, 12 tweets, 3 min read Read on Twitter
1. People need to understand issues of the economy. We are witnessing the most grotesque prevision of Keynesianism in history, with GOPrs pretending all is being driven by supply side economics. The reality: We are floating on air, and the landing is going to be horrific....
2...ive long known that the GOP is fiscally irresponsible, but never understood if it is because they are stupid or just willing to do anything for rich people. Truth is, given what they have done, it does not matter anymore.

A low, low lesson in Keynesianism: The government...
3...utilizes fiscal policy to deal with inevitable ebbs and flows in the economy. When an economy is struggling, the government is supposed to cut taxes and raise spending - increasing deficits to flood the economy with cash. That helps push transactions and has a multiplier...
4...wealth effect. (On monetary policy, the Fed is supposed to lower rates - if it is not stagflation - to decrease the cost of money.) Those lead to economic recovery.

On the flip side, when the economy is strong, government is supposed to offset the debt accumulated...
5...during the recovery by increasing taxes and lowering spending. If that starts to kick inflation up, then the fed comes in and raises rates.

This is simple, commonsense fiscal management: Borrow and spend when things are bad, recoup that debt when things are good.

The GOP..
6...has done the exact opposite. Everything we are seeing in this economy right now is just being bolstered up by the perversion of Keynesianism.

In a strong economy, we cut taxes and increased spending. It is like spraying the fire extinguisher into the pool. Yes, it will...
7...create more liquid, but it is all being wasted for current interests. But when the house is on fire - when the economy falls, as it must - there is nothing left in the extinguisher. Deficits will explode unlike anything we have ever seen. We cannot raise taxes/cut spending...
8...in a bad recession, because that will push us off the cliff and into depression. So our borrowings will have to go through the roof. Borrowers might panic - we will be filling up our annual budget with more and more interest on the debt, crowding out other expenditures -...
9...and we will have to convince them that yes, we will keep paying interest. If a democrat is in office then, the GOPrs will start saying "oh, what difference does it make if we default" just like they did last time.

To fully understand the recklessness of the GOP....
10...not only did they cut taxes and raise spending in a booming economy, BUT trump has been demanding that the fed also cut rates in a booming economy. They refused, thank god, but finally started cutting when they saw the recession peeking over the horizon....
11..the bottom line: This is not an economy - this is a market manipulation. We are living on borrowed money, feeling fat and happy when we should be using this moment to keep the deficit going down, as Obama did, and not explode it beyond comprehension....
12...we live on credit cards, thinking we're rich. When the bill comes due - when the bottom drops out of a economy manipulated through perverted Keynesianism - we'll learn the consequences of this profligacy.

And all the GOP will care about then is saying "it's the dems fault!"
Missing some Tweet in this thread?
You can try to force a refresh.

Like this thread? Get email updates or save it to PDF!

Subscribe to Kurt Eichenwald
Profile picture

Get real-time email alerts when new unrolls are available from this author!

This content may be removed anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

Follow Us on Twitter!

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just three indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3.00/month or $30.00/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!