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But you are shifting the goalposts. Of course there is a limit to a government surplus. But that isn't an argument against higher taxes long-term to balance the budget. Furthermore prior to the start of the last crisis some countries - sweden, canada - had a surplus years in a row.
There is precisely one way to inject high-powered money into the economy: Sovereign deficits. So on average over the long run, the sovereign should run deficits.
The fact that you should sometimes run surpluses during the boom part of the business cycle does not change the fact that the sovereign has to be in the red on a cycle-averaged basis, any more than a cold summer disproves global warming.
If you're talking short-run, then attempting to run surpluses is counterindicated at the moment. If you're talking long-run, then surpluses are wrong-headed, full stop.
Friends come and go. Enemies accumulate.
What is high-powered money supposed to be?
High-powered money is created ex nihilo when the sovereign spends, and destroyed when the sovereign taxes.
Various sorts of low-powered money is created by various sorts of private lending.
(also base money, money base, high-powered money, reserve money, or, in the UK, narrow money) is a term relating to (but not being equivalent to) the money supply (or money stock), the amount of money in the economy. The monetary base is highly liquid money that consists of coins, paper money (both as bank vault cash and as currency circulating in the public), and commercial banks' reserves with the central bank.
Furthermore prior to the start of the last crisis some countries - sweden, canada - had a surplus years in a row.
Sweden is running a surplus by means of a trade surplus, sustained by keeping wages from following productivity. It is one way to slowly race the working class to the bottom, but it can not be ran by many contestants at the same time as someone has to have a trade deficit for someone else to have a trade surplus.
Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
For example former DGB chairman
Dieter Schulte (Gewerkschafter) - Wikipedia
In die Medien kam der Sozialdemokrat Schulte zuletzt im September 2005, als er den IG-Metall-Vorsitzenden Jürgen Peters wegen dessen versteckter Wahlempfehlung für die Linkspartei.PDS in der Hannoverschen Allgemeinen Zeitung angriff. Dort hatte Peters spekuliert, es könne ,,am 18. September eine Mehrheit links von der Mitte geben." Schulte hielt dem entgegen: ,,Peters ist auf einem Irrweg. Gewerkschaften müssen ihre Positionen in die regierungswilligen Parteien tragen, statt eine Gruppe von Versprengten zu unterstützen, die lediglich auf der Hinterbank des Parlaments ideologische Schlachten austragen will. Ich habe erhebliche Zweifel, dass Peters mit diesem Kurs für die Mehrheit der IG Metall sprich
Now leading a party think tank and hating on the Left.
Nur der Euro bleibt stehen - von Berlin bis Athen
- Georg Kreisler
Los sindicatos piden por carta a Zapatero medidas para contener beneficios y una regulación temporal de precios
The [two largest] unions in a letter to ZP ast for measures to contain profits and a temporary regulation of prices
talos dug out some stats on that subject back when.
But that is because of competitive wage deflation in the core and the RoW, not because of wage inflation.
Though this begs the question, wage deflation/inflation relative to what?
Economics is politics by other means
Um, what got us here in the first place was that the periphery financed its consumption though lending from the core. There was a massive private debt and asset price bubble, not a gross increase in profits and wages in the periphery. And a lot of inflation, with all this debt and asset price money slushing around.
Economics is politics by other means
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