Economist Stephanie Kelton on The Deficit Myth

[laughing dog]

They don't need to collect taxes to cover a significant portion of spending in the same way they don't "need" to pay any bondholders back. They do it because of the significant negative consequences of not doing so.

I suppose it depends what you mean by "cover."

Yes, if you put money into circulation without taking money out of circulation, then you cause inflation. We need taxes to hold down inflation.

What we don't need taxes for is to have money to spend. The limit on spending is self restraint, not some imaginary fund of collected taxes.

Taxes do not take money out of circulation any more or less than grocers accepting payment for their goods takes money out of circulation.

When the gov't collects taxes in the form of money, that money does not disappear. It does not go into a deep vault into the ground where it sits. It is put back into the economy when the gov't buys something, just like when a grocer buys something.

The notion that taxation destroys money is counterfactual. Taxation withdraws income from spenders which reduces their demand for goods and services. It reduces the amount of their income that is available to spend. But the amount of money in the economy does not change at all.

I realize the equating money with income is done all the time, but the two are not the same. One can have money without income, and one can have income without money.

 

[laughing dog]

<<snip>>​

The only way QE reduces interest rates is by bidding UP asset prices (i.e. capital gains) which ought to stimulate spending since asset holders are wealthier.

If interest rates for treasuries are lower, then there is more gov't income for spending/less need for gov't borrowing. So the effect on spending is not contractionary.

This is known as the "Wealth Effect." While you can find many papers arguing how big it is no one believes that it produces much in the way of what is needed in a downturn, consumption spending. It has a very low bang for the buck. But it does fulfill the prime function of the government these days, in the neoliberal period, to increase the wealth of the already wealthy.

QE's do produce inflation in the stock market and in the real estate market, two areas in which inflation bizarrely is considered to be a good thing. How increasing housing costs and increasing the pressure on corporate executives to constantly increase profits usually by lowering wages and shipping manufacturing overseas are good for the economy is beyond me.

The potential effects of the expansion of the money supply in the short run on the economy are the "interest rate effect", the "wealth" effect, the "exchange rate" effect, and the "expectations" effect. The strength or weakness of each effect depends on the state of the economy. So QE may affect the economy through a number of those effects. Usually, the "interest rate" effect is considered the strongest one in the US economy.

 

[Wiploc]

They don't need to collect taxes to cover a significant portion of spending in the same way they don't "need" to pay any bondholders back. They do it because of the significant negative consequences of not doing so.

I suppose it depends what you mean by "cover."

Yes, if you put money into circulation without taking money out of circulation, then you cause inflation. We need taxes to hold down inflation.

What we don't need taxes for is to have money to spend. The limit on spending is self restraint, not some imaginary fund of collected taxes.

Taxes do not take money out of circulation any more or less than grocers accepting payment for their goods takes money out of circulation.

I realize the equating money with income is done all the time, but the two are not the same. One can have money without income, and one can have income without money.

I'm not the one equating them. You're the one saying that once the state collects income then it has money to spend.

I'm the one saying that the state can spend any amount of money it chooses, regardless of whether it collects taxes.

When the gov't collects taxes in the form of money, that money does not disappear. It does not go into a deep vault into the ground where it sits.

You can think of it that way if you want. But our conceptions of what happens are viewpoints, not truths. Money is fungible, so the question of which dollar went where is not truth apt.*

I think it useful to think of tax revenues as destroyed, vaporized, and to think of all spending as new money, freshly printed.

It is put back into the economy when the gov't buys something, just like when a grocer buys something.

If we try to adopt that view, then it often goes back into the economy before it is collected. Magic!

The notion that taxation destroys money is counterfactual.

You have overstated your case.

Taxation withdraws income from spenders which reduces their demand for goods and services.

Now you contradict yourself. You're suddenly taking my side. I'm the one who argues that taxation reduces inflation. You're the one who says it has no such effect.

It reduces the amount of their income that is available to spend.

Yes it does. Taxation reduces the amount of money in the economy.

And government spending puts money into the economy.

