This class explains the public policy implications of the ensconced and dominant misunderstanding about government debt, taxes, and government spending. The US dollar is a sovereign currency, which means the government can print as much money as it desires and, therefore, can never go bankrupt. It also means that US government spending is not constrained by tax revenues; albeit, what constrains “money printing” from becoming inflationary is not the threat of “too much money floating around”; rather, it is the amount of natural resources, infrastructure, human know-how — meaning training/education/expertise — available in society when money is printed by the government. Print money without adequate resources and you get Zimbabwe and Weimar Germany. Print with adequate resources and you get the New Deal. This insight has profound implications for public policy, and it affects our understanding of the distribution of power between the government, the people and financial markets/ banks.
((Dan Bednarz - Tuesday - In-Person))
