In a recent Wall Street Journal opinon piece, Hoover Institution senior fellow John Cochrane argued that “Trump’s Monetary Policy Desires Aren’t Crazy.” As part of his defense of Trump, Cochrane puzzlingly contended that the federal government exports its debt in return for “consumer goods.” As constructed, the argument mistakes causation.
As is pointed out in The Deficit Delusion without the conceit of insight, the remarkable power of compound returns means money is ruthless. Which means the ability to borrow is directly related to one’s ability to pay back monies borrowed.
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