Monthly Archives: August 2010

Deficit Spending 101 – Part 2

This post follows directly from “What the Government Budget Constraint (GBC) means.” In summary, we conclude from the above analysis that governments spend (introduce net financial assets into the economy) by crediting bank accounts in addition to issuing cheques or … Continue reading

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What the Government Budget Constraint (GBC) means

This is the second blog in the series that I am writing to help explain why we should not fear deficits. In this blog we clear up some of the myths that surround the so-called “financing” of budget deficits. In … Continue reading

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MMT: The accounting of government budget deficits

Econ 101 Imagine you and are the only two people in an economy. For the sake of argument, say we use sea shells as a currency and we trade with no one else but each other. So when we do … Continue reading

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Deficit spending 101 – Part 1

A lot of people E-mail and ask me to explain why we should not be worried about deficits and why they do not have to be financed by debt (even if the government does typically increase its debt when it … Continue reading

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National Economy: Accounting Algebra

The basic income-expenditure model in macroeconomics can be viewed in (at least) two ways: (a) from the perspective of the sources of spending; and (b) from the perspective of the uses of the income produced. Bringing these two perspectives (of … Continue reading

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