Comments on: CNN Money Ranks Creates A Bailout Matrix, But Is It Right?

By: MLR

MLR — Fri, 18 Sep 2009 21:02:30 +0000

Under what assumption are we operating that says government debt must be paid down and can not be carried in perpetuity? (Not implying that it increases, though..) This is a deviation from the thread, though, so perhaps it isn't worth getting in to? .-= MLR´s last blog ..OMGz?! Job Hunt Drama (Comic #17) =-.

By: the weakonomist

the weakonomist — Fri, 18 Sep 2009 13:53:48 +0000

This does not imply a zero sum gain at all. All I am doing is reminding the reader that these programs were funded on borrowed money, and any profits to the government and the return of principal are not going to retire the debt. Eventually we will have to cover this growing deficit and national debt, it will be the taxpayer that has to do that.

By: MLR

MLR — Fri, 18 Sep 2009 04:59:31 +0000

Saying “and it must be paid back, by you.” makes it seem like a zero sum game. Obviously this isn’t the case in economics. Just because the government spends the money doesn’t mean we lose the money.

If the government money is sparking consumption and investment… then using a government multiplier shows you that it is not zero sum.

Just nit picking
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