On Belief that spending occurs from taxing, and public saving (i.e., "deficit spending") from borrowing. First is directly false but indirectly true (the tax-credit must be created; no 1:1 ratio tho). The second is completely false. 1/4
Indirect argument heard against "deficits": that either taxes will rise in future or inflation act as a tax.
Neither holds as long as 1) there are ongoing savings desires, which there always will be and 2) spending doesn't surpass (desired) available real resources. 2/4
Neither holds as long as 1) there are ongoing savings desires, which there always will be and 2) spending doesn't surpass (desired) available real resources. 2/4
Simplistic inflation caricatures ignore 1) bad finance regulation 2) useful supply signals (e.g., we should have let energy costs cause innovation in 70s rather than allow Volcker to tank the economy w absurd monetary policy bc "iNflaTion")... 3/4
...3) perverse effects of monetary policy 4) lack of influence in gov by reality-based economists with sectoral expertise, who understand effects of spending preemptively, advise 4/4
(not to mention that the good economy crowding in causes also means more real resources and higher real wages; fixation on long term price levels misses the more important facts)
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