Tuesday, April 5, 2011
Paul Ryan's absurd "Path to Prosperity"
Proponents of MMT are well versed in the concept of sectoral balances, which states that the sum of government financial balances plus non-governmental financial balances (domestic and foreign) must equal zero.
Sectoral balances explain why, when the government runs a deficit, the non-government runs a surplus equal to the size of the government's deficit to the penny.
This is tautology, not theory.
Now here comes Paul Ryan, the new GOP hatchet man, who proclaims that he is going to put America back on a "Path to Prosperity," by cutting $6 trillion out of the Federal Budget over the next 10 years.
Anyone with even a casual understanding of sectoral balances (like, if you read the first paragraph of this post), would instantly be able to understand, when armed with a little 1st grade arithmetic, that the people of this country (and many foreigners) are about to be relieved of $6 trillion in wealth and savings.
How that adds up to a path to prosperity in any way other than some warped idea of prosperity in Ryan's mind, is a mystery to me.
Outside of Ryan's mind, it is a path to poverty and dystopia.