The fact that taxes and government spending roughly offset each other doesn't change the fact that (as you admitted two quotes above) taxation takes money out of circulation.

We could have taxes without spending, and that would cause depression. We could have spending without taxes, and that would cause runaway inflation. The fact that we tax and spend in roughly equal amounts doesn't make it true that we are spending the taxes we collected. We are spending roughly the amount of money we collected.

But the amount of money in the economy does not change at all.

That is true if and only if the tax revenue is exactly offset by spending. I doubt that that ever happens.

---

* An illustration of fungible money:

Suppose a polity spends a billion dollars a year on schools. Suppose it sells taxpayers on a new tax by saying it will raise half a billion dollars a year for schools. The people vote for the new tax, which does bring in half a million.

And now suppose that spending on schools goes up by only ten percent.

Did they lie when they said the money would go to schools?

No. At least they would argue that the half billion from the new tax goes entirely to schools, which freed up some of the money that had been going to schools to be spent elsewhere.

One can feel cheated, misled, but one cannot fairly say they lied.

 

[Horatio Parker]

Yeah, and the US federal gov't depends on tax revenue for around 75% of its spending.

In what sense do we "depend on it"?

In the sense there us a debt ceiling that has historically been used to slow the increase in debt. In the sense our representatives argue over the level if taxes, tax revenue and deficit spending. Like it or not, we reky on tax revenue to support spending..

Those points are political. Yes, govt not depending on taxation is politically untenable. Doesn't make it operationally impossible.

The Covid situation is stressful enough without worrying if the country will go broke.

 

[SimpleDon]

See any borrowing in my numbers?

So, in your usage, spending more than you take in is not a deficit unless you also borrow money.

Do I have that right?

Borrowing and the printing press are two completely different means of obtaining money. You have to repay borrowing, there's nothing to repay with the printing press.

Wrong on both counts. Not only do we not have to pay off the national debt, we can't pay it off, except in the trivial case of increasing our exports and letting other countries pay it off, destroying the world's economy rather than the Trump/movement conservative/libertarian desire to just destroy our economy, by reestablishing the gold standard or taxing us to pay off the debt by running a budget surplus or continuing to increase income inequality by suppressing wages to increase the incomes of the wealthy or applying austerity to our budget or failing to properly regulate the financial sector, or by nominating and electing incompetents like Trump to important positions, etc.

All that you have to do to remove money in the economy from running the printing press is to increase taxes and rather than spending the excess just destroy it. The solution to the printing press is the shredder. The best way to control inflation is by using taxes.

 

[Axulus]

Borrowing and the printing press are two completely different means of obtaining money. You have to repay borrowing, there's nothing to repay with the printing press.

Wrong on both counts. Not only do we not have to pay off the national debt, we can't pay it off, except in the trivial case of increasing our exports and letting other countries pay it off, destroying the world's economy rather than the Trump/movement conservative/libertarian desire to just destroy our economy, by reestablishing the gold standard or taxing us to pay off the debt by running a budget surplus or continuing to increase income inequality by suppressing wages to increase the incomes of the wealthy or applying austerity to our budget or failing to properly regulate the financial sector, or by nominating and electing incompetents like Trump to important positions, etc.

All that you have to do to remove money in the economy from running the printing press is to increase taxes and rather than spending the excess just destroy it. The solution to the printing press is the shredder. The best way to control inflation is by using taxes.

WTF are you on about? The debt can be paid off over the long run if government spending increases run lower than GDP growth and taxes go up a bit. Not saying this is what should be done, but this by no means would lead to your bizarre doomsday scenarios.

 

[SimpleDon]

Borrowing and the printing press are two completely different means of obtaining money. You have to repay borrowing, there's nothing to repay with the printing press.

They are NOT different in any important way IF YOU ARE A CURRENCY ISSUING GOVERNMENT.

If the US government owes someone US dollars, then they could repay that debt at any time, by simply printing dollars.

Or they could just print dollars to begin with, and skip the accounting convention of referring to it as a debt.

