Why Deficits Hardly Matter

Louise Davidson

Chapter 20 in Money and Employment, 1990, pp 319-323 from Palgrave Macmillan

Abstract: Abstract The conventional economic wisdom being dispensed this election year by Democrats and Republicans alike is that the current size of the Federal deficit is ruining our nation’s economic health. In the past deficits might have been useful, we are told, but in 1984 our rising debt is ‘bad govern-mental policy’ because: 1. We are approaching full production capacity (even with 7.5 per cent unemployment?). 2. It is being financed by excessive monetary expansion and is therefore inflationary. 3. It is absorbing half of net savings and hence is reducing productive capital formation. 4. The resulting high interest rates are necessary to shield the economy from inflation. 5. Foreigners who buy US Treasury bonds are laying claim to future American wealth.

Keywords: Money Supply; Conventional Wisdom; Full Employment; High Interest Rate; Income Policy (search for similar items in EconPapers)
Date: 1990
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-11513-6_21

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349115136

DOI: 10.1007/978-1-349-11513-6_21

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().