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Wake up economists! - Currency-issuing central governments have no budget constraint

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  • Lawn, Philip

Abstract

Abstract: Despite what mainstream economists preach, currency-issuing central governments have no budget constraint. It is therefore incumbent upon them to use their unique spending and taxing powers to achieve the broader goal of sustainable development. Their failure to do so has meant that nations have fallen well short of realising their full potential. Rather than accept the neo-liberal myth that ‘small government is best’, the citizens of a nation should welcome the central-government’s responsible use of their unique spending and taxing powers to provide sufficient public goods and critical infrastructure, achieve and maintain full employment, resolve critical social and environmental concerns, and meet the requirements of an aging population. Should central governments fail in their responsibility to prudently use their unique powers, public disapproval is best registered through the ballot box, not through degenerative debates that distort the facts about the operation of a modern, fiat-currency economy.

Suggested Citation

  • Lawn, Philip, 2011. "Wake up economists! - Currency-issuing central governments have no budget constraint," MPRA Paper 28224, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:28224
    as

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    File URL: https://mpra.ub.uni-muenchen.de/28224/1/MPRA_paper_28224.pdf
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    References listed on IDEAS

    as
    1. Antonio Estache & MartÌn A. Rossi, 2002. "How Different Is the Efficiency of Public and Private Water Companies in Asia?," World Bank Economic Review, World Bank Group, vol. 16(1), pages 139-148, June.
    2. Scott Fullwiler & L. Randall Wray, 2010. "Quantitative Easing and Proposals for Reform of Monetary Policy Operations," Economics Working Paper Archive wp_645, Levy Economics Institute.
    3. L. Randall Wray, 1998. "Modern Money," Macroeconomics 9810002, EconWPA.
    4. William Mitchell & Joan Muysken, 2010. "Full employment abandoned: shifting sands and policy failures," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 5(4), pages 295-313.
    5. Alcott, Blake, 2005. "Jevons' paradox," Ecological Economics, Elsevier, vol. 54(1), pages 9-21, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Keywords: Central governments; government budgets; fiscal and monetary policy; sustainable development;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General

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