There's really no difference at all. Debt is money. Money is debt. Governments can never be unable to pay a debt denominated in the currency that they issue.

This is completely unlike the way money works for non-currency issuing entities; Every understanding you have of how borrowing works, based on your own experience, is valueless in this situation (unless you have experience working for a reserve bank or national treasury).

Government debts are not like household debts. Government debts are not like corporate debts. Government debts are not like personal debts.

You forget there is one way that the US could be put into the position of defaulting on its national debt and it has come close to happening on at least two occasions that I remember, and that is due to stupidity. The Republicans in Congress have threatened to not vote to raise the debt ceiling which would put us into default.

 

[laughing dog]

Taxes do not take money out of circulation any more or less than grocers accepting payment for their goods takes money out of circulation.

I realize the equating money with income is done all the time, but the two are not the same. One can have money without income, and one can have income without money.

I'm not the one equating them.

When you say taxes destroy money.

You're the one saying that once the state collects income then it has money to spend.

That is reality.

I'm the one saying that the state can spend any amount of money it chooses, regardless of whether it collects taxes.

I do not dispute that.

You can think of it that way if you want. But our conceptions of what happens are viewpoints, not truths. Money is fungible, so the question of which dollar went where is not truth apt.*

WTF?

I think it useful to think of tax revenues as destroyed, vaporized, and to think of all spending as new money, freshly printed.

Then glory in your confusion.

. <<snip>>
Now you contradict yourself. You're suddenly taking my side. I'm the one who argues that taxation reduces inflation. You're the one who says it has no such effect.

Taxation is contractionary policy which tends to be deflationary. But that does not mean taxation destroys money.

Yes it does. Taxation reduces the amount of money in the economy.

Only if you think the gov’t is not part of the economy.

 

[laughing dog]

In the sense there us a debt ceiling that has historically been used to slow the increase in debt. In the sense our representatives argue over the level if taxes, tax revenue and deficit spending. Like it or not, we reky on tax revenue to support spending..

Those points are political. Yes, govt not depending on taxation is politically untenable. Doesn't make it operationally impossible.

Never said it was impossible. Whether it is the best course of action is the question.

 

[SimpleDon]

Borrowing and the printing press are two completely different means of obtaining money. You have to repay borrowing, there's nothing to repay with the printing press.

Wrong on both counts. Not only do we not have to pay off the national debt, we can't pay it off, except in the trivial case of increasing our exports and letting other countries pay it off, destroying the world's economy rather than the Trump/movement conservative/libertarian desire to just destroy our economy, by reestablishing the gold standard or taxing us to pay off the debt by running a budget surplus or continuing to increase income inequality by suppressing wages to increase the incomes of the wealthy or applying austerity to our budget or failing to properly regulate the financial sector, or by nominating and electing incompetents like Trump to important positions, etc.

All that you have to do to remove money in the economy from running the printing press is to increase taxes and rather than spending the excess just destroy it. The solution to the printing press is the shredder. The best way to control inflation is by using taxes.

WTF are you on about? The debt can be paid off over the long run if government spending increases run lower than GDP growth and taxes go up a bit. Not saying this is what should be done, but this by no means would lead to your bizarre doomsday scenarios.

Only if you are willing to destroy all of the personal and business savings in the country. I think that this would be a way to tank the economy.

Only if you are willing to put up with deflation. You must not have read Irving Fisher. The money supply must grow if the economy grows. If you shrink the money supply the economy has to shrink. There won't be any growth in GDP, which is the economy, if you shrink the money supply. Money is debt. Debt is money. This is the way that it has always been. At least as I said if you can't run a trade surplus. Letting other countries buy down your national debt.

I had the impression that you are a proud neoliberal loving the free market and a Milton Friedman monetarist. I guess I was wrong.

Ying and yang. Cause and effect aren't a one way street.

 

[Horatio Parker]

In the sense there us a debt ceiling that has historically been used to slow the increase in debt. In the sense our representatives argue over the level if taxes, tax revenue and deficit spending. Like it or not, we reky on tax revenue to support spending..

