Will Richardson I think a more accurate term would be "Govt Sector" not "Public Sector", as the Govt has the account at the Fed, not the Public, nor does the money come from the Public (though that number will be influenced by taxes).
Can someone explain it to me why government deficits is not always bad? Like i get the idea thats the way the private sector will flourished but how.. if someone could explain the mechanism. Thanks
When the government spends, it adds money to the economy (more specifically, it adds financial assets to people's balance sheets). When the government taxes, it removes money from the economy (removes financial assets from private balance sheets).
@@deficitowls5296 And if money were the important thing, that would be relevant, but it's not. We can run an economy with any amount of money so long as it's sufficiently divisible. We could run the economy with one-half, one-third, or 1/100th the amount of money we have and have the exact same financial situation other than all the numbers would change. It doesn't change what assets and liabilities exist, and creating money doesn't create wealth.
@@deficitowls5296 Since the deficits are accumulating over time... Does it mean we will face a time when we need to start cancelling our debts? I believe it's what has been done in the past long long time ago.
@@K1989L if you mean cancelling like paying back - no if you mean cancelling like deleting them from the book - we could, it would make things easier but we could also live on with them as the state cannot go bankrupt.
Lets assume that the government balanced its budget every year, and no other country existed. The private sector money supply could still grow through the private banking sector. They would just need reserves to cover the minimum reserve ratio. But these funds could either be created by the Fed or borrowed from the Fed, in either case a balance sheet expansion, and not government spending. The private sector could grow and technically be balanced as well (no surplus or deficit), but why would this matter? There would still be people who could save, then spend later in life, so over the course of their entire life they would be a net zero. Or one person that saves, and another that consumes. It still ends up at zero. So not really much different then what we have now. I don't see how sectoral balances have any "real" effect. Government deficit spending is only beneficial if it utilizes the slack capacity in the economy. Once that slack is productive, it can add wealth to society. So a private sector surplus is only useful to that degree. You could also have a private sector surplus if the government just handed everyone free money. But if that money is squandered then the surplus accomplished nothing. If anything it caused harm. Am I misunderstanding anything here?
It's true that if every person ran a net zero over the course of their life, then we wouldn't need private sector surpluses. But they don't do that. People generally want to save to pass on to their children, who then continue to grow this wealth. Somebody's net savings desire is always fulfilled by somebody else's debts. If the private sector as a whole is balanced, then the savings desires of some in the private sector are being fulfilled by borrowing of others in the private sector. If there is a net positive long-term savings desire in the private sector (which there is), then this implies a permanently and obviously unsustainable increasing level of private debt. A private sector deficit would be even more extreme, with the savings desires of some being more than offset by the dis-saving and increased debts of others. So, what sectoral balances do is provide indications of fragility.
Thanks for the response! When you say "savings" are you referring purely to government money, i.e. liquid savings in an account somewhere? Because wealth can also be created through private bank money. For example, owning a house, or owning financial assets. It makes sense that people want to pass savings on to their children, but the idea is to eventually consume those resources. If every generation just keeps saving forever, then that money will never be spent, and hence the act of saving is meaningless. At some point it must be consumed, or else people are wasting productive resources for nothing. And so even this would become a net zero on a long enough time horizon. Lets say we lived in a world where there was no government sector, because the private sector was fully responsible, efficient, and well organized. The only need for "liquid" cash/money would be as an intermediate/temporary step between the sale and acquisition of real goods and services. I imagine there could be private institutions that create the reserves at an almost zero interest rate (small fee to keep them in business, similar to how government has an operational cost, but money creation would essentially be fully privatized), and that would serve as "cash" until you acquired a real good or service. Of course this cash would based on existing assets and in limited amounts to facilitate transactions, and would serve a similar purpose as government reserves. I guess what I'm getting at is that the liquid money supply can be expanded and contracted as purely a balance sheet operation and not as surplus or deficit spending. You mentioned an unsustainable increasing level of private debt if there is a net-positive long term savings desire. But in the hypothetical scenario I just laid out above, it doesn't seem like this would be an issue unless people started saving "too much" in which case the private bank could respond by altering interest rates to punish them for holding on to cash that wasn't being productively utilized. If a lot of the savings households are accumulating based on government deficits end up being unproductive or wasted money, then I see that causing serious long-term problems.
