Cullen Roche 12/30/2012 at 9:26 PM
Almost all economists don’t understand banking and don’t include it in their models.
Really…I mean really?
So, they have no idea what deficit spending even is.
Deficit spending is always a redistribution of existing bank money. When the govt taxes it takes from Peter to pay Paul. When the govt deficit spends it sells a bond to Peter to Pay Paul with Peter’s money.
That is simply a ‘description’ of how the government facilitates deficit spending, it does not actually tell you in economic terms what deficit spending actually is.
Deficit spending is spending in excess of real produced goods and services in the economy. It [deficit spending] requires that someone loan to you extra real goods/services, or you expropriate those extra goods and services.
Cullen is watching the shells be manipulated by the con man.
The difference is that deficit spending results in a net financial asset in the bond whereas taxation just results in the spending.
Nonsense. Deficit spending results in the gradual erosion of capital in an economy, which is exactly what is happening in the US and other economies currently.
This isn’t terribly complex so I am kind of stunned that it took the creation of MR to explain that this is how the process works. But it’s not surprising that economists, who don’t understand banking, wouldn’t get this
If you’re going to be arrogant, at least have the good form to be correct. There is nothing sadder than the arrogant fool.