Michael Hudson: Why do they call for governments to balance the budget by pushing the economy at large deeper into debt, while trying to save the banks from ...
Excerpt from the Paul Jay interview with economist Michael Hudson
"PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Baltimore."
"As the effects of the sequester agreement ripple through the American economy–massive cuts, that is, to social programs, and the military to some extent–one thing is clear: both sides–President Obama and the leadership of the Republican Party–seem to think that public debt is the biggest challenge facing the American economy. Well, our next guest begs to differ.
Now joining us in the studio is Michael Hudson. He was a Wall Street financial analyst, is now a distinguished research professor of economics at the University of Missouri-Kansas City. His recent books are The Bubble and Beyond and Finance Capitalism and Its Discontents."
"Thanks for joining us again."
"MICHAEL HUDSON, RESEARCH PROF., UMKC: Thank you very much.
JAY: So I’m reading your material, and clearly you don’t agree that public debt’s the issue. Why? And if not, what is?"
"HUDSON: Well, the one kind of debt that really isn’t an issue is public debt, because there’s a great difference between public and private debt. Governments can own the printing presses. No government can become insolvent as long as its debt is owed in its own currency. And not only has the U.S. public debt gone down as a proportion of GAP [sic] and national income; it actually is financed very largely by the Federal Reserve simply printing money."
Via Global Geopolitics & Political Economy