Government spending is essential for economic growth from "summary" of The Deficit Myth by Stephanie Kelton
The idea that government spending is essential for economic growth may seem counterintuitive to some. After all, we are often told that the government needs to tighten its belt and reduce its spending in order to stimulate the economy. But this perspective overlooks a crucial point – when the government spends money, it creates income for someone else. This, in turn, enables that person to spend money, which then creates income for another person, and so on. This chain reaction is what drives economic growth. In her book, Stephanie Kelton explains that government spending is not like a household budget. Unlike a household, the government can never run out of money because it is the issuer of the currency. This means that the government can always afford to spend money into the economy, regardless of its current revenue. In fact, Kelton argues that government deficits are not inherently bad, as they can actually help to boo...
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