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

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  •  The need for government deficits (2+ / 0-)
    Recommended by:
    splashy, katiec

    The need for deficits comes from two sources.

    One is the need for actors in the economy to save. In other words, if the money does not get recirculated, but ends up in a safe lock box in somebody's basement. This savings generally is as a percent of income. These savings act as a buffer stock for an individual entity to tide against bad times.

    The second need for deficits comes from the need to stimulate the economy out of recessions and depressions, and also from the desire of the population to increase their levels of consumption - in other words a better quality of life. This is a macro need, that comes about because of the actions of the entire society (compared with individual need in the first point I made.)

    Thus from a very real perspective, the accumulated deficits of the government can be considered the accumulated savings of the society as a whole.

    The needs for the deficits will fluctuate depending upon the economic conditions. However, as long as the society desires to increase its levels of consumption - either due to an increase in population, or from a desire for improving its standard of living, there will be a need for continued deficit spending on part of the government.

    •  In the case of saving, if the govenment (1+ / 0-)
      Recommended by:
      katiec

      provides an adequate safety net to help those in need work their way through hard times or disasters then the need to save is greatly reduced. In effect, rather than save, we citizens can purchase an insurance policy that will cover our losses when disaster strikes. And obviously, we already have the technical capabilities to do this, we merely need to add things to the range of covered losses. We are very well positioned to transform our society by adopting MMT and adapting existing systems and technologies.

      Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

      by hestal on Sun Nov 11, 2012 at 06:03:45 AM PST

      [ Parent ]

      •  I've really enjoyed reading your comments. &... (0+ / 0-)

        I assumed you were a woman cuz you're so nice and reasonable :)

        •  No, I am male, but I am old and wise. (1+ / 0-)
          Recommended by:
          katiec

          my mother and my grandmothers were very smart and deeply analytical, and they were all three very, very strong. My father was the smartest man I have ever known. He had only an eighth grade education but he knew so much about so much, he was fascinating, and he understood what was important in life. The first two decades of my life were an intellectual adventure but I didn't know it until I went to college. Forgive me, but anonymity frees one to say what one thinks.

          Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

          by hestal on Sun Nov 11, 2012 at 05:51:59 PM PST

          [ Parent ]

          •  You're a really good writer, and bet you have (1+ / 0-)
            Recommended by:
            hestal

            a really good book in there somewhere.

            •  You humble me, and that ain't easy to do. nt (0+ / 0-)

              Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

              by hestal on Mon Nov 12, 2012 at 01:07:15 PM PST

              [ Parent ]

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