Those points are political. Yes, govt not depending on taxation is politically untenable. Doesn't make it operationally impossible.

Never said it was impossible. Whether it is the best course of action is the question.

Of course it's ridiculous in practice. Taxation creates demand for the currency. It'd be economic suicide to not tax.

The point is that there should be better justifications for taxation than govt needs money to spend. And better justifications for austerity. If we are operating at less than full capacity with significant unemployment, then govt can spend more with smaller risk of harm.

 

[SimpleDon]

In the sense there us a debt ceiling that has historically been used to slow the increase in debt. In the sense our representatives argue over the level if taxes, tax revenue and deficit spending. Like it or not, we reky on tax revenue to support spending..

Those points are political. Yes, govt not depending on taxation is politically untenable. Doesn't make it operationally impossible.

Never said it was impossible. Whether it is the best course of action is the question.

The main function of taxation is to reduce inflation. Think of it this way. When you pay your taxes the federal government doesn't need your money because they can create all of the dollars that they need to run the government so they just destroy the money that you send them and they create the money that they need to run the government. The score card on how well they do balancing the paper shredder and the printing press is the amount of inflation in the economy.

This is a simplification of what happens. But so is confusing the budget of a sovereign government with a household's budget. And my explanation is closer to the truth than the budget deficit is bad except when my party wants to fight a war or to give the already rich yet another tax cut. Every highly developed country in the world runs a budget deficit. The US through creative accounting has run budget surpluses, what, three times since the end of World War II? You would think that an evidence based economics would have decided by now that maybe this might mean that a modern industrial economy needs to run a budget deficit every year. Even if Adam Smith didn't say so.

 

[laughing dog]

Never said it was impossible. Whether it is the best course of action is the question.

The main function of taxation is to reduce inflation. Think of it this way. When you pay your taxes the federal government doesn't need your money because they can create all of the dollars that they need to run the government so they just destroy the money that you send them and they create the money that they need to run the government. The score card on how well they do balancing the paper shredder and the printing press is the amount of inflation in the economy.

This is a simplification of what happens. But so is confusing the budget of a sovereign government with a household's budget. And my explanation is closer to the truth than the budget deficit is bad except when my party wants to fight a war or to give the already rich yet another tax cut. Every highly developed country in the world runs a budget deficit. The US through creative accounting has run budget surpluses, what, three times since the end of World War II? You would think that an evidence based economics would have decided by now that maybe this might mean that a modern industrial economy needs to run a budget deficit every year. Even if Adam Smith didn't say so.

I agree that your explanation is better than the budget deficit is bad except when the party wants to fight a war or give the rich another tax cut. But you will forgive me if I think that
1) it is not setting the standard very high, and
2) it does not make a valid explanation.

 

[Loren Pechtel]

Borrowing and the printing press are two completely different means of obtaining money. You have to repay borrowing, there's nothing to repay with the printing press.

Wrong on both counts. Not only do we not have to pay off the national debt, we can't pay it off, except in the trivial case of increasing our exports and letting other countries pay it off, destroying the world's economy rather than the Trump/movement conservative/libertarian desire to just destroy our economy, by reestablishing the gold standard or taxing us to pay off the debt by running a budget surplus or continuing to increase income inequality by suppressing wages to increase the incomes of the wealthy or applying austerity to our budget or failing to properly regulate the financial sector, or by nominating and electing incompetents like Trump to important positions, etc.

All that you have to do to remove money in the economy from running the printing press is to increase taxes and rather than spending the excess just destroy it. The solution to the printing press is the shredder. The best way to control inflation is by using taxes.

If there really were no difference everyone would use the printing press, there would be no government borrowing other than by entities that can't print. (States, EU members etc.)

 

[bilby]

Borrowing and the printing press are two completely different means of obtaining money. You have to repay borrowing, there's nothing to repay with the printing press.

They are NOT different in any important way IF YOU ARE A CURRENCY ISSUING GOVERNMENT.

