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good rant, but plain and simply, the us gov’t balancing the budget would put that guy and the rest of main street directly into a murderhole…
how so checklist ?
cronkite, it’s checklist’s “balanced budgets tank the economy” thesis.
it is not my opinion, not my thesis, but a fact of accounting, that the net savings in dollars or equivalent assets of Americans (and American companies, etc.) is exactly equivalent to:
cumulative national “debt” + cumulative national “trade deficit”, period,t his is a verifiable fact, not an opinon, etc.
So in a debt crisis, what do people need? They need to increase net savings, so as to have more disposable income, etc.
So, if in a debt crisis, (and, look it up, what I said above about savings is EXACTLY accurate, in fact, to the penny) the government decides to eliminate the ability of people to save (which is EXACTLY what eliminating the deficit would do), not any one person, but people at large, what would happen? eternal continuation of the crisis, and almost certainly another trip into recession, as people try to save dollars that aren’t being created for them to save… stripping someone else of their ability to save, etc.
Its very, very simple, its factual, and inarguable. If we balanced the gov’t budget right now the result would be a quick and brutal trip into recession, leading to an imbalanced budget.
The MMT guys call it “sectoral balances”.
The dream of a government with massive net savings combined with a private sector with massive net savings and prosperity, combined with controlled inflation (folks, deflation is never good)… is a pipe dream. Unless you are a massive net exporter (see equation above). And even massive net exporters run huge deficits, don’t they (but this allows even greater levels of private sector savings, etc.).
Its not a theory, its just accounting. Its not a theory that the gov’t can’t run this massive, epic, glorious surplus while the private sector does too (unless you are a huge net exporter).
And even china, frankly, doesn’t actually have huge (i’m now hypothesizing) gov’t and private sector savings, i’d guess its gov’t is in huge debt, and will wind up having to print enormous amounts of yuan to back its guarantees.
Inflation is wildly misunderstood, the money multiplier is pure fiction, QE doesn’t “print money”, and what we really need is an enormous targeted construction stimulus from the government…
None of this is actually in dispute with, say, jakie and his anti-gov’t beliefs. I do not support gov’t regulation OR (in normalized times) spending, really. Although some regulation and gov’t spending are clearly necessary (schools, reasonable laws). In normalized times we need a gov’t deficit perpetually to match the desired rate of growth of the economy (gov’t debt isn’t debt, at all, its creation of currency) without promoting excessive inflation and this should be accomplished via lower taxes, not via increased gov’t spending.
But rihgt now lower taxes won’t efficiently create jobs, it will efficiently reduce debt and/or increase savings. Right now (debt crisis, unique circumstance) we need targeted construction stimulus.
Some of the above was hypothesis, the FACT that gov’t debt less cumulative trade deficit EQUALS net savings is NOT a hypothesis, it is simple accounting.
Eliminate the ability of the citizens to save, in a debt crisis (meaning, a deficit lower than the trade deficit) and you will create a disaster, period. Not a hypothesis, a reasonably logical conclusion from simple accounting fact.
that “pipe dream” of gov’t surplus, private sector booming, and no massive trade surplus isn’t a pipe dream, its a factual impossibility.
I misspoke.
-minus- cumulative national trade deficit, not plus