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Cebes wrote a new diary post: Progressive Need to Know
Here’s what Progressives should support: Elimination of the Debt Ceiling. The Debt Ceiling is a significant constraint on public purpose-deficit spending for policies and programs designed to reduce unemployment, insure the medically uninsured, educate for modern skills, develop effective renewable energy technologies, and pay down the national debt. This self imposed constraint on a fiat currency monetary system is [...]
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Cebes commented on the diary post $1 Million Dollar Prize! Can You Find Someone Who Holds the View That Steve Rattner Rants Against in the NYT? by Dean Baker.
Understanding why governments issue debt The fundamental principles that arise in a fiat monetary system are as follows. ■The central bank sets the short-term interest rate based on its policy aspirations. ■Government spending is independent of borrowing which the latter best thought of as coming after spending. ■Government spending provides the net financial assets (bank [...]
