Winterspeak agrees with Paul Krugman's column, The Unwisdom of Elites, and then explains why Krugman is one of the economic and academic elite responsible in the first place. As usual Winterspeak sums it up in his characteristically pithy way within the MMT paradigm.
Hint: It's in the sectoral balances, and the economic elite doesn't get this because they don't understand accounting.
"THERE IS NO FINANCIAL CRISIS SO DEEP THAT A SUFFICIENTLY LARGE TAX CUT OR SPENDING INCREASE CANNOT DEAL WITH IT"
ReplyDeleteYou have this in reverse there are no large spending increase that did not create a financial crisis. Increasing Government spending does not create aggregate long term demand. It's a mirage that will end very soon or create a worst crisis.
Read Hyman Minsky on financial instability. Financial instability arises not from government but from private abuse of leverage owing to lax credit. If government has a role, it is in lax regulation of leverage.
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