Part of the How Money Works – FAQ series
This shows that basically dollar for dollar, government deficits EQUAL the amount of money the private sector (that’s you and us) end up with. If you make the government deficits smaller, guess who’s pocket it comes out of? OURS!
This applies to Government Debt as well. Government debt equals private sector (that’s you and our’s) savings!
From Stephanie Kelton Tweet:
How many times am I going to be forced to Tweet this graph tonight?
Bottom line: Government's deficit is *our* surplus pic.twitter.com/Fo1PGJI2
— Stephanie Kelton (@StephanieKelton) September 6, 2012
Blue – Red = Green
Government deficits now barely large enough to keep private sector in surplus pic.twitter.com/HvbjfjLl79
— Stephanie Kelton (@StephanieKelton) January 25, 2017
More in the How Money Works – FAQ series:
- 7 Deadly Innocent Frauds of Money
- Professor Steven Hail explains money in a video
- Think this Money Theory is too much CONSPIRACY THEORY crap?
- What gives money its value?
- Who can really create money? The Treasury or the Federal Reserve?
- Is the Federal Reserve (The Fed) a private entity, not controlled by us?
- Money Summit
- Government Deficits vs. Private Sector Balances Chart
- Outside Money Resources
- Possible Ideas or Throw-Away Ideas