Tackling the Myth of the Big Bad Deficit

Firstly, thank you for all the work that you do. I haven't missed an episode of Economic Update in over two years and look forward to it every week. During much of this time I was hoping you might walk listeners through what I consider one of the biggest canards of conservative economics, namely that deficit spending and national debt is bad. After all, most people are very familiar with debt as a bane of life, knowing that if they acquire too much of it or don't pay it off, terrible consequences ensue. Most people don't realize that - for the American government - debt is not like the debt of a household or a business, mostly because unlike those bodies, the American government can print its own money. And while that doesn't mean it can go crazy and print all the money to satisfy everyone's wants and needs, it does mean that different rules apply, and that deficit spending is actually quite desirable, leading directly to private wealth. However conservative economists consistently and passionately make the case that the growth of the debt is some monster, and that its growth threatens our future, and that it necessitates drastic cuts in spending to spare us from the supposed (but never realized) horrors of national debt. I would greatly appreciate if you could use the megaphone of your program to talk about this in some detail. Perhaps you could find an economist who specializes in modern monetary theory to have as a guest and explain not only how money works at the federal level, but also the political implications and consequences of "fiscal responsibility" and how they have historically been used to ensure the mass of people believe that things like universal education or healthcare are "unaffordable."

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  • Farzad Mozafarzadeh
    published this page in Ask Prof. Wolff 2016-11-30 16:14:07 -0500