Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Display:
Krugman:
But don't we need to worry about government debt?

That question shouldn't be dismissed offhandedly.
In a monetary system with a central bank that acts as a lender of last resort bank lending is not limited by government created base money. So does issuing bonds to fund a government deficit lead to a change in effective demand relative to running unfunded deficits? I don't see how. So what is the point of selling bonds? And if there is none, why should past deficits play a role in determining the size of current deficits?

by generic on Sun Jun 6th, 2010 at 12:29:18 PM EST
[ Parent ]

Others have rated this comment as follows:

Display:

Top Diaries

Impeachment gets real

by ARGeezer - Jan 17
9 comments

A Final Warning

by Oui - Jan 10
96 comments

Environment Anarchists

by Oui - Jan 13
4 comments

More Spanish repression

by IdiotSavant - Jan 6
8 comments

Occasional Series