Did the debt ceiling deal really save the US from bankruptcy?

YouTube has the video Did the debt ceiling deal really save the US from bankruptcy?.

Economists Radhika Desai and Michael Roberts discuss the US debt ceiling deal reached by President Joe Biden and the Republican opposition, and what it means for the future of the economy

This focuses on what the government should be funding. They also seem to take leave of their senses when they talk about government borrowing. They seem to completely forget all they know about modern money theory. In discussing the private banks’ trouble with rising interest rates. they do not make clear that it is the rising of interest rates that decreases the value of the banks’ bond holdings. Many people do not know that the relation between interest rates and the value of existing bonds is an inverse relation. If you think both things rise together, you make very bad policy decisions. They also make no mention of how much the Federal Reserve Bank spends to buy Treasury securities. This throws off their discussion of government borrowing completely out of whack. May be they should talk about the whack deficit in this discussion.

I just cannot stand to watch any more of this crap. If these people cannot get the economics right, why are they even on the air? Notice that Michael Hudson is not present to try to bring this discussion back to reality.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.