I was reading an article in The Week by Jeff Spross who is the "economics and business" correspondent for that very liberal site. Spross was listing four things in the GOP tax plan that Democrats ought to support. Then I came across a paragraph which encapsulates in a few sentences the dire state of economic understanding by the left. Spross argues that there is no reason to be concerned about the size of the national debt and explains why. Here are those sentences:
As I've argued before, since the federal government controls the supply of the U.S. currency, it doesn't actually need to bring in revenue through taxes. It can just create new money supplies.
Let's take a moment to understand what Spross is saying. The government doesn't have to raise enough funds through taxes to pay for expenditures. That is because the government can just print more money to pay its bills. Wow!
According to Spross, the economics correspondent, it would be perfectly fine for the government to spend an extra trillion dollars each year and then just print the cash to pay the bills. This ignores the inflationary effect of additional cash. This method of governing was tried in the 1920s in Germany. The result was inflation so great that a loaf of bread cost ten million marks. The currency became worthless and the wealth of the people was wiped out. It was one of the big reasons that the Nazis gained power.
There are a great many economic treatises that explain the danger of the government simply printing cash to pay its bills. As an economics correspondent, Spross should at least be familiar with this concept even if he hasn't read these books. His ignorance is the equivalent of a medical correspondent reporting that one can cure cancer by drinking orange juice twice a week. It's totally moronic, but The Week publishes it as if it makes sense. It's not just Fake News; it's idiocy.
As I've argued before, since the federal government controls the supply of the U.S. currency, it doesn't actually need to bring in revenue through taxes. It can just create new money supplies.
Let's take a moment to understand what Spross is saying. The government doesn't have to raise enough funds through taxes to pay for expenditures. That is because the government can just print more money to pay its bills. Wow!
According to Spross, the economics correspondent, it would be perfectly fine for the government to spend an extra trillion dollars each year and then just print the cash to pay the bills. This ignores the inflationary effect of additional cash. This method of governing was tried in the 1920s in Germany. The result was inflation so great that a loaf of bread cost ten million marks. The currency became worthless and the wealth of the people was wiped out. It was one of the big reasons that the Nazis gained power.
There are a great many economic treatises that explain the danger of the government simply printing cash to pay its bills. As an economics correspondent, Spross should at least be familiar with this concept even if he hasn't read these books. His ignorance is the equivalent of a medical correspondent reporting that one can cure cancer by drinking orange juice twice a week. It's totally moronic, but The Week publishes it as if it makes sense. It's not just Fake News; it's idiocy.
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