What vast public debt means presently

Several quality economists have said that the public debt is not too important anymore. That is a ponderous concept plainly. If money or debt is so elastic for the government then it might be a good idea to periodically lubricate the economic well being of the poor and down trodden yearning to be rich that live in this nation with a trillion or two now and then.

There is a marginal reserve rate that means a bank needs to have about 10% on deposit of the amount it loans out. Banks don’t need to loan out actual cash; in fact the amount of cash in circulation is very small percent of the dollars in circulation electronically. So if the Federal Reserve gives a zero or near zero interest loan of a few hundred billion dollars to the rich, the rich banks can mint 9 times that amount in real dollars electronically that are repaid with real dollars. In effect the Federal Reserve is continuously giving free money to the rich- north of 16 trillion dollars so far with quantitative easing and there is more than that that has been lent. Giving the poor a few crumbs of what goes to the rich is quite reasonable. Especially since the money goes to Americans who directly invest the money in the economy rather than sending it to some foreign nation (the rich are the ones sending direct investment in foreign nations like China).

It should be mentioned that the last dozen years of Republican presidential leadership experienced some of the greatest deficit spending in world history- they are not people with invariably good economic ideas for the public rather than for-themselves and in fact reinvented permanent Keynesian deficit spending for pump priming as a Lafferian supply-side way of life. Former VP Dick Cheney apparently believed that the private sector should plunder the public sector and Republicans have tended toward occasionally selling those $9000 gold-plated wrenches to the U.S. government. The poor seldom benefit from that high-level brand of piracy.

Economics shouldn’t require a degree in economics to well understand, yet it does. I have only read a few books on the topic and would like a better more simplified foundation for global sustainable economics that disambiguate topics like the meaning of public debt.





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