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I'm not sure how you could ever manage to make $100 billion in government borrowing or spending not 'political'. Because this $100 billion is not being borrowe
by jeromec 16y ago
I'm not sure how you could ever manage to make $100 billion in government borrowing or spending not 'political'.
Because this $100 billion is not being borrowed or spent. The borrowing has already occurred and has been spent (in this case invested). This $100 billion is a separate unaccounted for number -- one of profit. It's not inherently part of a partisan issue, like the expiring Bush tax cuts, for example.
If you reduce government borrowing by $100 billion that frees up $100 billion for use by the private sector.
No it doesn't. The private sector is free to borrow as much as it likes from banks at any time. The only impacting factor might be on interest rates and inflation, but those are reflective of other factors as well.
- gwright 16y agoIf private investors purchase $100 billion in US bonds, that is $100 billion in cash that is not available to be invested elsewhere (i.e. in the private sector). When government borrowing goes down the cash flows to other investments it doesn't just sit there waiting for Uncle Sam to change its mind. Nor is available cash created out of thin air just because the US government wants to sell more bonds. Obviously the size of the credit market changes over time but in the short term, public and private interests are competing for the same pool of available cash.