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View Diary: There is NO fiscal cliff. (69 comments)

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  •  Thank you Hannah. (8+ / 0-)

    It's most important to understand, first and foremost, what money in a fiat system is and is not.  Money is something that users must acquire fist to spend, but is not something that the issuer must first acquire to spend.  For without the issuer first spending, there is no money.  The Federal government cannot acquire its own money unless it issues it first. Since money becomes the medium to move products and services in a fiat system, a lack of that money can slow the system down and stop that exchange activity.  If too much of the money being issued is being saved and not spent, then the issuer of the money must issue some more to fill the gap or the economy sinks--as is now the case.  So a deficit is really nothing more than the government's responsibility to back-fill dollars that are being saved in the private sector.  Cutting the deficit, then, only discourages private savings while at the same time deflating the economy.

    Bottom line: the fiscal cliff is nothing more than the issuers of the currency acting like they are users and abrogating their fiscal responsibility.

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