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CHENEY WAS RIGHT ABOUT ONE THING: DEFICITS DON’T MATTER
April 25th, 2011
The Yin and Yang of Money
Here is why. Private banks always lend at interest, so more money is always owed back than was created in the first place. In fact investors of all sorts expect more money back than they paid. That means the debt needs to be not only maintained but expanded to keep the economy functioning. When the Fed “takes away the punch bowl” by tightening credit, there is insufficient money to pay off debts; people and businesses go into default; and the economy spins into a recession or depression.
Debt and Productivity
“Contrary to popular belief, Japan has been doing very well lately, despite the interests that wish to depict her as an economic mess. The illusion of her failure is used by globalists and other neoliberals to discourage Westerners, particularly Americans, from even caring about Japan’s economic policies, let alone learning from them. [And] it has been encouraged by the Japanese government as a way to get foreigners to stop pressing for changes in its neo-mercantilist trade policies.”
Investments in education, health care, and social security may not count as “sales,” but they improve both the standard of living of the people and national productivity. Businesses that don’t have to pay for health care can be more profitable and competitive internationally. Families that don’t have to save hundreds of thousands of dollars to put their children through college can spend on better housing, more vacations, and other consumer items.