Bill Goggin
@wgoggin
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Exposing the damaging myths of mainstream economics and their implications for federal fiscal and monetary policy.
Joined April 2013
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The most harmful of mainstream lies is that the national debt arises from borrowing (bond sales) to finance deficit spending.
Bond sales finance NOTHING. They ONLY manage interest rates.
The national debt reflects regressive monetary policy, NOT profligate government spending.
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@chronicle
Nonsense. What really bothers her is that university professors teach students "HOW to think."
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Right wing assholes on Morning Joe struggling with how Trump changed Republicans.
HE DIDN’t.
The very same sick underbelly of racists, misogynists, xenophobes, and bigots put the likes of Joe Scarborough in office.
It was ALWAYS Trump’s party. With slightly better manners.
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The U.S. government may *appear* to borrow, but it doesn’t.
Congress may even *intend* that it borrow, but it doesn’t.
Treasury and Fed may *operate* as if they borrow, but they don’t.
The nation may *believe* it’s in debt, but it isn’t.
And macro policy suffers from it.
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There’s no “cost” to saving the economy. The only limit to consider is inflation.
If it takes $10T, there’s no “cost” to spending $10T. Suggesting otherwise is nonsense. And it need not be paid back.
Cost is relevant to where and how to spend the $10T, not whether to spend it.
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Proof today’s Democratic Party is corrupt: Despite the dire necessity of spending trillions of dollars over the next few years to save the economy, they still refuse to embrace the progressive change they vilified as “ponies” too “costly” to even consider.
Just let that sink in.
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Mainstream macro policy is replete with error.
A mountain of errors.
The peak of the mountain is the foundational error that the US government borrows.
It doesn’t.
Basic accounting and flow of funds show that *unequivocally*.
Get that wrong, get the rest of it wrong as well.
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No, the REAL absurdity is that the “debt” is not really debt at all. The U.S. government doesn’t have to “borrow” the money that it creates.
The idea of minting a trillion dollar coin may seem absurd on its face, but the real absurdity is the debt ceiling itself. There’s a beautiful symmetry in thwarting the ridiculous problem it poses with an equally ridiculous solution, writes
@DCeiver
.
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That inflation, transitory or permanent, requires slowing the economy, damaging the poor, and limiting sorely needed government infrastructure and climate investment is irresponsibly foolish.
Proactively build inflation offsets into necessary spending.
Don’t just shut it down.
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Make no mistake: ongoing skirmishes between MMT and the likes of Summers, Furman, and Smith are not about only the “economics.”
They’re a big stakes proxy for the perennial, now existential, war over the federal government’s ability to prioritize and spend for public purpose.
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It is now patently obvious that there were trillions of $ in fiscal space throughout BHO’s terms.
Yet we were lectured to: “we are broke.” We have to “tighten our belt.” We need a “Grand Bargain” to hold the line on deficit spending.
Think about the opportunities pissed away.
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Hiking interests rates (and interest payments) in response to supply-side inflation *feeds* inflation, exacerbates inequality, and wastes fiscal space that could be used for social and educational programs, infrastructure, and climate.
A singularly stupid and destructive policy.
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Jerome Powell: “… we're borrowing from future generations. And every generation really should pay for the things that it needs and not hand the bills to our children and grandchildren. I think this is, again, not controversial.” (60 Minutes)
TOTAL *nonsense* from the Fed chair.
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Yellen: Economy suffers from “fiscal drag” and the deficit must be cut.
This is fundamentally wrong.
Fiscal drag occurs when government spending is TOO LOW and/or taxes are TOO HIGH — even if caused by inflation.
Cutting the deficit INCREASES fiscal drag.
Pretty basic stuff.
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That the most impressive, effective, and successful fiscal intervention by government to save and reinvigorate the economy is now being attacked as a misstep that has led to a “national crisis” demanding immediate budget-cutting attention is no coincidence.
Austerity’s knocking.
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The U.S. is *NOT* in debt.
NOT in debt the way states and most businesses are. Not in debt the way you and I are.
NOT in debt to China.
NOT in debt in any way that affects government spending.
Our “national debt” is a savings account that benefits the rich.
Educate yourself!
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”MMT does not support quantitative easing (QE), nor does it prescribe ‘helicopter drops,’ for the simple reason that there is no such thing as a ’helicopter-money’ alternative to financing a fiscal-stimulus package.”
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The new mainstream macro consensus is that deficit spending makes sense now: we can “go big” and borrow because interest rates are low. And, while the public debt is not an issue now, it could be long term.
