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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (47676)	12/19/2005 1:06:30 PM
From: NOW	Read Replies (1) \| Respond to of 110194

are you carrying on a conversation with the mouse in your pocket, or is that Grace?

To: ahhaha who wrote (47676)	12/19/2005 1:31:57 PM
From: gpowell	Read Replies (1) \| Respond to of 110194

No, she does not believe in Ricardo Equivalence because borrowing doesn't need to be repaid under the same output constraint regime that existed to require borrowing. A relaxing output constraint is one of the determining factors in the level of borrowing and therefore it appears you are reasserting what Grace said previously, that government spending financed through borrowing results in a higher state of growth than spending financed through taxes. Given that borrowed resources must have come from current private wealth, just as taxes do, for the output constraint to be any different between the two there must be a shift in the marginal behavior of economic agents. And thus, asserting the output constraint is relaxed with borrowing begs the question.