Friday, May 14, 2010

Jamie Galbraith talks sense

One of the reasons I get so damn frustrated with the foolishness of today's "economists" is that when I came through the system, virtually every practicing economist thought as Galbraith does in this interview.  Of course, those were the days when the economy actually worked for most folks in USA.

Some highlights.
Government does not need money to spend just as a bowling alley does not run out of points.
What people worry about is that the federal government won't be able to buy bonds. But there can never be a problem for the federal government selling bonds. It goes the other way. The government's spending creates the bank's demand for bonds, because they want a higher return on the money that the government is putting into the economy. My father said this process is so simple that the mind recoils from it.
Share of health-care cost would rise as part of total GDP and the inflation would rise to be nearer to what the rate of health-care inflation is. And if health care does get that expensive, and we're paying 30 percent of GDP while everyone else is paying 12 percent, we could buy Paris and all the doctors and just move our elderly there.
we should be focusing on real problems and not fake ones. We have serious problems. Unemployment is at 10 percent. if we got busy and worked out things for the unemployed to do, we'd be much better off. And we can certainly afford it. We have an impending energy crisis and a climate crisis. We could spend a generation fixing those problems in a way that would rebuild our country, too. On the tax side, what you want to do is reverse the burden on working people.

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