Only one problem: like the old consensus, the new one is pure bullshit.
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Pelosi: “There's more we could have done, but again, wanting to keep the cost in line.”
In line with what? Even in a pandemic and near total economic shutdown, this dinosaur and her supporters are still spouting the nonsense of “sound finance” that killed the Obama presidency.
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One economist says “federal borrowing reduces national savings over time" and "debt is on an unsustainable course."
Another says the statements are flatly false.
Who’s right, who’s wrong?
It’s your responsibility, progressive, to know the answer.
Our future depends on it.
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Mainstream Econ’s false mantra that government must “pay for” deficits by borrowing or raising taxes has blocked public purpose spending for decades.
Incredibly, this technically false form of austerity economics now threatens to undermine an existential goal: saving the planet.
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Standard in MMT.
For decades.
Just sayin’.
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Do a search on “national debt” and read the replies of virtually everyone: it’s a crisis and government spending *must* be cut.
This is the depressing and destructive result of one of the worst *lies* in mainstream macroeconomics: that the U.S. government borrows to spend.
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“Deficit fears stop Democrats from moving forward on social programs, while Republicans plow ahead with tax cuts when they get to power.”
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Clown.
The purpose of cars is to serve the needs of people, not the other way around. Our policies should reflect that
#SXSW
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“ … Grey wants the national debt to be paid off in one fell swoop since it’s such a divisive issue … after using a coin to pay off the national debt, the Federal Reserve should come in and immediately issue its own bonds as an investment device … .”
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”Money is not something ‘out there’ that the government must borrow from the public in order to function. It is created as government functions; only afterward, those who take payment may then trade the cash for a bond.”
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Mainstream narrative: the nation is broke; deficits raise interest rates, crowd out investment, cause inflation; public debt is too high, burdens future generations, must be paid back.
“The Deficit Myth:” that’s all nonsense.
Mainstream critics: “nothing new here.”
Readers: 🙄
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Thank god we reached across the aisle for their good ideas for eight years. Really paid off.
The Republican Party is currently defending a pedophile so that he can vote for a tax plan which takes money meant for sick children and gives it to people with private jets.
It calls itself the party of "family values."
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“Certainly part of the package, the parts that are permanent, will be paid for in order to not raise long-term deficits ...”
Hold on! This makes no sense.
Infrastructure investment CREATES future fiscal space and REDUCES the need for future deficits.
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Failure of the Fed chair and the Treasury Secretary to inform the public that issuing bonds is an interest-rate-management *policy choice* — unnecessary for government to deficit spend — misleads Americans to view the national debt as a “burden” rather than as *national savings*.
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Sure, but this is too narrow a lesson to be drawn from the hugely successful fiscal response to Covid.
The real lesson is that government spending can always serve public purpose if the private sector can’t or won’t — not just in crises.
“Room to spend” can always be created.
@besttrousers
Yes, thank you. It makes me pull my hair out when people say “if we run up debt now we won’t be able to pull the economy out of recession later.” Yes we will! Almost by definition, recessions = there’s room to spend more.
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No, there is a very simple way out: just pay it off — with key strokes.
Requires no increase in spending or taxes, is deflationary, and frees up fiscal space.
Stop the insanity.
US national debt by just passed $34 trillion and only the interest expense is now at $1.1 trillion.
- There is no way out of this anymore
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Keep in mind also that, with the election only 6 months away, there was literally NO economic or political “cost” to House Dems going 1st with a broad, generous bill, say, $10T, to save the economy and the health of the nation.
Indeed, it was political malfeasance not to do so.
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Let’s Play *Fantasy* Macro
Pretend US must “borrow” to spend over tax revenue.
Pretend bond sales to maintain interest rates are “borrowing.”
Pretend the bonds are “debt” that burdens our grandchildren.
Pretend “debt” is too high and SS and Medicare must be cut.
So much fun!
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Understanding that the U.S. government does NOT borrow in order to finance a deficit is fundamental to doing sound macroeconomics.
No small thing because if one gets that wrong, one will get virtually everything important wrong.
Unfortunately, mainstream macro gets that wrong.
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MMT’s insight that all (federal) government spending is *necessarily* money-financed is a *major* departure from mainstream economics with significant policy implications.
Definitely not “known all along” or “just semantics.”
The bottom line is that all (federal) government spending is necessarily money-financed. That is not an MMT policy proposal. It’s a description of the mechanics of how it all works. 6/
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All the macro progressives really need — from Keynes.
