Makes sense to you? It's pure nonsense to suggest the government can alleviate all of human suffering and discomfort caused by the scarcity of economic goods, simply by spending more money.
I would not claim that govt spending can alleviate all human suffering, but it surely can eliminate that caused by inadequate aggregate demand.
About a year ago, at The Big Picture David Merkel said,"Mosler is patting himself on the back before external validation arrives. If we take the case where the Fed buys the debt, well, that’s monetizing the debt, with more inflation than we would have had."Regardless of who buys the debt, there is an eventual payback, default, or inflation that must occur. There is no free lunch."My queston is, Where, if anywhere, does Merkel have it wrong?
Let's try the Merkel link again:http://www.ritholtz.com/blog/2009/02/deficit-spending-for-dummies/#comment-147089Must have screwed it up the first time.
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