By Joe Firestone
The word “deficit,” when applied to the Government financial accounting of a monetarily sovereign nation, that is, one that issues a non-convertible fiat currency, with a floating exchange rate, and no debts in a currency it doesn’t issue, is a problem, because the label “deficit” when applied to such a Government doesn’t mean what most people think it means. As Michel Hoexter points out:
Posted in Joe Firestone
Tagged deficit, michael hoexter, MMT, modern money theory, national debt, net contribution, net financial assets, savings, surplus, the addition, the destruction, the national credit, the national depletion
By Michael Hoexter
The economic ideology of fiscal austerity, i.e. cutting government spending as a virtue in itself, which threatens to tear apart civilization as we know it, has been sweeping through elites and right-wing groups in America and Europe. The nominal center and Left in a number of countries are also “infected” with the “mind virus” of fiscal austerity and budget deficit phobia. Almost every pro-social initiative that is instituted by government or relies on government funding is endangered by the onward march of this false view of how modern, large-scale economies function. The mental state and/or group hysteria associated with fiscal austerity has caused leaders to ignore 70 years of economic wisdom as well as the obvious empirical evidence surrounding us that their collective austerity mania is leading to economic and physical damage to the vast majority of people in numerous societies. The recent electoral victory of the French Socialist, Francois Hollande, thought to be an opponent of austerity, may lead to a temporary break in the political and technocratic front in favor of austerity but the battle is not yet won. Hollande’s support for “anti-austerity” does not seem to be principled and backed by a complete counter-theory to austerian madness.