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Economy See other Economy Articles Title: The US is living below its “means”
Source:
billy blog, Alternative Economic Thinking
URL Source: http://bilbo.economicoutlook.net/blog/?p=14649
Published: May 28, 2011
Author: Bill Mitchell
Post Date: 2011-05-30 23:13:13 by lucysmom
Keywords: deficit spending, a little richer, a little poorer Views: 13987
Comments: 28
The US press was awash with claims over the weekend that the US was living beyond its means and that will not be viable for a whole lot longer. One senior US central banker claimed that the way to resolve the sluggish growth was to increase interest rates to ensure people would save. Funny, the same person also wants fiscal policy to contract. Another fiscal contraction expansion zealot. Pity it only kills growth. Another commentator chose, lazily to be the mouthpiece for the conservative lobby and wrote a book review that focused on the scary and exploding public debt levels. Apparently, this public debt tells us that the US is living beyond its means. Well, when I look at the data I see around 16 per cent of available labour idle in the US and capacity utilisation rates that are still very low. That tells me that there is a lot of means available to be called into production to generate incomes and prosperity. A national government doesnt really have any means. It needs to spend to get hold off the means (production resources). Given the idle labour and low capacity utilisation rates the government in the US is clearly not spending enough. The US is currently living well below its means. But the US government can always buy any means that are available for sale in US dollars and if there is insufficient demand for these resources emanating from the non-government sector then the US government can bring those idle means into productive use any time it chooses. Spending equals income. Someone has to spend for incomes to exist. For incomes to grow there has to be growth in spending. There are three sources of spending growth in a macroeconomy the external sector (if net exports are positive); the private domestic sector; and the government sector (if the budget is in deficit). That is indisputable. Economic growth is defined in terms of production and production only occurs if there are goods and services being purchased. Firms do not produce to hold inventory. Firms may invest in response to their guesses about future sales. These guesses will be heavily influenced by current consumer actions. So when you get commentators and high-level monetary officials arguing that growth comes from not spending you have to ask why anyone would listen to their views and why they are paid to express them. I dont mind bloggers who do it for free saying what they like but when highly-paid and highly-visible express views that are not grounded in any economic theory that is comprehensible but nonetheless seek to influence the policy debate then I get angry. Click for Full Text!
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It is our responsibility to protect that child once that childs born too. When we start debating a budget, lets make sure we dont cut 100,000 vaccines. Lets make sure weve got health insurance. We seem to worship what we cannot see, but as soon as that babys born, oh no, we dont want to be intrusive. Texas is going to shrink government until it fits inside a womens uterus. Senator Leticia Van de Putte
"We (government) need to do a lot less, a lot sooner" ~Ron Paul
Obama's watch stopped on 24 May 2008, but he's been too busy smoking crack to notice.
It is our responsibility to protect that child once that childs born too. When we start debating a budget, lets make sure we dont cut 100,000 vaccines. Lets make sure weve got health insurance. We seem to worship what we cannot see, but as soon as that babys born, oh no, we dont want to be intrusive. Texas is going to shrink government until it fits inside a womens uterus. Senator Leticia Van de Putte
It is our responsibility to protect that child once that childs born too. When we start debating a budget, lets make sure we dont cut 100,000 vaccines. Lets make sure weve got health insurance. We seem to worship what we cannot see, but as soon as that babys born, oh no, we dont want to be intrusive. Texas is going to shrink government until it fits inside a womens uterus. Senator Leticia Van de Putte
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." --GW Bush
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
It is our responsibility to protect that child once that childs born too. When we start debating a budget, lets make sure we dont cut 100,000 vaccines. Lets make sure weve got health insurance. We seem to worship what we cannot see, but as soon as that babys born, oh no, we dont want to be intrusive. Texas is going to shrink government until it fits inside a womens uterus. Senator Leticia Van de Putte
It is our responsibility to protect that child once that childs born too. When we start debating a budget, lets make sure we dont cut 100,000 vaccines. Lets make sure weve got health insurance. We seem to worship what we cannot see, but as soon as that babys born, oh no, we dont want to be intrusive. Texas is going to shrink government until it fits inside a womens uterus. Senator Leticia Van de Putte
Proxy IP's are amusing.....lmao
It is our responsibility to protect that child once that childs born too. When we start debating a budget, lets make sure we dont cut 100,000 vaccines. Lets make sure weve got health insurance. We seem to worship what we cannot see, but as soon as that babys born, oh no, we dont want to be intrusive. Texas is going to shrink government until it fits inside a womens uterus. Senator Leticia Van de Putte
"Thats because your basically and idiot." Badeye posted on 2011-04-29 10:30:22 ET
It is our responsibility to protect that child once that childs born too. When we start debating a budget, lets make sure we dont cut 100,000 vaccines. Lets make sure weve got health insurance. We seem to worship what we cannot see, but as soon as that babys born, oh no, we dont want to be intrusive. Texas is going to shrink government until it fits inside a womens uterus. Senator Leticia Van de Putte
"Thats because your basically and idiot." Badeye posted on 2011-04-29 10:30:22 ET
List of those unable to think: mcgowanjm, ferret mike, skippy, fartboy/yukko, white sands, bucky, lucys idiot mom, e_type_jackoff, go56, badlie, wreck, calCON, mininggold, war, Banjo Boris, Biff, Godwinson and meguro. If you're on the above list, you're too fucking stupid to hold a real conversation. Bumper sticker on DwarF's car:
List of those unable to think: mcgowanjm, ferret mike, skippy, fartboy/yukko, white sands, bucky, lucys idiot mom, e_type_jackoff, go56, badlie, wreck, calCON, mininggold, war, Banjo Boris, Biff, Godwinson and meguro. If you're on the above list, you're too fucking stupid to hold a real conversation. Bumper sticker on DwarF's car:
Proxy IP's are amusing.....lmao
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
List of those unable to think: mcgowanjm, ferret mike, skippy, fartboy/yukko, white sands, bucky, lucys idiot mom, e_type_jackoff, go56, badlie, wreck, calCON, mininggold, war, Banjo Boris, Biff, Godwinson and meguro. If you're on the above list, you're too fucking stupid to hold a real conversation. Bumper sticker on DwarF's car:
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
"Keep Your Goddamn Government Hands Off My Medicare!" - Various Tea Party signs.
"Everything that can be invented has been invented."-- Charles Duell, Commissioner of US Patent Office, 1899
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