> The government, after all, doesn't actually create anything, every dollar it spends came out of somebody else’s pocket. Whose pocket? Part of the $3 trillion was bid away from private borrowers like businesses, and the rest was siphoned from peoples' savings by the Federal Reserve creating new money.
> This means that, yes, GDP would decline sharply. But wealth would actually grow, perhaps substantially. The businesses would be able to buy things they need, while the savers keep their money that was doing useful things like paying their retirement.
I've always wondered what would happen if the US government stopped borrowing and started paying down its debt. My theory is that all that money that would have gone into endless government would mostly be added into businesses. Glad I'm not the only one who thinks that way.
> This means that, yes, GDP would decline sharply. But wealth would actually grow, perhaps substantially. The businesses would be able to buy things they need, while the savers keep their money that was doing useful things like paying their retirement.
I've always wondered what would happen if the US government stopped borrowing and started paying down its debt. My theory is that all that money that would have gone into endless government would mostly be added into businesses. Glad I'm not the only one who thinks that way.