That's because we only allow ourselves to fund public spending through debt. In addition, if I may quote myself quoting Keynes:

European Tribune: Keen on Keynes

When involuntary unemployment exists, the marginal disutility of labour is necessarily less than the marginal product. Indeed it may be much less. For a man who has been long unemployed some measure of labour, instead of involving disutility, may have a positive utility. If this is accepted, the above reasoning shows how 'wasteful' loan expenditure^[1]may nevertheless enrich the community on balance. Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better.

It is curious how common sense, wriggling for an escape from absurd conclusions, has been apt to reach a preference for wholly 'wasteful' forms of loan expenditure rather than for partly wasteful forms, which, because they are not wholly wasteful, tend to be judged on strict 'business' principles. For example, unemployment relief financed by loans is more readily accepted than the fiinancing of improvements at a charge below the current rate of interest; whilst the form of digging holes in the ground known as gold-mining, which not only adds nothing whatever to the real wealth of  the world but involved the disutility of labour, is the most acceptable of all solutions.

(My emphasis)

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris

One of the problems is that European governments have taken the 3% deficit limit from the Growth and Stability Pact as a target in good times, which will prevent them from running anti-cyclical deficit spending in bad times.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris

the pear in two, I suppose. Without going into a long post which deserves a diary, not all budget deficits are bad; ones which are expressly to invest in future propserity are certainly good deficits: education, reduction of collective carbon footprint by putting money into noncarbon fuelled parts of the energy grid, mass transit infrastructure, public safety and security, quality accessible and affordable housing to facilitate greater labor marke flexbility (and note, when i say flexible, i don't mean it the same way as a neo-lib).

But we don't tax the wealthy near enough for them to pay their fair share for what they extract from the societies in which they live. And it isn't just the wealthy at fault here, though by buying elections they get a special part of the blame; the middle class (esp the petite bourgeoisie) strivers, for their various reasons, also adopt the values and interests of their employers. The reasons for this can best be read in your native tongue, straight out of Lukacs), though I imagine in todays' "modern" Hungary he may have gone temporarily out of style.

I had a friend link this to me not too long ago, it'll give you a few ideas, in French, from a classic french lefty, how to balance a budget and go after a self-interested, self-satisfied press at the same time:

Probably worth a post and an xlation...sorry no time, but I agree with him, if you do start taxing marginal rates at 100% (and you don't have to be communist to want this, either, see Sweden's tax code from not so long ago) you'll see a lot more sustainable state revenues, and also you'll no longer have the sorts of twisted incentives which anglo-american financial capitalism is seeing unwound today.

The Hun is always either at your throat or at your feet. Winston Churchill

Actually, this is the one I meant to post up:

Go the the last 15 second, paraphrasing:

You make more than ff4 millions, 100% tax, I take it all

He then proceeds to ridicule the journalists for being disrespectful and uncooperative, as they likely will be impacted by this proposal and want to use the press organs to decredibilize him...

Good stuff, entertaining too, and if you like many other educated folks (and some less educated, like Clavier) think of him as looking somewhat foolish here, that's because you are perhaps not the target audience.

The Hun is always either at your throat or at your feet. Winston Churchill

However, you have foreign capital inflows as necessarily tied to budget deficits.

Total injections = total leakages, or

EXP + G + I = IMP + T + S

(G-T) = (IMP-EXP) + (S-I)

The Saving/Investment imbalance is private wealth accumulation that is in excess to private domestic wealth creation.

The (IMP-EXP), the trade deficit:

Official Account + Capital Account + Current Acct = 0.

Break up Current Acct,

Official Account + Capital Account + Net Income Inflows (+etc.) + (EXP-IMP) = 0

(IMP-EXP) = Official Account + Capital Account + Net Income Inflows

(G-T) = Official Account + Capital Account + Net Income Inflows + (S-I)

So the private wealth created by the public debt can either end up in the Central Bank (monetized), in the pockets of foreign holders of wealth, in the pockets of the domestic holders of wealth, or be, in effect, spending a net income windfall.

It doesn't automatically create the capital inflows.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.