I am not an economist

Sunday, January 11, 2009 by Dave Winer.

Even though I'm not an economist, I'm pretty sure that the US government can print money.  

So if we have a $1 trillion deficit this year, that does not imply that someone has to lend us $1 trillion and it does not imply therefore that someone will have to pay someone back that money at some date in the future. If there's an economist listening who thinks this is not true, please say so and everyone else ignore what I'm about to say. 

So then why does the discussion on Meet The Press and This Week revolve around how much better the private sector could spend the money or how we're passing on the problem to future generations. That seems like hooey. They have these discussions based on a make-believe premise that there are only two ways for the US government to pay for something -- taxation or borrowing. There is a third way, the one they're taking -- they just invent the money. 

Now, in normal times you pay for this invention with inflation, but inflation isn't a problem -- quite the opposite, the world economy is having a massive going out of business sale. Prices are going down. Think they're low this week? Wait till next week, they'll be even lower. And wait is what people do, and that drives the prices lower. It's like inflation in reverse. Worrying about inflation now is like a starving man worrying about getting fat if he eats too much. You'll take your calories any way you can get them. Anything that makes people want to buy things now is a good thing for the economy. One way to do that is to give them money by hiring them. 

So forgive me for thinking the analysts on TV are either corrupt or idiots, or whatever.  

And of course please forgive me if I'm wrong and the government isn't going to print money to get out of this hole.