Sunday, March 21, 2010

James Galbraith "In Defense of Deficits"

James Galbraith speaks up against "one of the great misinformation campaigns of all time":
"To put things crudely, there are two ways to get the increase in total spending that we call 'economic growth.' One way is for government to spend. The other is for banks to lend. Leaving aside short-term adjustments like increased net exports or financial innovation, that's basically all there is. Governments and banks are the two entities with the power to create something from nothing. If total spending power is to grow, one or the other of these two great financial motors--public deficits or private loans--has to be in action." -- James K. Galbraith, "In Defense of Deficits", The Nation, 4 March 2010

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