By "savings" I'm referring to accumulations of financial assets. The difference between bank money and government-issued assets is that the latter is "net financial assets" for the non-government sector. That is, it is a financial asset in the hands of the non-government sector which is not matched by a liability in the non-government sector. I find your second paragraph, about all savings eventually being spent, to be bizarrely counter-factual and confusing. "If every generation just keeps saving forever, then that money will never be spent, and hence the act of saving is meaningless. At some point it must be consumed..." No, I don't think so. Your second sentence here does not follow from the first. I think it's pretty obvious, both from personal experience and historical experience, that lots of money never gets spent. To say that the money eventually gets spent is to imply that there is some generation that will not pass on anything to the following one. Which generation is going to be the one to do that? Yours? Mine? "The only need for "liquid" cash/money would be as an intermediate/temporary step between the sale and acquisition of real goods and services..." What you're basically getting at here is, why don't people just barter? In fact, I'd say this is the wrong angle to attack the question. All available historical evidence (and a lot of theory to go with it) shows that barter has never been important to the development of economies. Money does not emerge from barter, and no society has ever used barter as its primary way or organizing exchange. For more on that, see here: ua-cam.com/video/REbrKOjsG2A/v-deo.html. This would be merely historical curiosity, were it not for exactly what you are doing: using the barter story to organize your thinking about the monetary economy. If the barter story is actually false, then there's no logical basis for you doing this. "I guess what I'm getting at is that the liquid money supply can be expanded and contracted as purely a balance sheet operation and not as surplus or deficit spending." There's only two ways to get money out: spend it, or lend it. Your story just emphasizes the lending aspect. There's an obvious problem with lending money into existence: if people want to accumulate money, then that implies that debt increases. "unless people started saving "too much" in which case the private bank could respond by altering interest rates to punish them for holding on to cash" - Setting aside that I don't think this would actually work...what would be the reason to do this? Why not just have somebody spend money into existence, to allow for savings desires? "If a lot of the savings households are accumulating based on government deficits end up being unproductive or wasted money, then I see that causing serious long-term problems." The issue of whether or not government spending is a good use of resources is totally separate from the issue of deficits and savings desires. Government spending can be useful or wasteful regardless of the size of the deficit. The right way to do it is this: government spending should set at the level necessary to accomplish whatever it is that we think the government should do. There should be political mechanisms to ensure that these are being done with minimal wasted resources. THEN, the level of taxes should be set so as to create the right size deficit to allow savings desires to be fulfilled*. Totally separate issues. * - Technically, this approach is only going to get you close, it can't get exactly there, because the level of savings desires changes often, so you need an automatic stabilizer to ensure that the size of the deficit is always the correct one. That stabilizer is the Job Guarantee. But even with the JG, the principle is still the same: you'd set non-JG spending to be whatever the correct level is for the political tasks to accomplish, then you institute a JG, then you lower taxes until the number of people actually working in the JG is small.
My point about saving and not spending is this: If each generation saves $10 for the next, then by generation 5 you have $50 accumulated. That money is getting bigger and just sitting there doing nothing. That is money that was traded for labor, to produce real things, but isn’t being recirculated back in to the economy. The only legitimate purpose of money in my view is as a medium of exchange, to sell and acquire final goods and services. Yes there is a need to save money for a period of time until you can funnel it in to something productive, but not indefinitely. If it’s held outside the economy indefinitely, it’s the same as burning it. Please let me know if I’m understanding your point correctly about bartering. I’m looking at money as a medium of exchange, but you’re saying that humanity as a whole tends to value money in and of itself, and that that pattern tends to emerge first and foremost? “There's only two ways to get money out: spend it, or lend it. Your story just emphasizes the lending aspect. There's an obvious problem with lending money into existence: if people want to accumulate money, then that implies that debt increases”. This is true, but even when the government spends, the money you’re getting was originally created out of debt. All money is debt. Whatever excess savings the private sector has is offset by the exact same amount in debt in the government sector. And thus would be the same if both the savings and debt were both created in the private sector, and both offset each other to zero. Let’s say the government didn’t exist, and there was a private institution that acted much like the Fed. What they would do is deposit near 0% interest money in to every person’s account equal to 10% of their assets (or some other ratio that resembles a reserve ratio) at no term limit. So this would be both savings and debt simultaneously. No spending was involved on the part of the private institution. The extremely small interest rate would be purely to pay for the administrative costs of running the organization. This 10% liquid cash would facilitate the same purpose as government deficits fueling private savings. It would also limit people’s ability to hoard cash for no legitimate reason. You would still accumulate assets and equity as real value was created in society. “Why not just have somebody spend money into existence, to allow for savings desires?” The private institution I described above would do the same thing, except just give people the funds instead of spending on projects that may or may not be beneficial. The private sector would be responsible for managing society and organizing itself correctly. I think I’m basically trying to explain an alternative way of providing the same service the government’s monetary system does, except through private means.
