Post-Keynesian Observations

Understanding the Macroeconomy

And shut up about the budget deficit!!!

with 2 comments


For crying out loud, there is simply no way to increase the level of economic activity at present without increasing the national debt. “Oh, no, what about our grandchildren?!?!?!” To whom do you think we owe the majority of this money?! 70% is owed to Americans, and of that over half is owed to the Federal Government. Furthermore, US debt is an extremely safe form in which to save, and at any given time there are trillions of dollars worth of saving worldwide. My point is that while each particularly treasury bill must be repaid, there is simply not now or ever any reason for the us to reduce the national debt to zero. Ever. People want to save, and US debt is a popular means by which to do so.

So a) trying to reduce the budget deficit in the midst of a deep recession is idiotic, b) it’s not like the national debt has to be reduced to zero at some point (far from it, in fact it’s been much larger as a percent of GDP), and c) even if we did have to do that, 70% of the money just goes to other Americans.

Sorry for my tone, but we are in desperate times and the sort of economic ignorance that I keep seeing labeled as “analysis” scares/annoys the hell out of me. It’s scaremongering and it’s liable to make things much worse.

Written by rommeldak

May 20, 2009 at 6:55 am

Posted in Uncategorized

Tagged with ,

2 Responses

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  1. I agree with your sentiments, and in particular I think we need to be very concerned with how all main stream media, and much semi-underground media presents and deals with both economic and science reporting. Short, innacurate, salacious, and sensational is the order of the day. Information is not cool; fright factor is.

    You, dear Rommski, have the potential to play an important role in informing the uninformed — and that includes me!


    May 22, 2009 at 7:56 pm

  2. Are you saying the deficit needs to explode in order to stimulate the economy?

    Charles Flemming

    June 9, 2009 at 9:28 pm

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