Tag Archives | Growth

Never having to pay back your debts

If you are a government, you never have to pay back your debt, and this is a fundamental difference between individuals and governments. When worries over how the US Government is ever going to pay back its huge debt the answer appears to be, from history, that it won’t. An article in the Atlantic magazine looks at US government debt and how it has been reduced in the past. The main method for paying it down is not to pay back the debt but to increase growth and make the debt a smaller proportion of the economy. Some are arguing for spending now, with debt increases, to stimulate the economy, as has happened in the past. This is Classic Keynesian economics , when governments spend more when economies are slow and less when they are good, something some economist such as Paul Krugman are currently arguing for (and most Republican are against!). Click here to have a look at this issue in more detail http://bit.ly/WFXkmS

NeverPayBackDebt

Source: The Atlantic Magazine

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