Last week on the Debunking Economics podcast Phil and Steve talked about the likely imposition of Austerity 2.0 around the world, in particular in the UK. Steve said there’s really no need for it. This week he explains more about how cuts in the government deficit starves the private sector of cash, which will guarantee a recession, or worse. Listen in for an easy-to-follow explanation of how a government deficit increases money in circulation and how reducing that deficit shrinks the money supply. They talk about Wynne Godley’s explanation of sectoral balances, and how the interplay between government spending and private sector money is how the economy works now. The complicating factor, is foreign spending. What happens when government money finds itself overseas?
Related Articles

National Politics
John Mearsheimer – An Endgame for the Ukrainian War
It is now clear that Ukraine’s eagerly anticipated counteroffensive has been a colossal failure. After three months, the Ukrainian army has made little progress pushing back the Russians. Indeed, it has yet to get beyond […]

Economics
Jeffrey Sachs, Alexander Mercouris, Glenn Diesen – BRICS Meeting to Develop Multipolar World
19 September 2024

Economics
Pavlina Tcherneva, Thomas Piketty – Democratising Work
Thomas Piketty highlights the value of a Job Guarantee. He also speaks to the importance of property rights and political power (as discussed at: https://youtu.be/NCjt027KCG4) At the Global Forum on Democratizing Work in November 2021.
Be the first to comment