Many economists (perhaps even those who agree with us) refuse to talk about the national debt and government deficits the way we do on this blog. Instead of boldly challenging the assertion that the U.S. faces a long-run debt (or deficit) problem, headline progressives typically do what Jared Bernstein did in his column today — i.e. they pay “obligatory” tribute to the Balanced Budget Gods, thereby reinforcing the case for austerity at some point in the not-so-distant future when we will be forced to to deal with this very bad thing called the government deficit. Followers of my work here and on Twitter know that I refuse to pay homage to the Balanced Budget Gods. Instead, I prefer to shift the burden of proof onto those who contend that the U.S. faces a long-term debt or deficit problem. The first step is to establish that solvency can never be an issue for a government that spends, taxes and borrows in its own (non-convertible) currency. The following quote from the St. Louis Federal Reserve usually does the trick, but this great confession from Alan Greenspan also helps.
Listen to Our Podcast- Randy Wray on Krugman and the Frustration of the Heterodox April 28, 2014
- Fred Lee Talks About his Contributions to Heterodox Economics April 18, 2014
- Feb. 27 Podcast with Randy Wray February 27, 2014
- Bill Black and Randy Wray October 21, 2013
- Political Theatre and the Government Shutdown October 2, 2013
- Randy Wray: The Taper, the Debt Ceiling and the Prospects for Growth September 23, 2013
- Stephanie Kelton Talks with Warren Mosler September 4, 2013
Recommended Reading
Click images to view details
Subscribe