“Anything we can actually do we can afford. Once done, it is there. Nothing can take it from us. We are immeasurably richer than our predecessors.”
Don’t ever allow anyone
to gaslight you different.
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Matching deficit spending with bond sales to give the *appearance of borrowing* means that trillion$ are piled on the national debt.
With huge interest payments funneled to the disproportionately wealthy *for generations*.
Rather than, say, addressing climate change.
Sensible?
The policy question is not “how to finance” the rapidly growing interest expense of the national debt?
Rather, whether the *current* policy of selling even *more* bonds and paying even *more* interest to the disproportionately wealthy makes sense?
I mean, how the hell could it?
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The most important myth of mainstream economics is that the US government borrows private sector savings to spend.
Overturning this toxic and pervasive myth is a necessary condition for adequately addressing climate change, reducing inequality, and eliminating poverty.
Period.
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No more destructive myth than the widespread, near-religious belief that the U.S. government borrows to spend.
And that this results in a burdensome national debt that undermines economic performance and growth.
A demonstrable lie and the “original sin” of mainstream economics.
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Utter bullshit. Obama wasn’t “forced into austerity.”
Read the 2010 SOTU. It’s all about reining in the deficit and debt — tightening the nation’s belt, like a household has to do.
He was pivoting to austerity after only one year in office. And you were right there with him.
After Republicans took the House in 2010, they forced Obama into years of austerity policies despite high unemployment. As soon as Trump was in, however, all that austerity came to an end (except for poor people) 2/
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Why don’t average Americans see the ~$34T national debt as savings?
It’s not THEIR savings.
If THEY owned ~$100,000 in US Treasuries (national debt per capita), would it be a “burden?”
Would ~$250/month in interest income be “unsustainable?”
A “fiscal crisis.”
Of course not.
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Great piece. Its bottom line:
“... that the US must borrow to finance spending . ... is a fundamental misunderstanding of government budgeting.”
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If so, we will lose. “Pay as you go” is a self-imposed, unnecessary, and counterproductive fiscal constraint, masquerading as “sound finance,” that renders progressive goals unattainable. The right gets this; about time the left does also. If not, there’s absolutely no hope.
"Democrats believe you must pay as you go," Pelosi says at Peterson fiscal summit
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No greater risk is posed to democracy and planet than the feel-good insistence that government public purpose spending must be “paid for” with politically infeasible taxes on the rich.
Literally paralyzing progressive policy and ushering in right-wing rule right before our eyes.
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Not an exaggeration to conclude that mainstream economics was wrong and MMT was right.
About everything: deficits, debt, interest rates, inflation.
You name it.
Unlike mainstream economics, MMT held from the beginning that the economy we have today was possible.
Just sayin’.
Looks like mainstream economics has been mostly wrong about nearly everything recently.
Whole lotta CYA gymnastic revisionism going on.
Looks like other folks have been mostly right about nearly everything.
Might make sense to be careful who you listen to, going forward, no?
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Great piece.
My cut: massive government spending will be required. IRA is just a beginning. The private sector simply will not make the necessary resource adjustments — with subsidies largely in the form of tax credits.
“Big Fiscal” will be mandatory.
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Mainstream economics claims the bonds comprising the national debt finance deficit spending.
Totally backwards.
The bonds are bought with dollars created by the *prior* act of spending. Literally.
So the bonds don’t finance the spending. The spending finances the bonds.
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How can you tell that an economist is “mainstream?”
They’re sure that budget surpluses are sustainable but budget deficits and public debt are not.
Say no to “mainstream.”
If you want to know why the Clinton surpluses were unsustainable and destined to reverse themselves, read this
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“The level of debt service in relation to GDP is just as irrelevant as the debt/GDP ratio. Adding a financial ’rule’ as a constraint on what now needs to be done, accomplishes nothing useful. And this one opens the door to pointless austerity later ...”
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Tell the mainstream.
Does the National Debt Matter?
@dandolfa
"it seems more accurate to view the national debt less as form of debt & more as a form of money in circulation."
"The idea of having to pay back money already in circulation makes little sense, in this context."
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The unnecessary, regressive, and costly, gold-standard-era policy of matching deficit spending with bond sales — to maintain an “appearance” of “borrowing” — is a political bazooka of austerity aimed at public purpose spending, including climate spending.
Demand that it stop!
