What the government and the neoclassical economists don't understand is that "paying back" the "debt" by reducing deficits or running a surplus takes money out of the economy. That's unemployment and stalling productivity. If people do not have jobs to pay for the private goods and services, those businesses fold too resulting in more un…
What the government and the neoclassical economists don't understand is that "paying back" the "debt" by reducing deficits or running a surplus takes money out of the economy. That's unemployment and stalling productivity. If people do not have jobs to pay for the private goods and services, those businesses fold too resulting in more unemployment etc etc.
That lack of new spend into the system from government must result in increasing private debt, and that's exactly what we see.
It's the private debt we need to be concerned about, not the "public debt"
What the government and the neoclassical economists don't understand is that "paying back" the "debt" by reducing deficits or running a surplus takes money out of the economy. That's unemployment and stalling productivity. If people do not have jobs to pay for the private goods and services, those businesses fold too resulting in more unemployment etc etc.
That lack of new spend into the system from government must result in increasing private debt, and that's exactly what we see.
It's the private debt we need to be concerned about, not the "public debt"
I am a fan of modern monetary theory. Having recently read the deficit myth. I agree with your assessment of the situation