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Thursday, November 11, 2021

Are Concerns over Growing Federal Government Debt Misplaced? — L. Randall Wray

If the global financial crisis (GFC) of the mid-to-late 2000s and the COVID crisis of the past couple of years have taught us anything, it is that Uncle Sam cannot run out of money. During the GFC, the Federal Reserve lent and spent over $29 trillion to bail out the world’s financial system,[1] and then trillions more in various rounds of “unconventional” monetary policy known as quantitative easing.[2] During the COVID crisis, the Treasury has (so far) cut checks totaling approximately $5 trillion, often dubbed stimulus. Since the Fed is the Treasury’s bank, all of these payments ran through it—with the Fed clearing the checks by crediting private bank reserves.[3] As former Chairman Ben Bernanke explained to Congress, the Fed uses computers and keystrokes that are limited only by Congress’s willingness to budget for Treasury spending, and the Fed’s willingness to buy assets or lend against them[4]—perhaps to infinity and beyond. Let’s put both affordability and solvency concerns to rest: the question is never whether Uncle Sam can spend more, but should he spend more.[5]…
Multiplier Effect
Are Concerns over Growing Federal Government Debt Misplaced?
L. Randall Wray | Professor of Economics, Bard College
https://multiplier-effect.org/are-concerns-over-growing-federal-government-debt-misplaced/

5 comments:

  1. “ the question is never whether Uncle Sam can spend more, but should he spend more.”

    lol that is the question the GOP is asking…

    ReplyDelete
  2. Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders."

    https://www.etsy.com/listing/510225080/signed-print-of-my-new-yorker-cartoon

    ReplyDelete
  3. Yo, You’re doing the opposite of what the MMT people are saying to do.. you are looking at the financial(abstractions) and not the real…

    ReplyDelete
  4. Not the real what .... value? Do enlighten us Franko!

    ReplyDelete
  5. The planet is not destroyed … you are looking at unequal financial (abstract) positions that annoy you and in response you are believing the planet is destroyed…

    The planet is not destroyed it has never been better..,

    ReplyDelete