The Stakes
*Back of Envelope Estimates*
Maintain the unnecessary, regressive, costly policy of matching deficit spending with bond sales:
By 2034:
National Debt > $50T
Annual Interest > $2T
Eliminate the policy:
National Debt < $20T
Annual Interest < $.5T
Important, no?
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That the US government is financially constrained in any way that limits its ability to address climate change, and thus must rely on taxing or borrowing private sector savings or wealth to do so, is the most abominable, essentially immoral, and fatal lie of mainstream economics.
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No, the coin would *not* simply be “a backdoor route to perfectly normal borrowing.”
Rather, it would make clear that bond issuance is unnecessary, and that government doesn’t “borrow” to spend.
In fact, resistance to the coin is driven by the fear that myth would be exposed.
The Fed can and would sterilize any impact on the monetary base by selling federal securities — so that in economic terms the coin would simply be a backdoor route to perfectly normal borrowing. Premium bonds a bit more complicated, but same bottom line 2/
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Close.
Bond sales don’t “neutralize” the economic impacts of the spending and money creation in any way. They just drain reserves to hit interest rate targets.
The key takeaway — whether you call it “borrowing” or not — is that the bond sales don’t finance deficit spending.
Oh dear. A better answer might be: "the government borrows in order to neutralise the impacts of its spending (money creation) activity on prices and to give the private sector the opportunity to hold government liabilities (money) at higher rates of interest, supporting saving."
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What needs to be eliminated is the toxic lie that the national debt (bonds outstanding) is government “borrowing” to spend, rather than an *optional policy* to manage interest rates.
And then cynically using that lie to block public purpose spending — from child care to climate.
I have come to the conclusion that government debt should be eliminated.
Government debt as defined by bonds outstanding that is.
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PSA
Selling bonds to match deficit spending is not “borrowing” from the private sector:
Buyers gladly swap dollars for highly liquid, interest-bearing assets. Give up NOTHING.
It’s an unnecessary GIFT — to bond buyers, that is.
Potentially MORE inflationary than not doing so!
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There are no “hard limits” to borrowing because the US government does *not* borrow to spend.
It’s a myth.
Either progressives educate themselves about this or public purpose spending is dead.
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Alarmed by daily reports of a national debt crisis?
It’s all a BIG lie.
The so-called crisis can be eliminated entirely simply by halting wasteful bond sales and interest payments to the wealthy.
And redirecting TRILLION$ over the next decade to meet the nation’s urgent needs.
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Did you know that Congress can avoid over $20T in national debt over the next decade simply by telling Treasury and Fed to STOP selling bonds and paying interest to the disproportionately wealthy?
Bet there are ways you’d prefer $20T be spent, no?
Be a good citizen.
Tell them.
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“Are you really saying it would make no difference at all tomorrow if we retired the whole national debt ... Are you really saying it would make no difference to the public discourse, to the policymaking process?”
The most important and consequential question in macroeconomics.
Jon Stewart Is Not a Monkey:
@StephanieKelton
@rohangrey
Jon Stewart: Money is fake, but debt is real?
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One day, hopefully, progressives will come to understand that their righteous but ignorant insistence that taxes be raised on the wealthy to “fund” progressive change dooms that very change.
It’s the legislative poison pill that allows the wealthy to slip the noose.
Every time.
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So bond sales to the wealthy provide the funds for government to deficit spend?
Really?
Bond sales merely debit electronic checking accounts of buyers.
How does that provide funds to spend?
IT DOESN’T!
Behold the “borrowing” myth behind the national debt.
Don’t fall for it.
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Must read:
“Political rhetoric that propounds the unsustainability of the national debt and the government's inability to finance its expenses is misleading and anti-democratic.”
An important contribution a recent House of Lords debate on the sustainability of the National Debt.
Brilliant work by
@GowerInitiative
researchers Neil Wilson, Andrew Berkeley and Richard Tye.
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To those progressives taken in by bullshit like “capitalist to my bones,” beware there are no market solutions to our major problems — climate, healthcare, inequality, monopoly. Relying on the market IS the problem. In all these cases the so-called “market” requires disruption.
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Why will national debt and yearly interest costs stand at more than $50T and $2.5T, respectively, in ten years?
Borrowing? Nope.
Because government sells bonds and pays interest to the wealthy to maintain an *appearance* of borrowing.
It really doesn’t borrow.
Make any sense?
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“Default and print some money?”
That’s MMT?
MMTers don’t know about and haven’t written about BOP constraints?
