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As an addendum…you suggest that if what I advocate for the economy worked, the US economy under President Obama would now be in good shape. As evidence for the fact that it is not, you point to the national debt being high.

This makes a number of faulty assumptions.

Firstly, the national debt’s size is not a good indicator of an economy’s health. The USA’s national debt is high by historic standards, but the market obviously believes that it has a much greater debt capacity than it is currently carrying. The evidence for this is that investors are happy to lend the US government money in exchange for an interest rate which is insufficient to compensate for projected inflation. In other words, investors are paying the US government for the privilege of lending it money. Under such circumstances, the US carrying a lot of debt really isn’t a big deal.

Secondly, I’m not sure you’re aware of this, but President Obama doesn’t actually write the budget. The House of Representatives does. The Obama stimulus, passed during the two years his party had control of Congress, was limited. Many economists argued that it was insufficient. Given sluggish rates of growth since then, I’m inclined to agree.

Once again, it’s important to note that the reason for slow growth is not the indebtedness of the public sector of the economy. In fact, the problem has much more to do with excessive private debt levels, which have hampered demand and created an output gap.

The private sector has been deleveraging, but the Republicans in the House of Representatives have made that much harder by attempting to restrict government deficit spending. Were the government to have embraced its ability to shoulder greater levels of debt, and invest in increasing the productive capacity of the economy, it’s conceivable that private sector deleveraging may have taken place at a faster rate than that which actually occurred.

In such a scenario, the deficit would have been closed from the other direction. Greater economic growth would have created more tax revenues, and public spending cuts would not have been necessary.

National debt fetishism represents a fundamental misperception about how economies actually function. You’ve illustrated that quite nicely. Presidents from across the political spectrum, from FDR on the left to Reagan on the right, have understood this well. Perhaps that’s because they were advised by actual economists, not spittle spraying lunatics such as yourself. How’s that for an ad hominem attack? I even do those better than you do.

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