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

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  •  Household balance sheets are critical (3+ / 0-)
    Recommended by:
    Roger Fox, katiec, psyched

    A FRED graph highlighted by Art Shipman shows the relationship over the last 50 years of the "stuff we value as dollars" to the "money we have to spend"

    It clearly shows the impact of the "dot com bubble" and the "real estate bubble" and their collapses. But it should be noted that these "castles in the air" were built on borrowed money (bank credit) as opposed to real money (government created money) and they collapsed when the bills came due ( this is primarily because paper valuation of assets is not the same as their true realizable cash value)

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