Sorry, this is as disgraceful a misrepresentation and smear of MMT as I’ve ever heard.
Totally unprofessional.
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@wbmosler
@StephanieKelton
If Krugman admits you, Kelton, and other MMTers are right, it would be an admission that he was embarrassingly wrong on the most consequential macroeconomic questions in his professional career.
He’s scrambling to save his own reputation — and the mainstream’s.
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“Researchers” at AEI and Hoover are paid to pull shit like this out of their ass.
File under: bullshit jobs.
Senior White House economic officials are studying a plan by researchers at AEI and Hoover that would allow Americans to get cash immediately im exchange for curbing their Social Security benefits, 2 ppl tell me
@jdawsey1
&
@John_Hudson
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Wrong.
Rising US debt is a problem ONLY for those who don’t understand that it’s just national savings.
Further, reducing income inequality, while eminently desirable, is neither necessary nor sufficient for limiting the US debt.
Which, of course, makes no sense to begin with.
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Rising US debt is indeed a problem, but the way to resolve it isn't by cutting back on government spending, and it certainly isn't by cutting back on government investment. The real way to resolve it is by reversing income inequality.
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And we didn’t do ANY of these things when in power because OUR leaders said we were broke. Or that we needed to identify “pay fors.” So what’s the lesson?
What we could do with $1.5 trillion:
-Make college tuition-free
-Provide universal preschool
-Repair our crumbling infrastructure
-Fund CHIP for 107 years
-Rebuild Puerto Rico
What Republicans did:
-Give tax breaks to the wealthy and corporations
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Larry and Janet say reducing deficits promotes investment.
But deficits increase the income, savings, financial assets, and profits of the private sector. Reducing deficits does the opposite.
How then could reducing deficits EVER promote investment?
Both are dangerous hacks.
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Or increase the deficit.
The worst thing about the imminent extinction of the human race via environmental cataclysm is, it may hurt the economy.
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Except from 2008 to 2016. The nation was “broke” then and had to “tighten its belt.” You know, when “yes we can” turned to “no we can’t.”
The most Biden quote ever, literally, not hyperbole (from the pool report last night in LA)
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@froomkin
@jonathanvswan
@anniekarni
There is no debt crisis. If you wrongfully assume there is, and argue about who’s to blame, you’re already debating on his terms.
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The most consequential and damaging example of zero-sum thinking is the mainstream Econ “principle” that government must tax or borrow *existing* savings to spend.
And the derivative belief that deficits and debt are bad — and to be minimized.
Economically debilitating.
Zero-sum thinking is a key mindset that shapes how we view the world. Excited to share a new paper on the roots and consequences of Zero-sum thinking with
@sahilchinoy
,
@DrNathanNunn
@SMGSequeira
. A summary thread🧵1/23
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This is also wrong.
It’s not semantics. It has huge policy implications — particularly for how deficits and national debt are understood.
Is national debt an “unsustainable fiscal crisis” resulting from “borrowing” to finance deficit spending — as the mainstream claims?
No!
So, while "mainstream" economists may not express themselves well on these subjects, especially in live interviews, it doesn't follow that there is a vast gap between the mainstream understanding of gov't funding options and MMTs supposedly distinct arguments.
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Suppose a large new federal program can be implemented by deficit spending alone (with no tax increases) without causing inflation.
Would you nevertheless require its proponents to identify tax increases to “pay for” the program, knowing that such taxes would be deflationary?
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“The sensible solution would be to accept that MMTers were correct, and that fiscal policy settings ultimately control inflation.”
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All you need to know about the “national debt” in a simple example:
🧵
Gov spends $100 (G)
Non-gov sector now has $100
Gov taxes $90 (T)
(G-T) = gov deficit = $10
Deficit has added $10 to non-gov
Treasury sells $10 gov bonds
Non-gov swaps $10 for $10 bonds
NET RESULT: $10 increase in net financial assets to the non-gov sector (w/ or w/o bonds) 1/
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Why not just say the government should deficit spend? Or do you have something else in mind?
Be clear. Are you saying we should attract private sector funds for infrastructure?
Or deficit spend, creating money, income, savings, bonds, and infrastructure?
Inquiring minds ...
These low, low rates are telling us several things: (a) private investment demand is really weak despite tax cuts (b) recession risks are pretty high (c) infrastructure! I mean, with borrowing virtually free, why not fix all those falling-down bridges? 2/
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“Even the Treasury has declared the public debt burden unsustainable. … To remedy that would require fiscal consolidation, meaning debt reduction.”
