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Lefty Thinker

(96 posts)
1. Why we are listening to Wall Street instead of Bill Mitchell
Wed Nov 14, 2012, 02:28 PM
Nov 2012

comes down, I suppose, to who can donate the big bucks to the political campaigns. It's really too bad what Wall Street claims to want is going to sink our country and they'll get it because the money is there and the American people are not smart enough to recognize straw men and false equivalencies (please, America, prove me wrong!).

We are not Greece (we have currency sovereignty). We are not Weimar Germany (we have no debts denominated in foreign currency or commodities). We have no operational risk of governmental bankruptcy (since Congress can at any time coin new money). Public debt does not "crowd out" private borrowing (the net expenditure by the government widens the pool before soaking up some of the dollars) and isn't necessary, anyway (since Congress can at any time coin new money). All of the financial bogeymen the need-a-crisis press likes to write about simply are not real.

We need to make sure that any member of Congress who invokes any of these bogeymen is confronted. We need to get these concepts out in the media, to friends and family. The more people who can critically evaluate the country's financial situation, the better. Bill Mitchell's blog is a great place to start.

P.S. Public debt measures private wealth (savings over all time) plus net imports over all time (at least when the government borrows all net spending as ours has/is), so getting rid of the debt (not deficit) means either a tremendous increase in exports (not bad, but not under the government's control), a dramatic decrease in private wealth, or a move to net spending without corresponding borrowing. Each has it's own side-effects, and they can be mixed and matched. We should be realistic about what we are trying to accomplish.

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