The government can create money to fund important programs from "summary" of The Deficit Myth by Stephanie Kelton
The government has the power to create money, a fact that is often overlooked or misunderstood in discussions about how to pay for important programs. When we talk about funding critical initiatives, such as healthcare, education, or infrastructure, the typical response is to ask, "How will we pay for it?" This question is rooted in the belief that the government must rely on tax revenue or borrowing to finance its spending. However, this conventional wisdom is based on faulty assumptions about how our monetary system actually works. In reality, the government is not like a household or a business that must balance its budget by bringing in enough income to cover its expenses. Unlike a household, the government has the unique authority to issue currency and set the terms under which that currency is accepted. This means that the government can never "run out of money" in the same way that a household can. Instead of being constrained by revenue, the government's spending decisions should be guided by the real resources available in the economy. When the governm...
Similar Posts
Central banks have a significant influence on financial markets
Central banks play a crucial role in influencing financial markets. Through their monetary policy tools, central banks can dire...
Growth theory offers insights for policymakers seeking to promote sustainable economic development
Growth theory provides a framework for understanding the factors that drive economic growth over time. By analyzing the key det...
Economic growth is driven by investment and innovation
Investment and innovation are two key drivers of economic growth. When businesses invest in new equipment, technology, or infra...
The value of Bitcoin comes from its ability to function as a medium of exchange, unit of account, and store of value
Bitcoin's value lies in its multifaceted role as a medium of exchange, unit of account, and store of value. As a medium of exch...
Let go of limiting beliefs about money
It is essential to recognize and release any beliefs that may be hindering your ability to attract and manage money effectively...
Cultural and artistic pursuits enhance happiness
The pursuit of cultural and artistic activities can significantly contribute to one's overall sense of happiness and well-being...
Comparative advantage drives specialization
The principle of comparative advantage in economics is a powerful concept that explains why individuals, businesses, and countr...
Myth of economic equality
The idea that economic equality can – and should – be achieved is a seductive notion that has captured the imagination of many ...
Industrial policies should support structural transformation
Industrial policies play a crucial role in shaping the economic structure of a country. The primary aim of industrial policies ...
Debt overhang affects consumer spending
When people have a lot of debt hanging over their heads, they tend to cut back on their spending. This might seem obvious, but ...
