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There is more to it than that -- read the article it links to about "Understanding the Modern Monetary System" (http://pragcap.com/resources/understanding-moder
by espeed 16y ago
There is more to it than that -- read the article it links to about "Understanding the Modern Monetary System" (http://pragcap.com/resources/understanding-modern-monetary-system http://pragcap.com/resources/understanding-modern-monetary-s...).
"Government deficit spending and tax collection should be maintained at a rate that does not impose financial hardship on the private sector. Because the Federal government is not a state or household it should not manage its balance sheet for its own benefit. Rather, taxes and government spending should be managed in a way that most benefits the private sector and encourages private sector prosperity."
"The key takeaway here is that the government balance sheet is not like a household or a state. It does not finance spending via revenues or debt issuance. The US government, as a monopoly supplier of currency in a floating exchange rate system never really has nor doesn’t have money."
- TomOfTTB 16y agoThat doesn't contradict anything I said. My whole point was the government will have to impose hardships on the private sector once the amount of debt gets too large to otherwise service. At which point people will start leaving.