As the so-called federal deficit is thrashed about, it's critically important that the ideas here be brought into the conversation. Selise originally published this diary, but it didn't grab the attention it deserves. (see: http://www.dailykos.com/...)
I'm re-posting it under a new title.
Most of the text is by James K. Galbraith and L. Randall Wray. It's based upon the concepts of Modern Monetary Theory (MMT). The diary covers three topics: The economics; the politics; and the banksters and you.
The Economics:
James K. Galbraith: In Defense of Deficits
... a big deficit-reduction program would destroy the economy, or what remains of it, two years into the Great Crisis.
For this reason, the deficit phobia of Wall Street, the press, some economists and practically all politicians is one of the deepest dangers that we face. It's not just the old and the sick who are threatened; we all are. To cut current deficits without first rebuilding the economic engine of the private credit system is a sure path to stagnation, to a double-dip recession--even to a second Great Depression. To focus obsessively on cutting future deficits is also a path that will obstruct, not assist, what we need to do to re-establish strong growth and high employment.
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