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View Diary: Austan Goolsbee’s Departure “Leaves Behind Frustration, Political Dysfunction” (239 comments)

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  •  We have the evidence that Austerity (3+ / 0-)
    Recommended by:
    aliasalias, blueoasis, ohmyheck

    has driven down the economies of several nations which made budget deficits the priority over stimulating jobs. Ironically, compounding the problem of deficits, as revenue bases get throttled so as to make secure the gambling establishments we call banks.

    So, there's a mystery on which condition applies at the moment?

    Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

    by Jim P on Tue Jun 07, 2011 at 10:38:32 AM PDT

    [ Parent ]

    •  Armando is advocating (1+ / 0-)
      Recommended by:

      the exact opposite of austerity.  I agree with other neoliberals that deficit spending doesn't really work for pump-priming except at the zero bound.  The reason is that ordinarily, running a deficit drives up interest rates which limits private sector borrowing, so there isn't really a boost to the economy, just a higher portion of the federal budget that has to be applied to debt service.  In a liquidity trap, interest rates don't go up -- people hold safe T-bills rather than selling them to invest in higher-yielding assets -- so that risk doesn't apply.

      "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

      by Loge on Tue Jun 07, 2011 at 11:13:53 AM PDT

      [ Parent ]

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