> On Wed, Nov 5, 2008 at 3:59 PM, Bill wrote:
> Dear ABC breakfast,
> Headlines like – 40 billion hole in the bucket – repeated by the breakfast
> hosts today – merely perpetuate the myth that the Federal government
> has a financial constraint. This myth has been used by the neo-liberal
> agenda that is now in tatters as a result of the failure of markets to
> The reality is that the Federal G. as the monopoly issuer of the currency
> has no financial constraint and does not require revenue to spend. In
> fact, spending provides the funds to the private sector that we use to
> fulfill our tax obligations.
> Further, the pursuit of budget surpluses has squeezed the liquidity of
> the private sector and been an important part of the reason why that
> sector is now so indebted. The natural state is for the federal
> government to run deficits in order for the private sector to save. The
> private sector cannot save if the government is running surpluses.
> Further, running surpluses (or deficits) in any one year makes no
> difference to the capacity of the Federal G. to run a surplus (deficit) in
> the next. The surpluses that have been adored by the neo-liberals and
> by the sin of ignorance of your announcers have not built up any
> capacity to allow spending to proceed now. There is no hole in the
> bucket. There is no bucket!
> I have written a lot about this over the year. My recent book (see
> details below) articulates this in detail. You can also read details of how
> a modern monetary economy like Australia works from the many papers
> available from my research centre.
> It would be good if you stopped perpetuating this myth and instead
> allow reasonable commentary on what is actually going on with
> government opportunities etc. It is time your listeners (and viewers)
> learned how the economy actually operates and how they have been
> dudded by fiscal surpluses over the last 11 years.
> Best wishes,