–Talk by James K. Galbraith

The debt hawks are to economics as the creationists are to biology.

I strongly recommend this short piece: DEFICITS ON THE BRAIN

It addresses President Obama’s phony, completely useless, politically motivated Commission on Deficit Reduction

Rodger Malcolm Mitchell

No nation can tax itself into prosperity

2 thoughts on “–Talk by James K. Galbraith

  1. I have to admit I still get confused by the “check writing” “treasury bond”, etc., etc.

    So the government pays Xe for some stormtroopers and writes Xe a check. Xe then deposits the government check in the bank. Doesn’t the bank now have more money? Why is it implied that the bank “must” also earn interest by likewise buying a treasury bond? Why can’t it go out in the real world and invest that money? Or is it through the purchase of government treasuries that reduces money supply (or at least keeps it from “working”) and thus keeps inflation in check? (Sorry, I know this basic stuff.)


  2. The banks can go out in the real world and invest. However, since banks pay the government less than 1% and can earn more than 1% by buying government bonds, at absolutely zero risk, that is the preferred investment.

    The purchase of T-securities neither increases nor decreases the supply of money, although the creation of T-securities increases the money supply.

    Professor Galbraith’s comments can be summarized: “There is no evidence the federal deficit is an economic problem of any kind, so why have you, Mr. President, created a committee with the express assignment to reduce the deficit? Why are you, Mr. President, making an assumption without evidence?”

    Despite this challenge, you never will see evidence produced, simply because there is none.

    Rodger Malcolm Mitchell


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