics. I highly recommend following this series to better understand our current economic situation and to understand where many of my posts are coming from.

Modern Money Theory Primer

Randall Wray on the Crisis and Looking Ahead

Randall Wray Interviewed on The Real News