Encyclopedia of Opinion

Question: Do deficits matter?
Position‹2 of 3›: Deficits are not bad as governments that issue their currency can't go bust

The government should use fiscal policy to achieve full employment, creating new money to fund government purchase. Deficits are not a problem, only inflation is. If inflation becomes a problem, the government can raise taxes and issue bonds to withdraw cash from the economy.

Supporting arguments · 1

Governments that issue their own currency are not constrained by borrowing
As long as central banks can buy government bonds with newly created money, a government cannot default. Therefore deficits and debt are not important. Inflation might be a problem, but not deficits, and inflation can be countered with higher taxes.