If the US government owes someone US dollars, then they could repay that debt at any time, by simply printing dollars.

Or they could just print dollars to begin with, and skip the accounting convention of referring to it as a debt.

There's really no difference at all. Debt is money. Money is debt. Governments can never be unable to pay a debt denominated in the currency that they issue.

This is completely unlike the way money works for non-currency issuing entities; Every understanding you have of how borrowing works, based on your own experience, is valueless in this situation (unless you have experience working for a reserve bank or national treasury).

Government debts are not like household debts. Government debts are not like corporate debts. Government debts are not like personal debts.

You forget there is one way that the US could be put into the position of defaulting on its national debt and it has come close to happening on at least two occasions that I remember, and that is due to stupidity. The Republicans in Congress have threatened to not vote to raise the debt ceiling which would put us into default.

Unwilling to pay isn't the same as unable to pay.

 

[bigfield]

Borrowing and the printing press are two completely different means of obtaining money. You have to repay borrowing, there's nothing to repay with the printing press.

Wrong on both counts. Not only do we not have to pay off the national debt, we can't pay it off, except in the trivial case of increasing our exports and letting other countries pay it off, destroying the world's economy rather than the Trump/movement conservative/libertarian desire to just destroy our economy, by reestablishing the gold standard or taxing us to pay off the debt by running a budget surplus or continuing to increase income inequality by suppressing wages to increase the incomes of the wealthy or applying austerity to our budget or failing to properly regulate the financial sector, or by nominating and electing incompetents like Trump to important positions, etc.

All that you have to do to remove money in the economy from running the printing press is to increase taxes and rather than spending the excess just destroy it. The solution to the printing press is the shredder. The best way to control inflation is by using taxes.

If there really were no difference everyone would use the printing press, there would be no government borrowing other than by entities that can't print. (States, EU members etc.)

Some of the comments in this thread has me wondering if the "printing press" metaphor is being taken literally.

 

[SimpleDon]

I am cleaning out my Sublime Text files of posts that for various reasons that I didn't post.

DBT, good explanation which agrees with me, or I agree with that.
Were you trying to contradict?

Speaking of low bond yield, proponents of everything is fine like to appeal to it as a proof that everything is fine, debt is servicable, but as I mentioned US is still a more less largest economy with the largest military who can push around anyone anywhere and its bonds is still a last resort. That makes it superficially stable, whenever financial shit happens somewhere everyone runs to US bonds as an ultimate safe haven.
Once US loses that status (Yes, I am looking at China) all the debt weight would suddenly start feel very real and unserviceable . And one of the ways to lose that status prematurely is by piling up too much debt.

And yet your analysis of the US as the biggest bull in the China shop intimidating every other country with the size of its military to command a low interest rate on the bonds completely fails to explain the country that commands the second lowest interest rate on the bonds, Japan. Who doesn't have an intimidating military and has a higher debt load per capita. And I mean taken across the entire population, since you probably agree with Trump that there are a lot of different per capitas when faced with the fact that the US has the highest death totals absolutely and only the 41st highest testing rate per capita in the world, not the highest in the world as he claims.

The loss in the view of people from other countries in the stability of the US economy due to the size of our national debt will pale in comparison to the diminished view of the US having elected the tragically incompetent Trump and his administration to the presidency because of the ineptitude of Trump and his administration not handling the current pandemic well as evidenced by all of the dead.

The theory of we need a smaller government and laissez faire problem solving just doesn't work well in the situations where what we need is a competent federal government to handle problems like the pandemic. My friends in Germany use to send me funny cartoons and jokes about Trump. Now they send me condolences for living in such a poorly governed country.

============== § ==============​

The component of the national debt generated by a balance of payments deficit on the part of the US is another matter entirely.

(The trade deficit is a part of the balance of payments deficit. The trade deficit in products imported from overseas is somewhat balanced by the world buying our financial products, stocks, bonds, and insurance. This trade was partially reduced by the RDS (regulation derangement syndrome) caused Great Financial Crisis and Depression.)

