Senator Bernie Sanders Identifies Robin Hood in Reverse 1

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The YouTube video is titled Robin Hood In Reverse.

I am disappointed that Bernie Sanders still talks as if reducing the debt and deficit were necessary for any rational reason. His Chief Economic Adviser, Stephanie Kelton, knows full well what baloney this is. Perhaps the two of them have gotten together and decided that the heads of the Republican Senators would explode if they were exposed to the truth.

See my previous post The Peterson Foundation Sings the Same Old Song. Here is one of the excerpts that I showed in that post.

So, the lower deficit Peterson approves of is close to or past putting the private sector into an aggregate annual loss position. And, in advocating for further deficit reduction, what Peterson is doing is advocating for placing the private sector into a much deeper and unsustainable loss position over a period of years. Doesn’t Peterson know that government deficits add to private sector aggregate net financial assets? Doesn’t he know that budgetary austerity will cause the private sector to lose financial wealth? Doesn’t he know that the deficit doesn’t harm the government’s capability to spend, but that cutting it does harm the private sector’s capability to spend by destroying private sector wealth over time?

Are any of my readers paying any attention?

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One thought on “Senator Bernie Sanders Identifies Robin Hood in Reverse”

  • SteveG Post author

    In response to my comment on YouTube about the Bernie Sanders’ video, I was asked a question.

    Blind Man Bert

    If we •happened• to find ourselves surpluses from FY2017 to FY2020, though, would that not be a good thing and not a bad one? The surplus could be plowed back into payment of interest on the debt and/or emergency funds perhaps. Perhaps I misunderstand the nuance of your post —could you elaborate? Not agreeing or disagreeing… trying to understand.

    This is how I answered.

    +Blind Man Bert, There is a train of thought that because technology is increasing productivity so fast these days that the private sector may not be able to create jobs fast enough to keep everyone employed. If that is true for any significant period of time, the government will have to run a deficit for this period of time in order to keep everyone employed.

    The other part of this understanding of the economy comes from dividing up the flow of money in this country as occurring among three pots. There is the government sector, the domestic private sector, and the foreign sector. Since our government is the sole creator of our money, the net flow of money between these three pots accounts for all the flow of money between pots. If we run a foreign trade deficit and the government does not run a deficit, then money must be draining from the domestic private sector. There is no other way for money to flow into the foreign sector. If this be the case, then money will flow out of the domestic private sector unless government runs a deficit large enough to cover the foreign trade deficit. Unless draining money out of the domestic private sector is needed for some good policy reason, then the government running a surplus is not good as long as we have a foreign trade deficit.