Skip to main content

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

Comment Preferences

  •  Yes, he is (2+ / 0-)
    Recommended by:
    katiec, psyched

    But MMT people have published a huge number of posts on the phoney fiscal cliff crisis for some time now. You can find some of them on the Money and Public Purpose blog I've linked to above. We've been warning about it for months and months.

    Krugman's latest post approaches the MMT line of reasoning very closely, in certain respects. But he wouldn't agree with us about what to do in the longer run. What that means is that he gives away too much to Peter Peterson and the other fix the debt people, by being unable to deny that they have a legitimate concern about the debt-to-GDP ratio. We just say that doesn't matter a damn. Past deficits and accumulated debts have nothing to do with current fiscal capacity if you have a sovereign fiat currency like the US.

    So, in any year, you go ahead with fiscal policy that will provide the best outcomes for full employment, price stability, and other valued outcomes.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site