In a very real sense the trade deficit represents manufacturing jobs that we have shipped out of the US. This is bad for our economy, it reduces the economic activity in the US because the wages for producing the products are in the economy of another country.

It is bad for the workers in the US because they are forced to take jobs in the service sector. Jobs that typically pay less than the manufacturing jobs that were shipped overseas. It also suppresses the wages in the manufacturing jobs that are still left in the US because of the constant threat of the owners moving the jobs overseas.

The money that is spent for the products manufactured in other countries leaves our economy for good and has to replaced with money generated in the US by either personal or national debt to keep the economy in the US growing. This is because of the simple fact that the money supply has to grow as the economy grows.

Notice that I didn't include business debt. This is because shipping the manufacturing jobs overseas also increases the profits of the businesses who do it. And along with the profits the incomes of the shareholders increases. Since the vast majority of the shareholders are the already rich this decrease in the wages of the average workers and the resultant increases in the profits of the businesses creates the income inequality that we currently have. Along with a decrease in the economic activity because the already rich have a propensity to save any additional income they receive rather than spending it, effectively taking it out of the economy.

A simple calculation of what wages and profits would be based on the split in the 1970s (a 50/50 split between profits and wages of the gains from increased productivity) projected to today and what they actually are today (100% going to profits) shows us that 85% of the raise in the accumulated profits of the corporations in the neoliberal period of governance of the economy comes from wage suppression, about 19 trillion dollars since 1980.

 

[SimpleDon]

Borrowing and the printing press are two completely different means of obtaining money. You have to repay borrowing, there's nothing to repay with the printing press.

Wrong on both counts. Not only do we not have to pay off the national debt, we can't pay it off, except in the trivial case of increasing our exports and letting other countries pay it off, destroying the world's economy rather than the Trump/movement conservative/libertarian desire to just destroy our economy, by reestablishing the gold standard or taxing us to pay off the debt by running a budget surplus or continuing to increase income inequality by suppressing wages to increase the incomes of the wealthy or applying austerity to our budget or failing to properly regulate the financial sector, or by nominating and electing incompetents like Trump to important positions, etc.

All that you have to do to remove money in the economy from running the printing press is to increase taxes and rather than spending the excess just destroy it. The solution to the printing press is the shredder. The best way to control inflation is by using taxes.

If there really were no difference everyone would use the printing press, there would be no government borrowing other than by entities that can't print. (States, EU members etc.)

The vast majority of developed countries do run budget deficits every year. The US has had only two or three years of budget surpluses since the end of World War II 75 years ago. These two or three years required some creative accounting to show a budget surplus.

I assume you are still asserting that there is a difference between a sovereign government, like the US federal government, a government that has its own currency and whose debt is in its own currency, borrowing money or it running the printing press.

I said that you were wrong and I told you the reasons why you were wrong. You did nothing but to repeat your assertion. I can amplify the reasons I gave why you are wrong but I would ask that you either tell me why you are right or why the reasons I gave you are wrong. This is a discussion board. Implicate in such a board is that if you post you must at least make an attempt to discuss the points raised.

I have made many statements why there is no difference for a sovereign government whose debt is in its own currency between its debt and running the printing press, that is producing money out of thin air to meet its obligations. These include,

