WBUR aired this program Brown, Warren Offer Different Deficit-Reduction Approaches by Fred Thys.
This just goes to show you what happens when you let a reporter who knows nothing about economics report on economic matters. I expect a public broadcasting station to educate me, not to dumb me down.
I won’t even put the audio on this blog, You’ll have to click the link above to hear it. However, I must warn you that your brain might rot if you listed to it. If you aren’t careful, you will come away knowing less than you did before you listened.
My comment on their web site is as follows:
This has to be one of the silliest stories I have heard in a long time. The commentator obviously knows nothing about economics. He makes no comment about the fact that Brown’s prescriptions show a total lack of understanding of the economics of a national economy like the United States’ economy. Brown goes on and on about how the first stimulus did not work, when it did. Where is the money for the spending going to come from – the Fed of course. We are sovereign in our own currency, so if the Fed says there is more money in the economy, they just make it so. Private institutions that lend their depositors or investors money also create money. The fact that these private entities are holding on to their money instead of investing it, takes money out of the economy. That is what the idea of stimulus is all about. The stimulus money puts money into the economy and also draws out the money being withheld by the private sector.
When the country lost trillions of dollars in stock value when the market crashed, do you think someone actually goes out and burns up a pile of money? When the market recovers, as it has done quite well since 2009, do you think someone is actually putting the ashes back together?
Brown clearly understands nothing of this. Or at least he pretends not to understand. When other Republicans spout such nonsense, I can believe some of them are pretending. In Brown’s case, I fear he may actually believe this stuff.
What this says about the WBUR commentator, I really have to wonder.
Please do not let your children listen to WBUR without your presence to offset anything they hear.
I should also point to some other sources for the money that I failed to mention in my comments on the WBUR web site.
The federal government can say to wealthy individuals, “If you aren’t going to put your money into the economy, then give it back to us, and we will put it into the economy.”
Getting the money back from the wealthy can take several forms. One form is to issue government bonds and notes, so that the wealthy lend us their idle cash, and we put it to good use in creating jobs and investing in the future of the economy.
The other way, is to raise the taxes on the wealthy, (or rescind tax cuts). If they aren’t investing that money in the economy, then giving them tax breaks to keep more money is obviously not helping. This method of raising money does not raise the government debt, and the new taxation rate will put us on a path to surpluses when the economy recovers.
Just think, a lot of the money that the wealthy are withholding from productive uses is going into non-productive financial derivatives. To put it another way, the wealthy have so much money, they don’t know what to do with it all. So they have taken to gambling in financial markets for fun and profits. If they lose a bet, they stop having fun, and we have to pay for it in the sick economy their losses bring on.