51% of Americans Need a Lesson in Macroeconomics

I don’t normally cite polls from the grossly biased Rasmussen, but this one was too absurd not to post.

A new Rasmussen Reports national telephone survey finds that 51% of Likely Voters believe the federal government will go bankrupt and be unable to pay its debt before the federal budget is balanced. Thirty-six percent (36%) disagree and think it’s more likely that the federal budget will be balanced first. Thirteen percent (13%) are not sure.

Nations, like the United States, Canada, the United Kingdom or Japan cannot go broke.  As sovereign currency issuing nations, they can never become insolvent.  The economy of the United States is not like a household budget.

This is why I laugh heartily when certain ridiculous commenters compare the United States to Greece (a currency user, not a currency issuer).


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4 thoughts on “51% of Americans Need a Lesson in Macroeconomics

  1. Ridiculous? The Weimar Republic was a currency issuer, wasn’t it? When the value of a currency is devalued to close to pennies on the dollar the term “bankrupt” is only incorrect in a syntactic sense.

    1. Well, Nemo, perhaps you can explain to the class how our present economic circumstance will lead to the dreaded hyperinflation. Please, we await your lucid exposé.

  2. If Washington decides to spend our way to a better tomorrow and funds it by boosting m1 and m2 (QE3), it will lead to to many dollars chasing to few goods. Remember the late 70’s? Same thing.

    1. First of all, the expansion of the M1 and M2 money stocks have had no impact on inflation.

      The 1970s? That’s not hyperinflation, that’s stagflation which, by most economic accounts, was largely the result of a supply shock caused by the oil embargo.

      Following Richard Nixon’s imposition of wage and price controls on August 15, 1971, an initial wave of cost-push shocks in commodities was blamed for causing spiraling prices. Perhaps the most notorious factor cited at that time was the failure of the Peruvian anchovy fishery in 1972, a major source of livestock feed.[16] The second major shock was the 1973 oil crisis, when the Organization of Petroleum Exporting Countries (OPEC) constrained the worldwide supply of oil.[17] Both events, combined with the overall energy shortage that characterized the 1970s, resulted in actual or relative scarcity of raw materials. The price controls resulted in shortages at the point of purchase, causing, for example, queues of consumers at fueling stations and increased production costs for industry.[18]

      Are you claiming we’re in or near a situation of stagflation? That’s interesting given the expected core inflation rate is about 2%. I agree that Wisconsin is suffering from job stagnation primarily due to Walker’s policies, but there’s no inflation per se.

      Care to try again? Hyperinflation. Define and discuss. Explain why we’re at dire risk of hyperinflation in our current economic circumstance.

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