And I’ll tell you how I know we don’t need to balance the books. Because he could, in fact, fund government without doing so, and not deliver inflation, because there’s spare capacity in the economy, which means that inflation can’t happen for reason of running a deficit.
And how do I know there’s spare capacity in the economy? Because he thinks there’s room for growth. And if there’s room for growth, there is capacity that government spending could use, as well as the private sector, to deliver the growth he desires. So why does he want growth? I genuinely don’t know.
And with that his parp turns into fragrance.
Sigh.
There’s a difference between spare capacity given the current level of technology and increasing the productive capacity of the economy by changing the level of technology in use.
This is the most basic issue about economic growth. Krugman, here. Sure, it’s possible for there to be economic growth by using more inputs, more resources. And we can only do this if there are spare inputs, spare resources, available.
It’s also possible to have growth by using out inputs better. Adding more value from hte same inputs we’ve got available. That second is, more formally, increasing total factor productivity.
More inputs and only more inputs was the Soviet method of growth. TFP increases was the market economy method of growth. One estimate has it that 80% of GDP growth in the market economies in the 20th century came from that TFP increase.
Spud’s just denied, wholly and entirely, that TFP, efficiency, matters.
Cretin. Or ignorant, you decide.
It can also be true that an economy has capacity in areas where demand is already satisfied, while suffering a lack of capacity in expanding areas. To just add money in such a situation just leads to inflation.
All we need is ‘Elon Tusk’ back and the day will reach a nadir. The post is so barkingly mad (and long) that I won’t bore you with it. Suffice it to say he feels the Tsarmer government is obsessed with ‘goring the private sector’ at the expense of the public and that Trump won because all the money from Biden’s IRA went to the wealthy which made the poor people vote for Trump.
It’s a take too ludicrous to even attempt to fisk. It does come with ‘14 questions’ that Starmer has to answer…
Good God, Biden’s in with the Provos as well? What pies *doesn’t* he have fingers in?
Well, he is an Oirishman, to be sure, begorrah!
“More inputs and only more inputs was the Soviet method of growth.”
To be fair to the Soviets (yes they’ve already had lots of this), they were stealing or being given lots of stuff that had already had lots of people thinking up ways of growing TFP.
They may have thought there wasn’t anything more they could do, so working on adding inputs was the way to go.
This may have been accurate in 1920, but not 1950.