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View Diary: How to be the Smartest Guy in the Room (154 comments)

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  •  As the economy improves, deficit spending should (1+ / 0-)
    Recommended by:
    Pluto

    fall, reducing the amount of money in circulation.

    Deficit spending increases money supply circulating.

    Reducing deficit spending during a recession could crash the economy, because basically, only the Federal government can deficit spend.  States - most all of them - have constitutional requirements to have a balanced budget.

    With better economy, better employment, higher demand for goods and services, tax revenues rise (unless an idiot like George W Bush cuts taxes) and deficit spending decreases (or should if politicians have any sense).

    "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

    by YucatanMan on Mon Mar 04, 2013 at 10:27:20 AM PST

    [ Parent ]

    •  Americans have been deficit spending (0+ / 0-)

      ...for thirty years as their salaries continue to shrink and prices rise.

      Government spends money in the economy whether it comes from taxes or the printer. A stronger economy cuts deficits without an increase in tax rates.

      Too many contradictory factors to come up with a single scenario.



      Denial is a drug.

      by Pluto on Mon Mar 04, 2013 at 04:34:57 PM PST

      [ Parent ]

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