You can't balance the budget by raising taxes and cutting spending. Reducing the government's deficit also reduces the non-government's holdings of dollars. And since the non-government needs dollars to pay taxes, it will always find a way to run a surplus with the government (by selling its products, services or labor). That means the government will always pretty much run a deficit. When it doesn't it forces the non-government into liquidation. That's why extended periods of budget balance or surplus (1920s, 1997-2000) have always preceded economic crashes. This entire fixation about deficit reduction is idiotic. It displays a complete ignorance of our monetary system.
7 comments:
I agree!
I heard a discussion on Bloombert this morning about a new book (by Amity Shlaes, I believe) on Calvin Coolidge. The interviewer and interviewee, in discussion of the 1920s and ensuing depression, missed fiscal deficit connection. Of course, it's 180 degrees opposite from the conventional wisdom...
Shlaes actually thinks that we would be well advised to emulate Coolidge's fiscal rectitude. From a Forbes review of her book:
Coolidge never abandoned his skepticism of the effectiveness and propriety of government action that had guided his actions as president. Even in the wake of the stock market crash following his term in office, Coolidge persisted in his “considerable doubt” that the “national government can interpose” to prevent or ameliorate the crisis. He would doubtless see the Dodd-Frank Act of 2010 as another desperately flawed exercise in futility...
Maintaining control over government spending required both diligent attention to detail and courageous resistance to the politically expedient expansion of the reach of government. Coolidge, for instance, resisted demands to expand government support for veterans because he recognized that the precedent could become boundless. The various entitlement programs that now jeopardize our long-run fiscal health would likely be less threatening had the generations of politicians since Coolidge heeded his style of budget discipline and vigilance.
The above was a quote from the Forbes review. "blockquote" doesn't work here...
Shlaes is a mindless adherent to the neoliberal view. I cannot stomach her.
It's the AmityShlaes Horror!
"It's the AmityShlaes Horror!"
True Mike, :)
and it's a ribboting!
over in the UK, they're left with the Blair Twitch saga, and they're actually camerswooning over the sequel
Who could possibly retchit it up another level. How do you top a bottom? It's not that the emperor has no brains, the courtiers have their heads up their arses looking for fiscal rectaltude.
It's beyond brown nosing. Guess that's how one tops a bottom.
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