Response to Dan de la Torre
Editor:Regarding the fallacies of Dan de la Torre’s economics:
I have been trying to unpack some of the rhetoric around our so-called budget crisis. Here are a few observations:
“Your bank called and said you’re overdrawn.”
The federal deficit is not analogous to your personal checking account. The government borrows money for the same reason you have a mortgage: to purchase and improve assets (and to fund wars). If you had to “balance your budget,” in that sense, you would never be able to own a home.
“The government is broke.” If this is so, how can we afford three wars? Answer: see below.
“Its temporary solution is to print massive amount of cash, with nothing to back it up”. There is not a finite amount of money. Money is a fiction that we agree to maintain. It hasn’t been “backed up” by anything since 1971 when Nixon abandoned the gold standard. Increasing or decreasing the money supply is exactly how governments regulate economies with the goal that we have full employment and low inflation. Capitalism left to itself cannot do this. The Great Depression made this obvious and the facts have not changed. The recent “stimulus” would have worked if it hadn’t been mis-directed.
”The US is continuing to borrow from other countries like China.” China holds around 8% of US debt. 40% of our debt is held by individuals and institutions in this country, the rest by other countries such as Brazil and the UK. Government borrowing is actually unnecessary. But, by insisting that the government borrow rather than regulate the money supply, conservatives further their goal of demonizing government. By the way, bond yields have remained low during the current economic crisis, showing that the bond markets think they are a safe investment (demand for bonds is high).
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There you go with that liberal fact crazy talk. We all know reality has a distinct left wing bias. Why can’t you just be deluded like normal people? May 21 or October 21, I’m confused as to which, none of this will matter. We won’t need money, Obama’s birth certificate or corpse photos of bin Laden. So keep your pinko facts to yourself.