posted on Feb, 19 2012 @ 10:12 AM
As someone trained in economics, I will say this. Deficit and debt are neither bad nor good. What hurts us is blind ideology, like saying that debt
is always bad, or that debt is always good. The ideologically driven are people who have political agendas to support or the dunces who follow
One thing that is certain: going more deeply in debt to spend domestically (within reason) at a time of recession will stimulate the economy, and
reducing the debt at a time of recession will cause the economy to contract further. See Europe for examples of economic suicide through austerity.
That the Obama administration has chosen to take us further into debt during a time when austerity would have crippled us is a testament to their
wisdom, not their recklessness.
But there is something else you need to understand. The U.S. is not like any other country. Other countries cannot print themselves out of debt
because this causes their currencies to fall in relation to the dollar, and the dollar is how the world buys stuff. So printing more currency, for
them, changes the value of their currency more or less proportionally to the amount they print. And their debt is, in essence, denominated in dollars
(or Euros, which still puts the weaker Euro countries at a similar disadvantage). The U.S., on the other hand, when putting more dollars in
circulation, essentially changes the ground rules under which the world plays, INCLUDING ITSELF, so that the full effect of the stimulous is not
nearly as dangerous to the U.S. This is the advantage of winning WWII and being able to enforce economic hegemony on the world.
What "printing" money is all about is implicitly taxing wealth. If you hold a billion in dollars and I devalue the dollar by 10%, you have the
purchasing power of 900 million. The difference has been used to implicitly reduce the country's debt obligation, which presumably means that the
economy was stimulated and wealth was redistributed more widely. Which gets to why Repubs/conservatives hate this idea. They are the ones with all
the money, and they want to keep it for themselves. If that means the economy collapses, too bad, they're rich and will do fine anyway. If you are
not rich, by the way, and you buy into this economic or budget austerity nonsense, you are voting against your own interests. You are voting for you
and your neighbors to starve in order to protect the wealth of a few rich families.