This post is by Peter May and is cross posted from Progressive Pulse, where it appeared yesterday, with permission:
I thought it worth flagging up these two, short well-written pieces from Australia on how politicians should be answering the question “how are we going to pay for it?”
The only improvement I’d suggest is that ‘the politician’ fails to point out that the private banks create new money whenever they lend — yet somehow this goes unmentioned so the implication seems to be that this never creates any inflation. Hence, when the government creates new money we are always going to end up like Zimbabwe or Venezuela but never, ever when the private banks do it. Pehaps the thinking is that this would be too much for one interview session — but if your’e going to change thinking I’d argue you’ve got to do the job properly.
And then there is how the politician should be explaining taxation:
Here I think the politician should mention that when fiat money is created it is always created out of nothing. That’s what fiat money is. The alternative is specie money — which is, in effect, back to the gold standard. Surely the interviewer isn’t proposing that?
These small reservations aside, I think the articles are worth bookmarking. They are both simply put and thus widely enlightening.