Wealth Means Responsibility

The federal government is not always like a normal business. It can run a persistent budget deficit as long as it can be financed. The federal government prints money. But so do states and municipalities with tax-free municipal bonds, as do public companies with stocks and bonds. But all those securities are expressed in the very dollars in which the central government holds a monopoly. Dollar finance is circular. Five trillion dollars at negative three percent interest is less than five trillion borrowed at negative one percent. As long as you can depreciate or amortize the long-term debt over the useful life of the improvement to plant and equipment, minus its salvage value, you should be able to leverage the “magic” of government accounting with a truly large infrastructure program that expands aggregate supply while dragging aggregate demand along for the ride.