Warren Mosler suggested that ANY BORROWING by government
raises interest rates, and raises them permanently. See second last paragraph
here.
These are his actual words: “Issuing Treasury securities only
serves to support the term structure of interest rates at higher levels than
would be the case. And, as longer term rates are the realm of investment,
higher term rates only serve to adversely distort the price structure of all
goods and services.”
I agree. And Milton Friedman advocated a “zero government
borrowing” regime. See paragraph starting “Under the proposal…” (p.250) here.
Now will someone explain where
Mosler, Friedman and Musgrave have gone wrong?
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