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> It surely is. The federal government ran a $880 billion deficit in 2018. You do realise the government is supposed to run a deficit, right? That's quite lite
by candiodari 4y ago
> It surely is. The federal government ran a $880 billion deficit in 2018.
You do realise the government is supposed to run a deficit, right? That's quite literally where money comes from.
You can make the case that it's too big ... and it is, but it should run a deficit.
- rayiner 4y agoThat’s not how it works at all.
- feet 4y agoCare to expand on that?
- rayiner 4y agoThe M0 money supply increased from $350 billion to $900 billion from 1990 to 2008. During that time the federal debt increased from $3 trillion to $9 trillion. So the debt (due to the structural budget deficit) increased vastly faster than the portion of the money supply attributable to printing currency. Moreover, most money is not created by the government printing money, it's created by federal reserve purchases of debt or bank lending. Neither of those are reflected in the deficit. The prior poster is thus incorrect to say that the government "needs" to run a budget deficit "because that's where money comes form."
- JamesBarney 4y agoGiven inflation and GDP growth you would want some deficit spending in order to keep a constant debt to GDP ratio.