"The only legitimate purpose of money in my view is as a medium of exchange, to sell and acquire final goods and services... Please let me know if I’m understanding your point correctly about bartering. I’m looking at money as a medium of exchange, but you’re saying that humanity as a whole tends to value money in and of itself, and that that pattern tends to emerge first and foremost?" - I would say that this "medium of exchange" thinking arises from structuring your thoughts around the barter story. If the barter story is false, then there's no basis for it. Yes, money functions as a medium of exchange, but the history (and new theory) emphasize the unit of account and means of payment functions first and foremost. Credit is older than "money," and therefore accumulating claims on other people pre-dates money's use as a medium of exchange. There's no basis for just assuming that money always eventually gets spent. We know from experience that it does not. "This is true, but even when the government spends, the money you’re getting was originally created out of debt. All money is debt" - I agree, but there's still a difference. If the money is spent into existence, then there's just one debt (the money itself) matched by one asset (of the person who's holding the money). If the money is lent into existence, then there are two debts (one is the money itself, the other is the promise to repay the money in the future) matched by two assets (one held by the person who's holding the money, the other held by the money-issuer who's expecting the money to be repaid (into nothingness) in the future). These two debts are different in significant ways. While the money-debt is merely a promise to accept (as in, the government promises to accept its own currency when accepting payments), the loan of money is additionally a promise to pay (the borrower promises to make a payment in the future). That's harder to do. " I think I’m basically trying to explain an alternative way of providing the same service the government’s monetary system does, except through private means." - See, I think you're looking at the thing backwards. The MMT perspective is to start with the government: why is the government doing this? The question that the government has to figure out an answer to is, how can it get ahold of the real resources that it needs to do the job of governing? As in, the government needs judges, soldiers, buildings, cars, computers, fuel, etc. in order to do the things that we want it to do, like run a legal system and win wars. How does it get that stuff? There are a variety of potential ways to answer this question. One way might be to ask for volunteers. The obvious downside there is that it mostly doesn't work. Another way might be to simple conscript everything, or press people into the Navy like the British used to do. That has some fairly obvious downsides too. The way we do it today is that the government creates a tax-driven money. That is, the government forces everybody into debt to it (ie imposes taxes on people), and declares that these debts (the taxes) can only be paid in one way: using the government's own IOU. And the only way to get those IOUs is to deliver goods and labor to the government, the goods and labor that the government needs to do whatever it's supposed to do. If there is no private desire to accumulate the money the government is issuing, then the government simply won't be able to spend more than the people need to pay the tax, and so there will be balanced budgets. On the other hand, if there is a private desire to accumulate that money, then the government will be able to accomplish the same amount of spending using a smaller tax. The medium-of-exchange story primes us to view government deficits as a bad thing, but through this lens they're pretty obviously a good thing: the government is still getting done what it needs to get done, the people face a smaller tax burden, and they accumulate the savings that they desire. If the people have savings desires but the government refuses to accommodate those desires (by lowering taxes), then there will be unemployment in the economy. So, it doesn't make very much sense for the government not to accommodate these desires.
what he failed to mention was the fact, that though this logic may be defied by open national economies that run current account surpluses, it still holds for the global economy which is closed by definition. Beggar-thy-neighbor has never achieved peaceful coexistence of countries! And the only way to seemingly evade the necessity for gov deficits is to impose even more detrimental accounting constrains on other countries by practicing Neomercantilism
@@Basta11 that's exactly the passage I originally addressed with this comment. He only spoke of the possibility to avoid the zero-sum logic in a local national economy by letting other national economies run deficits. That's called beggin-thy-neighbor and doesn't solve the zero-sum logic globally. it's the same problem as within a closed economy, it merely generates a veil of ignorance for the layman's eye by stratifying a global closed economy into various national groups that run surpluses and corresponding deficits with each other. None of this was addressed in the passage you cited to which I originally responded ;)
For the private sector to live within it's means, the public sector has to run a deficit.
Will Richardson
I think a more accurate term would be "Govt Sector" not "Public Sector", as the Govt has the account at the Fed, not the Public, nor does the money come from the Public (though that number will be influenced by taxes).
