The Case for Locking Economists Away in Mental Homes
Modern economics is so crazy, we can’t tell when they’re trying to be funny.
Take the following 2019 article. On the one hand, Not-Even-Wrongness. On the other hand, the date is April 1st. Was it an “April Fool’s Day” prank?
But how can you tell? There really is a “Stephanie Kelton”. I used to think Universal basic income (UBI) was a prank, too.
Everything You Thought You Knew About Economics May Be Wrong
If the government tried to act like a private business collecting more dollars than it spends, it just leaves the rest of us with fewer dollars to save or spend into the economy. And that’s a pretty silly thing to do if you want healthy businesses and a healthy economy.
What in the world?! Dollars’ value lies in the exchange, and there is no known, knowable, optimum amount of them if you allow competing currencies.
The reason that China ends up with the U.S. dollar in the first place is because they are producing and sending more goods and services than we’re producing and sending to them. So in other words, China has a trade surplus and the U.S. runs a trade deficit with China. So they end up holding dollars and they have an option to convert those dollar deposits, which are essentially checking accounts at the Fed into securities accounts. Think of it like a savings account.
Trade surplus? Trade deficit? Read Rothbard on Protectionism! When will these wicked people stop recycling long-refuted crankery from centuries past?
What’s next, talk of a Mishlo’ach Manos trade deficit?!
And again:
Q. Scott Walker, the former Republican governor of Wisconsin, came out last week with plans to champion a federal balanced budget amendment to the Constitution. But from your perspective, a balanced budget wouldn’t actually be a good thing, right? Having no deficit at all would actually not be ideal from your point of view?
Kelton: Deciding in advance where you think the budget should come to rest is a terrible idea. In other words, you would never want to say that the proper size of the budget deficit or surplus or balance is three years or five years or even a year from now. Nobody knows what the answer to that question is.
That’s a terrible idea to think that you’re going to target the budget outcome. We should balance the economy not the budget. And right now we have a myriad of imbalances in our economy. We have an infrastructure deficit. We have a deficit in healthcare, massive income and wealth disparity, I could go on and on.
So I’m not interested in the Budget outcome, I’m interested in human and economic outcomes and the budget is the tool through which the government can address a range of problems in the economy. But the Budget outcome itself should never be the target of policy.
Well, if nobody knows what the budget should be, then nobody knows what the economy should be. Hmm, with such wise steering of the ship, I wonder where the “myriad of imbalances” came from?
Missy Kelton also mentions the “Clinton Surpluses”, a government hoax if there ever was one.
Truly everything they think they know about economics is Not Even Wrong.
