Ignoring the economic aspect (with which I disagree), there’s also a huge political problem with this: it allows and facilitates undisciplined budgeting such as the recent huge corporate tax cut during a period of growth. My view is that deficit spending is appropriate during downturns but during periods of growth we should work towards a balanced budget. I do agree that we don’t need to actually pay the debt down unless it is truly huge, and allow periods of growth to reduce the debt in relative terms, but constant deficits are not good policy, on multiple levels.
Lots of people feel this way, but there just isn’t any evidence that constant deficits are a problem for countries that can borrow in a currency they control at low rates of interest with reasonable debt levels. We can quibble about what reasonable levels are, but it’s hard to look at any chart of government debt for the US in the postwar period and point to any adverse national or economic impact from that debt.
The real potential for impact is with the cost of the interest and how that hamstrings federal spending, but I can’t look at this chart and feel any panic.
Printing money to pay for deficit spending is essentially just taxing the wealth of everyone through inflation.
It’s basically just lazy, cowardly governance. If you balance the budget through appropriate taxation, you can achieve the same result, but actually direct where that money is coming from rather than just devaluing the currency for everyone.
Everyone talking about deficit spending and printing money and so on, go listen to this. Save us all a lot of typing.
The Fed controls interest rates by buying and selling bonds on the open market. When it buys bonds, it simply voids bonds digitally and digitally credits the buyer’s Federal Reserve account with dollars. Those dollars are magicked into existence.
When a bank issues a loan for a mortgage, it’s only required to retain some small percentage of its total deposit liabilities to issue the loan. Both the deposit and the loan are money in the economy, thus banks create money every time they do this. In fact, this is the primary way money enters the economy, federal deficit spending is small potatoes next to it.
Modest inflation is necessary to keep the economy chugging. It’s like a string that pulls everything along. If we had deflation, people would start putting money under mattresses, credit would dry up, and the economy would ground to a halt. Inflation is not taxation–they have quite different economic effects.
Sensible governance requires an understanding of the economic effects of fiscal and monetary policy. Balancing the budget may be sensible, but doing it through taxation just because is naive.
I might be able to drum up some sympathy for this idea if anyone could point to any government being ‘well run’ along those lines, e.g. nearly always functioning on a balanced budget, never having any inflation, with a well-off populace.
Deficit spending isn’t “printing money” any more than I “print money” when I use a credit card. Government debt is finance, just like personal and corporate debt. The real danger is not inflation, but crowding out private investment.
Indeed, the very fact that Trump has had to lie relentlessly about the caravan’s makeup — he has claimed it is infiltrated by criminals and terrorists, which is utterly false — itself neatly illustrates that it does not present the emergency he and Republicans have hyped into existence. The backdrop to this is an even bigger lie — Trump’s constant suggestion that the border is overrun by undocumented immigrant invaders. In fact, illegal crossings are substantially lower than the levels in recent years.
To turn this fake emergency into fodder for a closing campaign message, Trump and Republicans have layered additional lies on top of all those other ones: Democrats orchestrated the caravan; Democrats want to give undocumented immigrants cars and support open borders; and so on.
Trump is also set to send 1,000 troops to the border, so that in the election’s final days, the airwaves are saturated with split screen imagery: On one side, massive dark hordes making their way toward the United States. On the other, American military might marshaled by Trump to protect voters from that menace — a danger Democrats will not protect you from, because they secretly want those hordes to cross the border.
This is Trump’s Reichstag fire. Not in the sense that Trump is Hitler, but rather in the more general way this term is sometimes used: Trump is perverting imagery of a real event to create a false narrative about what is happening and why; to justify his chosen response to it; and to manipulate public opinion toward other ends. But the caravan’s existence, and Trump’s response to it, actually reveal that on his signature issue, he’s failing.
This. And if European politics of the last few years has taught me anything, it’s that it will work.
1000 troops?
When do we annex Mexico?
Aren’t we supposed to be building a wall or something to fix all this?
It will never cease to make the mind wonder how people can get so riled up over immigrants, unarmed, and not even close to our border.
Moreover, the author completely and utterly misses the point that Trump doesn’t actually care about it except to the extent that it gets him attention. The author says Trump is failing in an effort to feel better about themselves when the article clearly establishes he is getting exactly what he wants.
14,000.
For 1,000 refugees 2 months away.
More than we have in Afghanistan.
It’s an utterly excessive show they have to put on for the low-info White Supremacist a-holes they need to gin up to get them to vote in the midterms.
“Heading towards a courthouse”
They’re like… a 1000 miles away. That’s akin to me walking East out of my house and saying I’m walking to the Empire State Building.
That’s the part you found implausible?
I mean, it’s Yglesias. I just took the first angle.
To be honest my eyes glazed over past first moronic words.
It could have been a joke, but if it was Yglesias needs to remember his “serious” shit sounds exactly as stupid most of the time.