Re: Much ado about nothing? A light clicks!

From: Peter Kriesler <P.Kriesler_at_unsw.edu.au>
Date: 06-02-03

OK, so what you are saying is that if the government borrows from the
private sector by selling bonds, then, if we rule out any interest rate
effect, there will be no change to the level of aggregate demand. I can
accept that. However, if that is the case, then what problem is there with
government borrowing? If the government increases expenditure, then, I
agree, "financing" is irrelevant. However, if it makes people happy, to
have an equivalent amount of borrowing and it has no impact, then what is
wrong with that?

Peter Kriesler
School of Economics
UNSW
Sydney 2052
http://economics.web.unsw.edu.au/people/pkriesler/
Received on Thu Feb 6 14:34:04 2003