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For once I am not going to talk about MMT.
I am going to talk about *mainstream* neoclassical economics.
We are told Tax& #39;s fund spending, and any spending above taxation is met with borrowing, which has to be paid back by our kids. So what does this idea logically lead to?
I am going to talk about *mainstream* neoclassical economics.
We are told Tax& #39;s fund spending, and any spending above taxation is met with borrowing, which has to be paid back by our kids. So what does this idea logically lead to?
So the premise of this, is the government is, like the rest of us, a user of the currency, and should, like the rest of us, balance its books, or even better, run a surplus.
So say the government does this - balances its books.
This means all money must be created by banks.
So say the government does this - balances its books.
This means all money must be created by banks.
So...where does this lead?
you can split the population into two. Those with money, those without. Those with money do not generally need to get bank loans. Those without, usually do.
Since bank loan interest transfers wealth away, from the loan holder, this leads to...
you can split the population into two. Those with money, those without. Those with money do not generally need to get bank loans. Those without, usually do.
Since bank loan interest transfers wealth away, from the loan holder, this leads to...
increases in inequality:
- The economy needs increase loans to function.
- The poor carry the burden of loans
- The rich get richer, since they don& #39;t need them.
- Inequality explodes.
If you are rich, you need to keep the idea of governments having no money, to keep status quo
- The economy needs increase loans to function.
- The poor carry the burden of loans
- The rich get richer, since they don& #39;t need them.
- Inequality explodes.
If you are rich, you need to keep the idea of governments having no money, to keep status quo
Governments following these ideals will strive to keep pushing more and more loans onto people - pushing down interest rates to increase property prices since more mortgages = more money in the economy to keep it going.
But, like a drug, eventually the system can& #39;t take it.
But, like a drug, eventually the system can& #39;t take it.
