“We must demonstrate a commitment to reducing long-term deficits, but not at the price of short-term growth. Without growth now, deficits will rise further and undermine future growth,” Larry Summers and Tim Geithner said in an open letter to the Wall Street Journal Wednesday.
Im stuck....through the Austrian Lens, how is this faulty?
http://www.cnbc.com/id/37842840/comid/2#comments_top
Sure, sounds great, doesn't it? But the question is, how is that short term growth gonna happen?
We all know what he means, printing money and giving it to his pals and/or to "poor" voters to spend it. But that doesn't cause short term growth. That causes short term SPENDING.
And that spending is going to HINDER future growth, make no mistake about it. For two reasons. A] The new printed money is going to make everyone poorer, also known as inflation. B] Giving money to the wrong people [those who cannot succeed without begging from the govt] maens they will gobble up resources. Meaning talented people won't have them available to use for growing their businesses.
That spending is not the same as growth should be obvious. I mean, if you spent all your money right now on pizza, how has your power to be productive increased?
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
Easy.
1) Consume pizza.
2) Gain pizza powers.
3) Conquer world.
At least, that's how the administration sees it.
Why are you looking for logic when these people speak?
He is saying that short term growth comes from deficit spending. We must deficit spend in the short term, this leads to long term growth. When long term growth arrives, we can cut the deficit, but not until the long term arrives. If we don't deficit spend now, deficits will grow bigger in the future. If we do deficit spend now, deficits will grow smaller in the future.
Why are you questioning whether is this is faulty? /sarcasm.
"The market is a process." - Ludwig von Mises, as related by Israel Kirzner. "Capital formation is a beautiful thing" - Chloe732.