IT IS TIME TO REMOVE THE DEBT BARRIER TO ECONOMIC GROWTH

IT IS TIME TO REMOVE THE DEBT BARRIER TO ECONOMIC GROWTH
By Michael Hudson and Paul Craig Roberts

http://www.informationclearinghouse.info/56449.htm

 

March 15, 2021 "Information Clearing House" - Out of habit, American economists worry about federal debt. But federal debt can be redeemed by the Federal Reserve printing the money with which to retire the bonds.  The debt problem rests with individuals, companies, and state and local governments.  They have no printing press. 

We have explained that the indebtedness of the population means there is little discretionary income with which to drive the economy.  The offshoring of middle class jobs lowered incomes, and after paying debt service—mortgage interest, car payments, credit card interest, student loan debt—Americans’ pockets are empty.  

This situation has been worsened by Covid lockdowns.  In the US the federal government has sent out a few Covid payments to help keep people’s heads above water as they face expenses without income.  The financial press refers to these Covid checks as “fiscal stimulus,” but there is no stimulus.  The Covid checks do not come close to replacing the missing wages, salaries and business profits from lockdowns. 

Corporations have indebted themselves and impaired their capitalization by borrowing money with which to repurchase their stock. This has built up their debt in the face of stagnant or declining consumer discretionary income.  

SOURCE:  http://www.informationclearinghouse.info/56449.htm

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