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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Neocon who wrote (26175)	7/29/2000 2:43:33 AM
From: nihil	Read Replies (1) \| Respond to of 769667

Afraid not. Public borrowing from banks is the only way the net money supply in our system can be increased. This is the old multiple deposit creation game. When the fed buy public debt instruments it creates money by paying in bank deposits. Public borrowing is the only way we can create money without destroying equivalent amounts. We once increased supply by monetizing bullion. Today, its only by monetizing debt. It needs to be understood that government borrowing is deflationary, i.e. decreases demand. If the new holders of money spend it, that is inflationary. If the government spends the money that it borrows (or cuts taxes), that is also inflationary. Thus Clinton is trying to reduce inflation and the Republicans are trying to increase it. Strange, isn't it?