Can you enlist the assets covered under "Savings" or Private Surplus ? Is it just money and government bonds?
Can someone explain it to me why government deficits is not always bad? Like i get the idea thats the way the private sector will flourished but how.. if someone could explain the mechanism. Thanks
When the government spends, it adds money to the economy (more specifically, it adds financial assets to people's balance sheets). When the government taxes, it removes money from the economy (removes financial assets from private balance sheets).
@@deficitowls5296 And if money were the important thing, that would be relevant, but it's not. We can run an economy with any amount of money so long as it's sufficiently divisible. We could run the economy with one-half, one-third, or 1/100th the amount of money we have and have the exact same financial situation other than all the numbers would change. It doesn't change what assets and liabilities exist, and creating money doesn't create wealth.
@@deficitowls5296 Since the deficits are accumulating over time... Does it mean we will face a time when we need to start cancelling our debts? I believe it's what has been done in the past long long time ago.
@@K1989L if you mean cancelling like paying back - no
if you mean cancelling like deleting them from the book - we could, it would make things easier
but we could also live on with them as the state cannot go bankrupt.
Lets assume that the government balanced its budget every year, and no other country existed. The private sector money supply could still grow through the private banking sector. They would just need reserves to cover the minimum reserve ratio. But these funds could either be created by the Fed or borrowed from the Fed, in either case a balance sheet expansion, and not government spending. The private sector could grow and technically be balanced as well (no surplus or deficit), but why would this matter? There would still be people who could save, then spend later in life, so over the course of their entire life they would be a net zero. Or one person that saves, and another that consumes. It still ends up at zero. So not really much different then what we have now.
I don't see how sectoral balances have any "real" effect. Government deficit spending is only beneficial if it utilizes the slack capacity in the economy. Once that slack is productive, it can add wealth to society. So a private sector surplus is only useful to that degree. You could also have a private sector surplus if the government just handed everyone free money. But if that money is squandered then the surplus accomplished nothing. If anything it caused harm.
Am I misunderstanding anything here?
It's true that if every person ran a net zero over the course of their life, then we wouldn't need private sector surpluses. But they don't do that. People generally want to save to pass on to their children, who then continue to grow this wealth.
Somebody's net savings desire is always fulfilled by somebody else's debts. If the private sector as a whole is balanced, then the savings desires of some in the private sector are being fulfilled by borrowing of others in the private sector. If there is a net positive long-term savings desire in the private sector (which there is), then this implies a permanently and obviously unsustainable increasing level of private debt. A private sector deficit would be even more extreme, with the savings desires of some being more than offset by the dis-saving and increased debts of others. So, what sectoral balances do is provide indications of fragility.
Thanks for the response! When you say "savings" are you referring purely to government money, i.e. liquid savings in an account somewhere? Because wealth can also be created through private bank money. For example, owning a house, or owning financial assets.
It makes sense that people want to pass savings on to their children, but the idea is to eventually consume those resources. If every generation just keeps saving forever, then that money will never be spent, and hence the act of saving is meaningless. At some point it must be consumed, or else people are wasting productive resources for nothing. And so even this would become a net zero on a long enough time horizon.
Lets say we lived in a world where there was no government sector, because the private sector was fully responsible, efficient, and well organized. The only need for "liquid" cash/money would be as an intermediate/temporary step between the sale and acquisition of real goods and services. I imagine there could be private institutions that create the reserves at an almost zero interest rate (small fee to keep them in business, similar to how government has an operational cost, but money creation would essentially be fully privatized), and that would serve as "cash" until you acquired a real good or service. Of course this cash would based on existing assets and in limited amounts to facilitate transactions, and would serve a similar purpose as government reserves. I guess what I'm getting at is that the liquid money supply can be expanded and contracted as purely a balance sheet operation and not as surplus or deficit spending.
You mentioned an unsustainable increasing level of private debt if there is a net-positive long term savings desire. But in the hypothetical scenario I just laid out above, it doesn't seem like this would be an issue unless people started saving "too much" in which case the private bank could respond by altering interest rates to punish them for holding on to cash that wasn't being productively utilized.
If a lot of the savings households are accumulating based on government deficits end up being unproductive or wasted money, then I see that causing serious long-term problems.
