tag:blogger.com,1999:blog-13936746.post114770135514508651..comments2023-10-16T18:43:33.353+11:00Comments on Diary of a Desperate Houso: Budget surplus extracted from our teethDHhttp://www.blogger.com/profile/05362720961660684331noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-13936746.post-1148626051605242582006-05-26T16:47:00.000+10:002006-05-26T16:47:00.000+10:00Dear DHYou are exactly right that the budget surpl...Dear DH<BR/>You are exactly right that the budget surpluses have increased private debt. As all private transactions in fiat money net to zero (an asset creates an equal liabilty), government spending is necessary to create money. What a budget surplus means is that if households wish to retain the same spending levels, they will have to create private debt to cover the government budget surplus, dollar for dollar. If only more economists understood this, we would be so much better off. If you have any inclination to learn more about this, go to the Centre of Full Employment and Equity site at http://e1.newcastle.edu.au/coffee/Anonymousnoreply@blogger.com