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In time, the economy will recover, and the case for borrowing from Medicare and Social Security to finance stimulus measures will disappear.
In this circus trick one arm of the federal government, the Treasury, sells bonds whose proceeds finance stimulus spending, at the same time that another arm of the government, the Fed, buys bonds, paying with ready money (cash and Reserve Bank balances).
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Rösler told a press conference in Berlin that his government could not support 'debt financed' stimulus packages.
ACROSS the United States, thousands of federally financed stimulus projects are under way, aimed at bolstering the economy and putting people to work.
Instead, it uses the central bank reserves to buy fuel overseas, meet foreign debt payments and finance economic stimulus programs.
Now that Washington is running continuous deficits, it will have to borrow the money to finance the stimulus.
In order to finance a stimulus program of infrastructure building, the government plans to rescind a law that bans it from borrowing more than 20percentt of its spending.
Then, too, there is the alternative of taxing corporations and the rich to finance federal stimulus without huge deficits and increasing costly national debts.
The administration and Congress are using the program as "a blank check," he said, to finance additional stimulus spending and tax cuts.
Other analysts say they worry whether the Democrats can afford to finance the stimulus, as well as an ambitious social welfare program promised during campaigning.
What Europe has, instead, are national governments, each of which is reluctant to run up large debts to finance a stimulus that will convey many if not most of its benefits to voters in other countries.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com