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View Diary: Rachel Maddow: "The most persistent [Republican] myth in the modern politics of American money." (120 comments)

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  •  I think you are correct. You don't want to (2+ / 0-)
    Recommended by:
    hungrycoyote, elwior

    balance the budget in a recession.  That's why I would favor some type of mechanism where we are forced to balance the budget over a rolling period.  Recessions tend to be relatively short in duration and if you were required to balance the budget over the course of a 3 or 4 year rolling period that would seem to be reasonable.

    So if in year 1 you have a budget surplus of lets say 100 billion dollars, you then enter a recession and your deficit is 250 billion dollars.  In the next two years you would then have to develop a budget surplus of 150 billion dollars if you had a rolling 4 year period where at the end of each 4 year period you had to balance the budget.  

    I'm not beholden to the 4 year period.  That may be too artificially short.  But if you do it over a rolling period then it greatly reduces the very valid point that you raised in your comment.

    Hey, but let's "look on the bright side, there's always suicide" if that doesn't work.  (Based on your sig line I think you would appreciate that last comment because I never met a wise man (but) if so he's a woman.)

    We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

    by theotherside on Tue Oct 16, 2012 at 09:58:55 AM PDT

    [ Parent ]

    •  We have 200 years of deficits (1+ / 0-)
      Recommended by:
      elwior

      because we are a wealthy industrial powerhouse, and, by accounting identity, you cannot have sustained private sector surpluses without either trade surpluses or federal deficits to balance the equation. Think of riding a bicycle. Every so often you have to pedal a little, sometimes you come to favorable terrain and you don't need to pedal at all. What you can't do is recapture those pedal pushes back into your legs. Once they're spent, they're spent, just like when the government spends NEW money into existence.

      We are a nation with sovereign money. Our society builds its future and commonwealth out of the real resources we possess, not out of money.  Money is only a tool, and it is the simplestand most inexpensive tool we can make. 

      This is a fundamental strength of America. The eurozone lacks this fundamental strength as each nation has relinquished monetary sovereignty to the ECB. They are currency users. America is a currency issuer.

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