By "savings" I'm referring to accumulations of financial assets. The difference between bank money and government-issued assets is that the latter is "net financial assets" for the non-government sector. That is, it is a financial asset in the hands of the non-government sector which is not matched by a liability in the non-government sector.
I find your second paragraph, about all savings eventually being spent, to be bizarrely counter-factual and confusing. "If every generation just keeps saving forever, then that money will never be spent, and hence the act of saving is meaningless. At some point it must be consumed..." No, I don't think so. Your second sentence here does not follow from the first. I think it's pretty obvious, both from personal experience and historical experience, that lots of money never gets spent. To say that the money eventually gets spent is to imply that there is some generation that will not pass on anything to the following one. Which generation is going to be the one to do that? Yours? Mine?
"The only need for "liquid" cash/money would be as an intermediate/temporary step between the sale and acquisition of real goods and services..." What you're basically getting at here is, why don't people just barter? In fact, I'd say this is the wrong angle to attack the question. All available historical evidence (and a lot of theory to go with it) shows that barter has never been important to the development of economies. Money does not emerge from barter, and no society has ever used barter as its primary way or organizing exchange. For more on that, see here: ua-cam.com/video/REbrKOjsG2A/v-deo.html. This would be merely historical curiosity, were it not for exactly what you are doing: using the barter story to organize your thinking about the monetary economy. If the barter story is actually false, then there's no logical basis for you doing this.
"I guess what I'm getting at is that the liquid money supply can be expanded and contracted as purely a balance sheet operation and not as surplus or deficit spending." There's only two ways to get money out: spend it, or lend it. Your story just emphasizes the lending aspect. There's an obvious problem with lending money into existence: if people want to accumulate money, then that implies that debt increases.
"unless people started saving "too much" in which case the private bank could respond by altering interest rates to punish them for holding on to cash" - Setting aside that I don't think this would actually work...what would be the reason to do this? Why not just have somebody spend money into existence, to allow for savings desires?
"If a lot of the savings households are accumulating based on government deficits end up being unproductive or wasted money, then I see that causing serious long-term problems." The issue of whether or not government spending is a good use of resources is totally separate from the issue of deficits and savings desires. Government spending can be useful or wasteful regardless of the size of the deficit. The right way to do it is this: government spending should set at the level necessary to accomplish whatever it is that we think the government should do. There should be political mechanisms to ensure that these are being done with minimal wasted resources. THEN, the level of taxes should be set so as to create the right size deficit to allow savings desires to be fulfilled*. Totally separate issues.
* - Technically, this approach is only going to get you close, it can't get exactly there, because the level of savings desires changes often, so you need an automatic stabilizer to ensure that the size of the deficit is always the correct one. That stabilizer is the Job Guarantee. But even with the JG, the principle is still the same: you'd set non-JG spending to be whatever the correct level is for the political tasks to accomplish, then you institute a JG, then you lower taxes until the number of people actually working in the JG is small.
My point about saving and not spending is this: If each generation saves $10 for the next, then by generation 5 you have $50 accumulated. That money is getting bigger and just sitting there doing nothing. That is money that was traded for labor, to produce real things, but isn’t being recirculated back in to the economy. The only legitimate purpose of money in my view is as a medium of exchange, to sell and acquire final goods and services. Yes there is a need to save money for a period of time until you can funnel it in to something productive, but not indefinitely. If it’s held outside the economy indefinitely, it’s the same as burning it.
Please let me know if I’m understanding your point correctly about bartering. I’m looking at money as a medium of exchange, but you’re saying that humanity as a whole tends to value money in and of itself, and that that pattern tends to emerge first and foremost?
“There's only two ways to get money out: spend it, or lend it. Your story just emphasizes the lending aspect. There's an obvious problem with lending money into existence: if people want to accumulate money, then that implies that debt increases”. This is true, but even when the government spends, the money you’re getting was originally created out of debt. All money is debt. Whatever excess savings the private sector has is offset by the exact same amount in debt in the government sector. And thus would be the same if both the savings and debt were both created in the private sector, and both offset each other to zero. Let’s say the government didn’t exist, and there was a private institution that acted much like the Fed. What they would do is deposit near 0% interest money in to every person’s account equal to 10% of their assets (or some other ratio that resembles a reserve ratio) at no term limit. So this would be both savings and debt simultaneously. No spending was involved on the part of the private institution. The extremely small interest rate would be purely to pay for the administrative costs of running the organization. This 10% liquid cash would facilitate the same purpose as government deficits fueling private savings. It would also limit people’s ability to hoard cash for no legitimate reason. You would still accumulate assets and equity as real value was created in society.
