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> I have no idea why many "fiscal conservatives" have a problem with debt-fuelled capital investment by government whilst embracing it as normal and indeed good

> I have no idea why many "fiscal conservatives" have a problem with debt-fuelled capital investment by government whilst embracing it as normal and indeed good practice in the private sphere I'm going to go out on a limb and say financial conservatives would agree there should be a reasonable risk of failure for businesses leveraging debt. That's the risk they take to reap the benefits of future growth. Governments should not be allowed to (can't?) fail in the same way businesses can, so shouldn't be able to take on the same risk.

fineline 9y ago
Government checks can't bounce. http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf Unless they give up sovereignty over their own currency of course. A mistake made by European countries - several of which have paid and are continuing to pay the price. I absolutely agree that too much public debt is a bad thing, but not for the normally given reasons. It can lead to inflation, devaluation of the currency in relation to either goods or investment asset prices - indeed we see the latter at the moment in stock and property markets around the world, although that is driven by money creation through private lending. This is more worrying, as private checks can and do bounce, debts default, and we get another financial crisis. Govt debt should be used for capital investment - roads, communications, health, education and security facilities - and if so used can be a true investment with an expectation of future returns. Debt that blows out on operational expenditure, transfer payments, public sector bureaucracy bloat, is not sustainable.