![]() ![]() The one percent did not benefit from those deficits. ![]() ![]() That deficit was good for a very different constituency. The Democrats just added almost two trillion to the deficit with their Covid rescue spending package in March of this year. The main question is: Who is profiting from the deficit? The Republican deficits were very good for big corporations and the richest people in society. On the other side of every fiscal deficit lies a financial surplus in some part of the economy, which is why I titled one of my chapters: “Their red ink is our black ink”. ![]() What I argue in the book, is that every deficit is good for someone. But more importantly, what also did not happen were all of the bad things that for a long time we've been taught to associate with increases in the deficit: spiraling interest rates, crowding out of private investment, the increased risk of a debt crisis and all that kind of stuff. They claimed, we were going to see a boom in hiring and investments. In 2017, the Republicans in the US increased the deficit by cutting the corporate income tax to create greater incentives for businesses to invest. The important thing is how the money is spent. Could you please explain what this means? In your book “The Deficit Myth“ you argue that the deficit actually doesn’t matter that much. You are one of the most well-known proponents of Modern Monetary Theory. ![]()
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