MMP Blog #52: Conclusion: The Nature of Money
Let us close this blog and this Primer with an examination of three propositions on the nature of money. This has been a long and difficult blog. You might need to read it twice. Or three times.
Let us close this blog and this Primer with an examination of three propositions on the nature of money. This has been a long and difficult blog. You might need to read it twice. Or three times.
Since government deficits create an equivalent amount of nongovernment savings, it is impossible for the government to face an insufficient supply of savings.
It is best to think of the net saving of the nongovernment sector as a consequence of the government’s deficit spending—which creates income and savings.
There are often two objections to the claim that government spending effectively takes place by simultaneously crediting the recipient’s bank account as well as the bank’s reserves.
Let us now begin to examine in more detail the government’s budget and impacts on the nongovernment sector.