No it wouldn’t.
Tell Yellen to stop selling bonds and paying interest to the wealthy.
Problem solved.
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Selling bonds and paying interest to the rich, like Jamie and his firm, is the *source* of the national debt.
Not “borrowing.”
Stopping that could cut the national debt and interest costs by trillions of dollars.
Without spending or taxing a dime.
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Selling bonds and paying interest to the rich is the *source* of the national debt.
Stopping both could lower the national debt by TENS OF TRILLION$ over ten years.
Cutting interest costs (increasing fiscal space) by TRILLION$.
Should be in the national policy discussion, no?
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Is there a national debt crisis?
Absolutely.
Lies pumped by Treasury, Fed, CEOs, political operatives, and MSM — sourced to mainstream economics — have misled 10s of millions of Americans to misbelieve that one exists.
Undermining trust in the economy, government, and nation.
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Then stop selling bonds and paying interest to people who already have money.
US Treasury confirms spending on debt interest now larger than entire Defense Budget.... and will soon surpass entire Social Security budget
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Jerome Powell: “It’s probably time, or past time, to get back to an adult conversation among elected officials about getting the federal government back on a sustainable fiscal path.”
Translation: Time to crank up the lies about the national debt burdening their grandchildren.
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Let’s be clear:
Wrongly insisting that government borrows to finance deficit spending fuels lies that national debt is “unsustainable” and the economy is in “fiscal crisis.”
MMT‘s insight that government does not borrow to spend is the “adult conversation” rejecting such lies.
Slow your roll, pal.
Insisting that borrowing finances deficit spending *undermines* employment, growth, labor markets, and productivity.
MMT‘s insight that government doesn’t borrow to deficit spend *supports* employment, growth, labor markets, and productivity.
So cool it.
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“To stabilize debt implies getting the primary deficit to zero. Not today, but at some point in the not too distant future. There is no alternative.”
Pure nonsense.
4. At the same time, we also have high public debt, and a large primary deficit. To stabilize debt implies getting the primary deficit to zero. Not today, but at some point in the not too distant future. There is no alternative. Let's not cheat ourselves in believing otherwise.
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“ ... pay-fors are appealing for those who worry about the budget deficit, but in practice, they could keep the recovery from reaching its full potential, Krugman said.“
File under: No shit, ex lax.
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To avoid inflation, a government of a “full employment” economy with deteriorating infrastructure on a burning planet can’t spend on either if it can’t get the money from the rich?
Can’t “pay for” anything the same way we’ve “paid for” for everything?
Is that the Dem message?
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“According to the standard picture of public expenditure and revenue raising, governments can only spend if they first gather money through taxes or asset sales or borrowing. The reality, however, is … governments spend it into existence.”
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@ZaidJilani
Get serious. Sanders was proposing large-scale progressive change when Warren was still a Republican.
I mean, one can rationally support either of them but you’re just pushing nonsense. What the hell is wrong with you?
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“Consider just how often mainstream economists get things wrong – not only small things, but very big ones. … The misdiagnosis of inflation in 2021-22 was merely the latest episode in a long-running series of failures.”
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Why would anyone in their right mind call the stock of U.S. Treasuries in portfolios of everyone from your grandmother to your pension fund as a “burden on your grandchildren?”
Or a “fiscal crisis?”
This is ignorance, incompetence, or bad intention at a most destructive level.
There is “something wrong with” the entire disingenuous narrative now being pushed by Powell and Yellen.
That today’s robust economy masks a “fiscal crisis” that requires immediate “consolidation” — meaning spending cuts.
This is austerity — pure and simple.
Don’t fall for it.
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The “economics of government finance” must begin with an accurate description of how government actually spends.
Accounting and flow of funds analysis show unequivocally that government can spend *only* by creating money.
Seems pretty important.
Hardly “language games.”
At the end of the day, I'm not sure how the "taxes do not fund spending" view helps us understand the *economics* of govt finance. The language games being played here (on all sides) are serving another purpose.
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Bottom Line:
To stop the national debt and interest from doubling in a decade, there’s a simple policy choice:
Drastically cut government spending on everything from child care to climate change
or
Stop selling bonds and paying interest to the already wealthy.
Easy call, no?
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The claim that the national debt isn’t too large now, but could be in the future, is a policy trap for progressives.
It assumes wrongly that the national debt results from borrowing.
It doesn’t.
It results from issuing bonds to people who already have money.
Maybe stop that!
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