Deficits

Brad DeLong's Semi-Daily Journal
Fair, Balanced, and Reality-Based
http://delong.typepad.com/sdj/2005/04/keynesian_econo.html
April 05, 2005
Keynesian Economics: Mail Call...

Marginal Revolution
Small steps toward a much better world
http://www.marginalrevolution.com/marginalrevolution/2005/04/when_do_fiscal_.html

A very good discussion about fiscal policy from Brad DeLong, with general consensus from Tyler Cowan. The best element may have been Tyler's last line:

Mostly I am a skeptic about fiscal policy, if only because discretionary fiscal changes tend to be small relative to modern wealthy economies.

This Author disagrees with both assessments concerning Deficit spending, but is very close to their Thought on the matter. He has always doubted the value of Keynesian policy. He knows Government deficit spending is Inflationary--whose impact falls on the Resource markets, and very much identifies with putting a Mortgage on the business. Materials are left unpaid except for the issuance of Paper--very little difference between Dollars and Treasuries, similar to Cash purchases versus Credit card purchases.

Does Deficit spending fuel the Economy?

Very doubtful! It robs the Private Sector of investment funds, provides unproductive competition for Materials which is poorly funded (neither Wage return or Business profit), and guarantees future Tax revenues must be devoted to Government Debt service. An Argument can be made that the World would have recovered from the Great Depression faster without Keynesian policy. Later usage of Keynesian fiscal policy defied the initial logic under which it was proposed: An Economy must be producing at significantly less than Full Employment. Sector position near Full Employment of economic resources will place the Government in direct unfair competition with the Private Sector, as the Private Sector must finance such competition from their own Profits in later taxation. lgl