Seven Deadly Frauds of Conservative Economic Policy
Deadly Innocent Fraud #1:
The federal government must raise funds through
taxation or borrowing in order to spend. In other
words, government spending is limited by its ability
to tax or borrow.
Federal government spending is in no case
operationally constrained by revenues, meaning
that there is no “solvency risk.” In other words,
the federal government can always make any and all
payments in its own currency, no matter how large
the deficit is, or how few taxes it collects.
Deadly Innocent Fraud #2:
With government deficits, we are leaving our debt
burden to our children.
Collectively, in real terms, there is no such
burden possible. Debt or no debt, our children get to
consume whatever they can produce.
Deadly Innocent Fraud #3:
Federal Government budget deficits take away
Federal Government budget deficits ADD to
Deadly Innocent Fraud #4:
Social Security is broken.
Federal Government Checks Don’t Bounce.
Deadly Innocent Fraud #5:
The trade deficit is an unsustainable imbalance
that takes away jobs and output.
Imports are real benefits and exports are real
costs. Trade deficits directly improve our standard of
living. Jobs are lost because taxes are too high for a
given level of government spending, not because of
Deadly Innocent Fraud #6:
We need savings to provide the funds for
Investment adds to savings.
Deadly Innocent Fraud #7:
It’s a bad thing that higher deficits today mean
higher taxes tomorrow.
I agree - the innocent fraud is that it’s a bad thing,
when in fact it’s a good thing!!!