Concepts

Governance‎ > ‎Fiscal policy‎ > ‎

Deficit


  • More spending and more debt are not solving problems.
  • The financial system failed because it was built on an illusion, our governmental system is also built on illusions.
  • The central bank is the economic planner, and has more influence than the private market.

Crisis is a friend of the state
-The governemnt never pays money back, it just borrows more to pay off the last loan.

Deficits matter when the currency is not fixed to a standard because governments can just print to pay them off. If you were to run out of that standard you could not purchase something until they purchased something from you.

Problems with a government running a deficit
  1. In tough times it is capital expenditure that gets cut first as the benefits are felt in the future not now.
    i.e no-one feels the pain now of not spending on capital projects

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