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View Diary: The Manufacturing of Consent (22 comments)

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  •  This is Ron Paul crazy stuff....which also borders (1+ / 0-)
    Recommended by:
    Roger Fox

    on arch-conservative monetary theory.

    Gov't. deficits at a time when private investment is lagging is a quick way to re-inflate (a good thing) a depressed economy. Once that aggregate demand is revived, the private sector will re-invest because there is more employment, more demand for Goods and services and government will then be able to reduce the deficits.

    If you understand that demand begets supply and not the reverse, you can understand how credit creation through managed government deficits (preferably spending on those who have a high propensity to consume with an additional dollar) will contribute to a recovery of private investment.

    Private investment won't happen or will lag until Demand generates opportunities to gain a return on that investment.

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