Comments by "Grim Affiliations" (@grimaffiliations3671) on "Will the EU Stop the French Left from Borrowing More Money?" video.

This is the downside of not controlling your own currency like they do in the UK, China, US etc
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True. But i wonder why the EU doesn't back stop member state deficit spending when they spend on economic development like they did with covid? How can it be expected to compete with China or the US if it doesn't do this?
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@Valadion1 Argentina borrowed heavily in foreign currencies, and often pegged their exchange rate to foreign currencies. That is not controlling your own currency. You only truly control your currency when you borrow exclusively in that currency and allow your exchange rate to float. Only a handful of countries can boast this
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@kims4149 source?
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yeah in usa and china
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@alaoui9121 They're struggling because they act like they don't control their own currency and impose austerity
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@kims4149 which one?
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@thisbarb Your means changes depending on your monetary sovereignty. When you have to grovel to foreign central banks for money, your means are significantly demised
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@nicobruin8618 This is false, the only real limits of a countrys spending power is the availability of labor and resources. You don't need to "borrow" from yourself, so their ability to spend would only be limited by their productive capacity
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no, other countries print with no consequences too. China to name a big one
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@nicobruin8618 no
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@alaoui9121 printing beyond your economy's productive capacity limits will cause inflation
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@Gilder-von-Schattenkreuz Europe is far behind both the US and China in many respects. The UK acts like an EU member state so that doesn't really count
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@VADC-dev because they control their own currency
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@Gilder-von-Schattenkreuz sure, an example of a country that controls its own currency
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@Gilder-von-Schattenkreuz Taxes don't pay for anything the government does when it borrows and spends exclusively in its own currency. Also currency is only devalued once you try to spend more than your economy can produce
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@Gilder-von-Schattenkreuz No such thing as borrowing from other countries or even your own citizens. Both entities can only get the money needed to "lend" to the government from the government itself. The government borrows only from itself. And printing money is not inherently inflationary, it only begins to cause inflation when the government tries to print more money than its economy can produce
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@Gilder-von-Schattenkreuz No one said it was a magic infinite resource, saying it must be limited by your economy's productive capacity makes it the opposite of an infinite resource. But it absolutely is a government token. A token the government conjures out of thin air and creates demand for via forced taxation
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@Gilder-von-Schattenkreuz Money is a liability of the government
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@Gilder-von-Schattenkreuz Dollars are absolutely a liability of the government. It's the states unit of account. Just because private entities can issue IOU's in the governments unit of account, doesn't make it not the governments unit of account. Go ahead and look at the feds balance sheet, they have all the dollars in circulation as their liabilities. Other central banks have the same thing
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@Gilder-von-Schattenkreuz That's not how it works. The money is an IOU of the government, so in return for the money, they promise to give you that same money denomination. 5 bucks is a promise of 5 bucks. Back on the gold standard it was liable to give you gold with you money, now its only liable to give you money for your money. Each pound note says the king "promises" to pay you whatever that note says its worth
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@Gilder-von-Schattenkreuz it literally says on the notes themselves that those dollars are accepted as a way of settling all public debts, meaning the government will accept that currency, and only that currency, as a way of satisfying your tax obligation to the state. And again, a quick google search would tell you this money is a liability of the government
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@Gilder-von-Schattenkreuz Yes, and dollars originate from the government. Since each dollar is promise to pay the bearer the face value of the dollar, it is a liability of the government. Hence why all currency in circulation is listed as a liability of the government in both the fed and bank of england balance sheets. It would take you 3 minutes to google it
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The ECB could be the buyer, like they were for everyones covid spending
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@drscopeify The japanese own like half of all their debt haha
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@hgu123454321 You don't have to let them spend on whatever they want. Just on what is necessary to achieve full employment. It can be approved on a project by project basis
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@Carthodon Could the EU not agree to policies on the EU level, and simply allow individual countries to run whatever deficits are necessary to implement those policies? You can call it buying votes but ultimately measures that increase aggregate demand are positives for growth
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@Carthodon I'm saying why don't they let countries run their own fiscal policies, but create some laws that apply to all nations, the funding for which is ensured by the ECB. Similar to how the US creates laws that apply to all its member states. For example an EU wide jobs guarantee, where the ECB backstops the deficit necessary for it. Fiscal policy would be a large source of growth
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@Carthodon It's not so much the funding that im saying should be backstopped, but the bonds that finance the spending. The ECB could act as a buyer of last resort, as a way to keep interest rates stable if buyers don't emerge on the market. Similar to what they did to backstop covid era deficits. Fiscal policy can indeed create growth, it's not just a tool to bring economies out of recession. If you use fiscal policy to support full employment, you would be using 100% of your economy's spare capacity, as apposed to letting it sit idle which the private sector alone will always do as making use of all available resources can't really be done profitably without government support
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@Carthodon No, simply making use of all available resources is not inflationary. Full employment doesn't have to be 0% unemployment. It's not difficult to distribute the money in such a way we reach full employment, the government could simply employ a jobs guarantee. Simply bid on the labor of everyone who is currently unable to find a job in the private sector, finding something useful for them to do in their community. If no one shows up, then we were already at full employment. But if 10 million people show up, then we will realize the full breadth of all the slack in our economy
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that 58% is how much of their gdp comes from government spending, it doesnt really tell you what the source of that revenue is
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@nicobruin8618 but the ratio is important no? what does the tax situation look like?
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