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Monday, November 13, 2017

James Gailbraith combines a belief in perpetual motion machine with believe in there IS a free lunch in his economic advice

Dr. James Galbraith is the son of John Kenneth Galbraith and here the apple falls very close to the tree. See here for his  thoughts published in the Nation. Here is discussion of those comments as formulated by Dr.Paul Hsieh and published on line at Pajamamedia.com blog.

Here are the major points as Dr. Hsieh summarizes them:
  1. The political push to reduce government deficits is economically misguided, based on an irrational “phobia” of deficits.
  2. If we want economic growth, we need more spending. Only banks and governments can stimulate spending because (in his words): “Governments and banks are the two entities with the power to create something from nothing.”
  3. We shouldn’t worry about the alleged impending bankruptcy of Social Security or Medicare — or of the U.S. government itself. Why? Because the government is the source of money and therefore can’t run out.
  4. Government debt is not really a “burden on future generations,” because it never has to be repaid. Each generation can just pass that debt onto the next generation, so there’s no problem.

Think about what he said. Governments and banks can create something from nothing. Yes, I know that the government can "print money" and that banks create money in the fractional reserve banking system but you can't fool all of the people all of the time. The government and banks in Greece seem to have not understood that universal principle as they have made nothing out of something as they made tried to make something out of nothing Apparently the government in Greece has not consulted with Dr. Galbraith as they seemingly have run out of money. His perpetual motion money making machine is that you just keep rolling over debt which was the something that governments made out of nothing and there is no problem. So why did the Germans and the EU have to bail out Greece? Why could not the government just continued to make something from nothing?Why did we see hyper-inflation in Germany? Why are Not all countries made prosperous by this simple technique print more money and spend it.

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