tag:blogger.com,1999:blog-2761684730989137546.post2382332506276919485..comments2024-03-29T02:19:19.866-04:00Comments on Mike Norman Economics: Steve Cecchetti and Kim Schoenholtz — A Primer on Helicopter Moneymike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2761684730989137546.post-53351670160396537302016-06-29T13:46:22.581-04:002016-06-29T13:46:22.581-04:00Even in technical articles such as this one the id...Even in technical articles such as this one the ideological bias shows.<br /><br />The authors write:<br /><br /><i> since the Treasury has spent its deposit at the central bank, something has to balance the bond that it issued. Assuming that the government operates within its long-term budget constraint—which it must do to remain solvent—the natural candidate is the present value of future tax revenues. </i><br /><br />Well, this is simply wrong. Suppose the government (Treasury) buys a bridge by spending its deposit at the Central Bank. On the Asset side of its balance sheet a deposit at the central bank is replaced by a Fixed Asset (a bridge) not by "the present value of future tax revenues".<br /><br />Many more points on this article could be criticized, but this one is a particularly glaring instance of ideological blinkers related to the "solvency constraint" obsession.Jose Guilhermehttps://www.blogger.com/profile/00313496015841693181noreply@blogger.com