Sunday, 30 May 2021

BBC says Biden’s spending spree will be paid for by borrowing . . . no tax . . . oh who cares.



BBC1 TV news on the evening of 29th May said Biden’s spending spree would necessitate a large amount of extra borrowing. But a few minutes later in the same report they said it would be paid for via extra tax. So which is it?

Well if you’re a reporter for a TV channel or newspaper it really doesn’t matter: the important thing if you’re going to ensure you get paid is just to spew out lots of meaningful sounding words. If the words are BS, that doesn’t really matter.

So will the spending spree be paid for by tax or borrowing or good old money printing? Well paying for it all via tax (plus money printing as appropriate) would be make sense. As for paying for most of it via borrowing, that would push up interest rates to an excessive extent, so that’s not a brilliant idea.

In short, there are a range of options here, and we do not yet know exactly which option will be chosen – or forced on the US government.  

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