Comments on: Crowding Out http://www.economicshelp.org/blog/economics/crowding-out/ Economics Blog - current events and economics essays Thu, 18 Mar 2010 19:46:30 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Ralph Musgrave http://www.economicshelp.org/blog/economics/crowding-out/comment-page-1/#comment-5450 Ralph Musgrave Fri, 05 Feb 2010 17:18:53 +0000 http://www.economicshelp.org/blog/?p=1013#comment-5450 Crowding out is caused by the fact of the government – central bank machine borrowing in order to spend. Since no one seems to have the faintest idea how serious a problem crowding out is, there is a phenomenally simple solution to this “problem”: DONT BORROW ! In other words, since the the government - central bank machine can simply print money, why not just “print and spend” instead of “borrow and spend”. Problem solved ! Indeed, this is more or less what the UK authorities did in 2009. Trouble was that they handed too much of the money to the UK equivalent of Wall Street rather than the UK equivalent of Main Street. Crowding out is caused by the fact of the government – central bank machine borrowing in order to spend. Since no one seems to have the faintest idea how serious a problem crowding out is, there is a phenomenally simple solution to this “problem”: DONT BORROW !

In other words, since the the government – central bank machine can simply print money, why not just “print and spend” instead of “borrow and spend”. Problem solved !

Indeed, this is more or less what the UK authorities did in 2009. Trouble was that they handed too much of the money to the UK equivalent of Wall Street rather than the UK equivalent of Main Street.

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