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I have been thinking about asking this for a while here now and hopefully somebody from this smart community can enlighten me
Why does debt matter when you can print your own money? Is it just inflation that we are worried about when we “pump” too much money into the economy?
In fact why does imf and world bank matter/exist when countries can print their own money? May be it’s not about the money but selling developed worlds “expertise” to build things in developing countries under the guise of a “loan”. Are these banks basically saying here is xxx million or billion to build a power plant and you can only use this money to pay companies from “my” country that will build your power plants ??
This (
https://scholar.harvard.edu/alesina/publications/what-do-we-...
) is sort of a pre-print to Alberto Alesina's book "Austerity" (
https://press.princeton.edu/books/hardcover/9780691172217/au...
). The book has some additional differences of course, however if you wanted to save money the pdf is free. Either or, Alesina's argument is that to reduce debt the best path is cutting over that of just raising taxes. Even cutting over raising taxes and cutting. This is cause taxes just act as a form of a credit card level increase and continues to allow for governmences to kick the can down the road.
There is a lot that can be said here too, ecb working paper notes the size of government constraining the private economy (
https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1399.pdf
). The best path forward is program cuts, without tax increases. Reduce the size of government and let the private economy grow us out of this hole.