The Democrats have started to publicly push for economic ideas that are literally impossible to pay for. The reason is that some have adopted the concept that is impossible for a country that prints their own money to go bankrupt.
This flies completely in the face of every economic law that exists. Irresponsible governments fare no better than irresponsible people, but the Democrats are competing a competition in recklessness.
Fox Business reported on the misguided efforts of the Democrats.
Modern Monetary Theory (MTT) may be popular in Europe, but one economist Opens a New Window. hopes it never makes its way to the U.S.
“You look at Italy with over 130% debt to GDP. You look at Lebanon 150% — even us — we’re at about 103% and in fact academic studies show that whenever that debt to GDP ratio is over 90% — guess what? It slows down economic growth,” former JPMorgan economist Anthony Chan told FOX Business’ Stuart Varney on Tuesday.
The economic line of thinking argues that debt doesn’t matter and a country that prints its own money can never go bankrupt. However, Chan had a very different explanation.
“Their argument is it doesn’t matter as long as the interest rate is below the inflation rate. But over time what happens when that debt to GDP ratio just gets out of control– over 90%, over 120%, 130% — it becomes a major problem and then you can’t do anything about it but just accept reality,” he explained.
The concept has also been gaining support among some high-profile Democrats.
New York Congresswoman Alexandria Ocasio Cortez, earlier this year, told Business Insider that the theory “absolutely” needs to be “a larger part of our conversation.”
Bernie Sanders stated this week that he wants to not only erase all student debt, but erase all medical debt.
The Democrats will never stop with these expensive dreams as they mislead American citizens (and illegal aliens) down a road that has been proven again and again to have a disastrous ending.