“Why not just have somebody spend money into existence, to allow for savings desires?” The private institution I described above would do the same thing, except just give people the funds instead of spending on projects that may or may not be beneficial. The private sector would be responsible for managing society and organizing itself correctly. I think I’m basically trying to explain an alternative way of providing the same service the government’s monetary system does, except through private means.
"The only legitimate purpose of money in my view is as a medium of exchange, to sell and acquire final goods and services... Please let me know if I’m understanding your point correctly about bartering. I’m looking at money as a medium of exchange, but you’re saying that humanity as a whole tends to value money in and of itself, and that that pattern tends to emerge first and foremost?" - I would say that this "medium of exchange" thinking arises from structuring your thoughts around the barter story. If the barter story is false, then there's no basis for it. Yes, money functions as a medium of exchange, but the history (and new theory) emphasize the unit of account and means of payment functions first and foremost. Credit is older than "money," and therefore accumulating claims on other people pre-dates money's use as a medium of exchange. There's no basis for just assuming that money always eventually gets spent. We know from experience that it does not.
"This is true, but even when the government spends, the money you’re getting was originally created out of debt. All money is debt" - I agree, but there's still a difference. If the money is spent into existence, then there's just one debt (the money itself) matched by one asset (of the person who's holding the money). If the money is lent into existence, then there are two debts (one is the money itself, the other is the promise to repay the money in the future) matched by two assets (one held by the person who's holding the money, the other held by the money-issuer who's expecting the money to be repaid (into nothingness) in the future). These two debts are different in significant ways. While the money-debt is merely a promise to accept (as in, the government promises to accept its own currency when accepting payments), the loan of money is additionally a promise to pay (the borrower promises to make a payment in the future). That's harder to do.
" I think I’m basically trying to explain an alternative way of providing the same service the government’s monetary system does, except through private means." - See, I think you're looking at the thing backwards. The MMT perspective is to start with the government: why is the government doing this? The question that the government has to figure out an answer to is, how can it get ahold of the real resources that it needs to do the job of governing? As in, the government needs judges, soldiers, buildings, cars, computers, fuel, etc. in order to do the things that we want it to do, like run a legal system and win wars. How does it get that stuff?
There are a variety of potential ways to answer this question. One way might be to ask for volunteers. The obvious downside there is that it mostly doesn't work. Another way might be to simple conscript everything, or press people into the Navy like the British used to do. That has some fairly obvious downsides too. The way we do it today is that the government creates a tax-driven money. That is, the government forces everybody into debt to it (ie imposes taxes on people), and declares that these debts (the taxes) can only be paid in one way: using the government's own IOU. And the only way to get those IOUs is to deliver goods and labor to the government, the goods and labor that the government needs to do whatever it's supposed to do.
If there is no private desire to accumulate the money the government is issuing, then the government simply won't be able to spend more than the people need to pay the tax, and so there will be balanced budgets. On the other hand, if there is a private desire to accumulate that money, then the government will be able to accomplish the same amount of spending using a smaller tax. The medium-of-exchange story primes us to view government deficits as a bad thing, but through this lens they're pretty obviously a good thing: the government is still getting done what it needs to get done, the people face a smaller tax burden, and they accumulate the savings that they desire.
If the people have savings desires but the government refuses to accommodate those desires (by lowering taxes), then there will be unemployment in the economy. So, it doesn't make very much sense for the government not to accommodate these desires.
what he failed to mention was the fact, that though this logic may be defied by open national economies that run current account surpluses, it still holds for the global economy which is closed by definition. Beggar-thy-neighbor has never achieved peaceful coexistence of countries! And the only way to seemingly evade the necessity for gov deficits is to impose even more detrimental accounting constrains on other countries by practicing Neomercantilism
This short video is part of a longer lecture. And some of what you rightly complain about are policy choices.
4:08 He said exactly this.
@@Basta11 that's exactly the passage I originally addressed with this comment. He only spoke of the possibility to avoid the zero-sum logic in a local national economy by letting other national economies run deficits. That's called beggin-thy-neighbor and doesn't solve the zero-sum logic globally. it's the same problem as within a closed economy, it merely generates a veil of ignorance for the layman's eye by stratifying a global closed economy into various national groups that run surpluses and corresponding deficits with each other. None of this was addressed in the passage you cited to which I originally responded ;)