1. It is well accepted that a sovereign government can't save in its own currency, that it is meaningless, reference the attempt to increase the payroll tax to save money to use to pay the boomers Social Security.
2. Less well accepted is that if the federal government can't save money in its own currency the opposite must also be true that the federal government can't really be in debt in its own currency, that it is also meaningless because the government can always create money to meet the interest payments on the debt.
3. That the federal government can't ever pay off the national debt because to do so would also destroy all of the national savings, which would tank the economy and increase the budget deficit and the national debt.
4. Debt is money and money is debt.
5. Debt creates money and the lack of money increases debt.
6. The primary way that money is created is by banks loaning money to businesses and to consumers because banks don't loan out deposits, they loan out money created out of thin air.
7. If you believe that money is created by fractional reserve banking with deposits being as much as 10% of the money loaned out you have to explain where the 90% comes from, I have never seen an explanation of FRB that explained that.
8. FRB has been ineffective ever since Congress allowed banks to lend out money created 100% out of thin air, leaving the only effective limit on the amount of loans that they can write is the capital limits, currently they can't loan more than 8 times their capitalization, but they are lobbying to remove this requirement, too.
9. As we learned in the DDS GFC&R (The Deregulation Delusion Syndrome Great Financial Crisis and Recession) it is very dangerous to give an entity the ability to create money out of thin air and to allow the same entity to risk that money in the stock market or in derivatives like mortgage backed securities.
10. The Fed creating money out of thin air and buying T-Bills or requiring banks to use the Fed's money in their reserve accounts which were at some point created out of thin air to buy T-Bills are the same as running the printing press because both are the oxymoron of the federal government owing the money to itself.
11. The requirement that the federal government has to sell T-Bills to finance the deficit is a statutory requirement put in place by the Congress who incorrectly thought the requirement would restore some of the economic discipline of the gold standard, it is not an economic necessity.
12. There is no discipline imposed by the gold standard, only the much more destructive deflation that increases the value of debt, the opposite of what we need, moderate inflation that writes down debt.
13. The only class that benefits from the requirement that the government has to issue bonds to finance the budget deficit are the so-called investor class, because they have been given so much money from tax cuts and corporate profits inflated by the active wage suppression of the federal government, in the neoliberal period to "invest," they are running out of places to put their money that provides a safe return.
14. Say's law is dead, our modern industrial economy is driven by demand, not by supply, by consumption not by investment, by wages not by profits and yet the prevailing neoliberal economic theory held by the conservative/libertarian economics says the opposite, that the supply side determines the health of the economy and the best path to growth in the economy.
15. What the supply side economics accomplishes is not growth in the economy but growth in the incomes of the 1% and Gilded Age and Mexican levels of income inequality.
16. This still growing income inequality and not socialism or social democracy, is the greatest threat to our economy, our capitalism, and our society because there will eventually be a backlash against it that will demand immediate action to solve a problem that should be corrected slowly over time.
17. Private debt is much more destructive than public debt because it leads to debt deflation in a recession when people pay off debt instead of spending the money.

Pick just one of the above and tell me why I am wrong. Discuss it.

I could also provide reasons why movement conservatism has completely failed us. Today we went over 100,000 deaths in the US from what our far right president first called a hoax. The US now has 28% of the world's deaths with only a little over 4% of the world's population. It would be a much higher percentage of the world's deaths if not for the other far right governed countries like Italy and Brazil.

 

[SimpleDon]

If there really were no difference everyone would use the printing press, there would be no government borrowing other than by entities that can't print. (States, EU members etc.)

Some of the comments in this thread has me wondering if the "printing press" metaphor is being taken literally.

The printing press metaphor is one of the triggers that movement conservatism has taught its followers to salivate at while not thinking about. It is like the word "liberal" or increasing the minimum wage or the word "automation" as why we can't change anything from the conservative/libertarian dictates.

 

[Loren Pechtel]

If there really were no difference everyone would use the printing press, there would be no government borrowing other than by entities that can't print. (States, EU members etc.)

The vast majority of developed countries do run budget deficits every year. The US has had only two or three years of budget surpluses since the end of World War II 75 years ago. These two or three years required some creative accounting to show a budget surplus.

I assume you are still asserting that there is a difference between a sovereign government, like the US federal government, a government that has its own currency and whose debt is in its own currency, borrowing money or it running the printing press.

I said that you were wrong and I told you the reasons why you were wrong. You did nothing but to repeat your assertion. I can amplify the reasons I gave why you are wrong but I would ask that you either tell me why you are right or why the reasons I gave you are wrong. This is a discussion board. Implicate in such a board is that if you post you must at least make an attempt to discuss the points raised.

If you were right there would be no borrowing by entities that can print money. The fact that they don't do this shows there must be some downside to printing that exceeds the downside of borrowing.