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A household an a government are very different things. A government that issue its own currency is not limited in the same way that a household. A government,

A household an a government are very different things. A government that issue its own currency is not limited in the same way that a household. A government, that issue its own currency, could spend (constrained by the real resources available) without creating debt at the same time. It's true that it would be wise to spend in creating more real capacity in the economy, instead of digging holes and fill them again.

gaius 9y ago
Printing money inexorably leads to inflation. So the money might be there "on paper" but worth less (or even worthless). The net result is the same - money moved from the future into the present, then the same rules on how to spend or invest it apply.
- RobertoG 9y ago
  "Printing money inexorably leads to inflation" That's not true. Inflation could be though as a ratio between the money in circulation and the productivity in the economy. If you increase both, numerator and denominator you don't get inflation. Also, "printing money" doesn't create inflation. Spending it when there is not enough available resources can create inflation. If you have doubts, check the QE programs of the FED and the ECB (ongoing). In fact, the more famous episodes of hyperinflation are originated because a collapse in the productive economy (the denominator), and not because an increase in money (the numerator). If real resources are increased, a 'space' is generated for spending, and it would be a real pity if that opportunity is wasted.
  - gaius 9y ago
    Sure, I should have been more precise. If the productivity in the real economy is growing then of course the money supply should increase to maintain the parity. But the context here is that holes in the budget don't matter because you can just print money to pay them off - yes technically you can, but not without consequences that may be worse than just biting the bullet!

gaius 9y ago

Printing money inexorably leads to inflation. So the money might be there "on paper" but worth less (or even worthless). The net result is the same - money moved from the future into the present, then the same rules on how to spend or invest it apply.

RobertoG 9y ago
"Printing money inexorably leads to inflation" That's not true. Inflation could be though as a ratio between the money in circulation and the productivity in the economy. If you increase both, numerator and denominator you don't get inflation. Also, "printing money" doesn't create inflation. Spending it when there is not enough available resources can create inflation. If you have doubts, check the QE programs of the FED and the ECB (ongoing). In fact, the more famous episodes of hyperinflation are originated because a collapse in the productive economy (the denominator), and not because an increase in money (the numerator). If real resources are increased, a 'space' is generated for spending, and it would be a real pity if that opportunity is wasted.
- gaius 9y ago
  Sure, I should have been more precise. If the productivity in the real economy is growing then of course the money supply should increase to maintain the parity. But the context here is that holes in the budget don't matter because you can just print money to pay them off - yes technically you can, but not without consequences that may be worse than just biting the bullet!