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I Guess it really is Different this Time

April 11, 2011

Quizno’s gets with the program

Ken Rogoff doesn’t want to be an idiot either.  He was saying just a few weeks ago that we were going broke, but now he questions what government debt means.

Here he channels Interfluidity’s “Point 8” via the Business Insider:

3:58 Debt is fundamentally a political economy problem. Who is bankrupt? Governments aren’t really bankrupt, they don’t pay because they don’t feel like paying or their system doesn’t feel like paying. How do you model that? What are the limits? What are the politics?

Whoa!  That’s great to hear!  You mean we cannot go broke?  Wow! If we cannot go broke, What should we worry about?

You probably want to know why this admission, from this person, is so important. Well, Mr. Rogoff wrote the damn book on broke governments, This time its different.  This book is very, very popular. And here he is admitting governments cannot go broke.

Mr. Rogoff, we have the start of a model. Head on over to Moslereconomics.com and read the Mandatory Readings.  The limit is how much inflation the government wants the economy to have.  Yes, it is a political decision first and foremost.

We are shifting the battle from solvency to inflation, and we can win this battle.  I guess it is different this time.

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