Mike T
2008-12-05 08:47:08
The government can always borrow money from other sources outside of the economy, such as a foreign government. The catch is that it is then indebted to foreigners, which can ruin the independence of a country. The $700B bailout plan was done in no small part because our Middle Eastern, Russian and Chinese financiers demanded that we protect their investments in our economy.
So, in reality, Keynesianism offers two choices: screw up the efficiency of the allocation of capital in your economy through redistribution of wealth or risk becoming a vassal of another state or large foreign investment groups.
