Thread: Fiat money
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Old Nov 24, 2009, 06:22 pm   #20 (permalink)
Vee
Igneous Magma
 
Posts: 414
Modern Monetary Theory of a flexible floating fiat currency says that if the government is in surplus than the private sector is in deficit.

There can be no net savings of money by the non-government sector without the government going into deficit.

In more laymen terms, if the government is in surplus, the private sector is losing purchasing power - have less money than they otherwise would (and that can be fine if the economy is going along swimmingly)


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