Sunday, March 13, 2011

Order of Events

If we get the economy to grow, we will reduce government debt. But this does not mean that if we reduce government debt, we will get the economy to grow.


Bigvic said...

You have no idea how many people on the internet don't understand this. Although I'm skeptical of the economy growing without government debt increasing. Or debt in general increasing.

The Arthurian said...

Depends how you look at the numbers, to be sure. Raw billions is blunt and doesn't show much; but it does seem to suit a personality type.

I prefer annual change in debt accumulation by sector. But the obviously increasing "debt in general" is divided out of these numbers, it is true.

"Debt in general" will continue to increase, except during depressions, as long as policymakers continue to believe that credit-use is good for growth, and that only printing money causes inflation.

See also: Tales of Debt Mountain