Thread by @wgoggin

What to think about mainstream economists who warned against the dangers of deficits and debt now proposing adding trillions of dollars to each because infrastructure “pays for itself?”

Something stinks in mainstream Econ. Don’t fall for the “this time it’s different” bullshit.

Same goes for “financing” a GND. Throughout the decades that mainstream Econ vilified deficits & debt, it ALWAYS made sense to deficit spend (& increase public debt) for infrastructure and climate change. As well as ALL public purpose spending.

The fear mongering was ALWAYS BS.

The last vestige of mainstream Econ bullshit is that doing so requires “borrowing” private sector funds. So “the debt” might still be used in the future as a cudgel to thwart other public purpose spending.

But the spending doesn’t require borrowing private sector funds AT ALL.

Having 50% relented on the maxim that government must tax or borrow to spend — “well we don’t have to tax THIS time” — the mainstream hat is now hung on “borrowing” private savings.

But gov doesn’t use private sector savings when it deficit spends — which provides those savings.

While all support for a GND is welcome, imp to distinguish b/w mainstream old guard who say we should now borrow (and spend) private sector savings to do so, and those who understand that government need not do so at all.

The former remain a problem. The latter are the solution.

How can those who insist that existing private sector savings must finance infrastructure or GND be a problem?

They insist on complex inefficient structures and mechanisms to “attract” private sector savings — such as infrastructure banks and other public-private “partnerships.”

Virtually all such schemes wind up unnecessarily subsidizing the already well-to-do and exacerbating income and wealth inequality.

Far better to recognize that government can spend directly for infrastructure and GND w/o the false “pay for” and “ROI on investment” framework.