Thursday, July 28, 2011

The best Billy's got?

From today's Billy Blog:

If you think about it for one second or less you will realise this is a totally fraudulent representation of the situation in the US. The “red ink” jargon is accounting and auditing terminology which refers typically to the recording of a financial loss or revenue deficit for a private firm. The implication is that insolvency is possible.

There is no application of that concept to a sovereign government – one that issues its own currency...

That's it. That's all Billy has to offer. Insolvency is not possible if you can print your own money.

Billy, maybe you are right. But it is a damn weak argument.

Glance at the relation between Federal debt and everybody else's debt in the U.S. over the past several decades. The economy does well when our debt is growing, relative to the Federal debt.

The economy does poorly when private debt so vast that it impedes its own growth.

Billy, this is a good argument.

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