Seven Deadly Innocent Frauds of Economic Policy

Seven Deadly Innocent Frauds of Economic Policy is a book written by Warren Mosler.

For those who are tempted to think, “Oh no, another deadly dreary economics book that I won’t be able to understand”, here are some words from the beginning of the book.

In the next few moments of reading, it will all be revealed to you with no theory and no philosophy- just a few hard cold facts.

Before you get to the book, you may want to know what an innocent fraud is. Here is the book’s explanation.

The term “innocent fraud” was introduced by Professor John Kenneth Galbraith in his last book, The Economics of Innocent Fraud, which he wrote at the age of ninety-four in 2004, just two years before he died. Professor Galbraith coined the term to describe a variety of incorrect assumptions embraced by mainstream economists, the media, and most of all, politicians.

From the overview of the book, I give you the list of the seven frauds that Mosler discusses.

  1. The government must raise funds through taxation or borrowing in order to spend. In other words, government spending is limited by its ability to tax or borrow.
  2. With government deficits, we are leaving our debt burden to our children.
  3. Government budget deficits take away savings.
  4. Social Security is broken.
  5. The trade deficit is an unsustainable imbalance that takes away jobs and output.
  6. We need savings to provide the funds for investment.
  7. It’s a bad thing that higher deficits today mean higher taxes tomorrow.

Once you understand these things for the frauds that they are, you can free yourself from the tyranny of the oligarchs who control both of our political parties. Then we can get on to the business of saving this country from disaster for the non-oligarchs. There are more of us than there are of them, so it is for the good of the country as a whole to make life livable for the non-oligarchs. The oligarchs will lose some of their power, but I think they will still do alright for themselves.

The only thing that can really hurt the oligarchs is for them to get carried away to the point where the rest of society revolts. This revolution will really do the oligarchs in like what happened in the French Revolution and the Russian Revolution. We would be doing the oligarchs a favor by regaining control peacefully so that they can continue to live the good life with just a little less of the goods.

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