The Charade That Deters the Use of “Direct Spending” to Fund Federal Operations


Naked Capitalism has the article The Charade That Deters the Use of “Direct Spending” to Fund Federal Operations.

In the article the author imagines a speech that Bernie Sanders could have given.

 I, Bernie Sanders, believe the primary purpose of the state, the strategic mission of the federal government, is to empower the basic units of our social fabric: our households, communities, and local economies. Big businesses and corporations can take care of themselves, and have much to offer and contribute—but it is only by nurturing the health and vigor of the basic units of our society that we can, in fact, create a more perfect union. And this is not a task that big business, pursuing corporate profits, is disposed or interested in undertaking.

In another part of the article, the author provides an interesting take on historically remembered era of great inflation.  The crudest definition of inflation is too many dollars (or whatever currency applies) chasing too few goods.

… historical analysis demonstrates that the root causes of hyper-inflation—the infamous Weimar Republic or Zimbabwe, for example—have not been caused by “money printing” but, instead, by the collapse of the production capabilities creating things for the money to buy.

In other words too few goods to supply the demand of too many dollars.  In fact it was Republicans, I believe,  who coined the term of supply side economics as a way of stopping the inflation that this country saw in the 1970s.  In other words fix the shortage of goods instead of controlling the excess of  dollars.  Of course, that is not actually how they stopped inflation.  They did it by bringing on the worst economic decline of consumer demand, up until then,  since the great depression.  That did in fact control the “excess” money.

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