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View Diary: Insolvency, tax cuts, military spending and social security (188 comments)

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  •  Actually, we can. One reason the EU nations (5+ / 0-)

    face a more dire situation than the U.S. at present is that they relinquished their monetary sovereignty.  The U.S., having retained monetary sovereignty, can print as much money as it decides to.

    No one is seriously advocating printing trillions right now.  But, the federal government has the capacity to stimulate economic activity and reduce unemployment by injecting cash into the system.

    Unlike a private individual who has to pay back her/his debt to avoid bankruptcy, a government which is monetarily sovereign does not.  Thus, the U.S. needs only to make sure that the tax base grows more rapidly than the debt--and that is entirely doable if the political class and pundits will stop lying about how the increasing debt is the #1 problem facing our economy.  Funny how we ONLY hear that during Democratic administrations; and NEVER, EVER--as Armando points out--do we hear of the role of vastly increased military spending and unnecessary wars as main contributing factors to this debt.

    The U.S. only recently crested the 100% debt-to-GDP ratio.  Great Britain, by contrast, had a ration >100% for large chunks of the last 200 years.

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