The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
To cope with its tsunami problems, the Japanese government will be forced into massive spending. This will increase Japan’s debt/GDP ratio from its current 200%. That ratio could reach 300%, 400%, 1,000% — who knows how high.
The results will be:
–On-line “debt clocks” madly will tick ominous warnings.
–John Boehner and the Tea Party, who have no understanding of Monetary Sovereignty, will tell everyone Japan is “broke,” just as they have been telling everyone the U.S. is “broke.”
–If Japan does not have a debt ceiling, some in their government will insist they institute one, to prove they know as little about economics as U.S. politicians.
–The Japanese economy will recover.
–Sometime in the very distant future, Paul Krugman, Charles Krauthammer, Barry Rithholtz, Robert Samuelson, Stephen Gandel, Joseph Stiglitz and the editors of the Wall Street Journal will proclaim they always knew federal deficit spending was necessary for a growing economy, and that, in 2011, the so-called “debt” really was not too high.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth.