Currency

  • 01.14.13

    Government Has Always Had The Power To Pay Its Bills

    In this article, Dr. Stephanie Kelton describes a shift in how many view debt in the U.S. She describes that initially, "everyone knew the government spent a lot of money and that money had to come from "somewhere", but most people assumed there were limits to how much the government could afford to spend." Howev...

    In this article, Dr. Stephanie Kelton describes a shift in how many view debt in the U.S.

    She describes that initially, "everyone knew the government spent a lot of money and that money had to come from "somewhere", but most people assumed there were limits to how much the government could afford to spend."

    However, the government does not function like an individual: "The United States is already the issuer of the currency. It isn't like a household or a private business. It can always pay."

    Kelton ends the article with the reminder that we should think of the government's spending differently and that our fears of falling further into deficit, while appropriate for an individual, do not necessarily apply to the U.S. government.

     

    Tags: Debt, Currency