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This presumes that deficit spending is necessarily bad. When your borrowing rate is sub-inflationary, you'd have to be a dope to spend today dollars. The UK is
by bhickey 10y ago
This presumes that deficit spending is necessarily bad. When your borrowing rate is sub-inflationary, you'd have to be a dope to spend today dollars.
The UK is still servicing debt on perpetual bonds from the 17th or 18th century. They carry a low interest rate, so it's cheaper to make payments rather than paying off the debt.
- soVeryTired 10y agoI agree that deficit spending can be useful in some circumstances, but I think it should be more like a last resort rather than a first port of call. Otherwise, how can you argue against the reductio-ad-absurdum that all spending should be deficit spending?
- bhickey 10y ago> [I]t should be more like a last resort rather than a first port of call. The obvious retort is that if all spending were deficit spending, people would stop lending us money. Rather than attaching unnecessary ideological baggage to tax policy, we should do the math. When deficit spending is cheap, we should exercise it. When it's expensive, taxes are wiser.