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View Diary: Why deficits don't matter - the reality of government finance (116 comments)

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  •  This diary is MMT -- Modern Monetary Theory.... (3+ / 0-)
    Recommended by:
    jellyyork, LilithGardener, psyched

    an economic school which 1) describes our current monetary and national accounting realities and 2) thinks about the policy implications of those realities.

    The main reality is that we are no longer on the gold standard.  We now have a fiat monetary system.  The US, being sovereign of it's money cannot go broke, and thus has a broad range of policy options -- cuz it can afford to do anything, though doing some things are smart while doing other things are stupid.

    In other words, money is never in short supply for the federal government.

    Occupy needs to learn this lesson very, very well.

    •  I've always thought the idea (0+ / 0-)

      that the US could default on its debt ridiculous.  The US dollar is the world's reserve currency. Do people really think there is a viable alternative for a currency standard? For all the hope in the Euro, it's not going to replace the dollar any time soon.

      They are not a sovereign entity, can't raise taxes for example...

      Thank you for the explanation.

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