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Remember, Much Government Debt Is Monetized

Here’s a letter to the editor of Independent Journal Review:


You report that Speaker of the House Nancy Pelosi, when asked if government spending is fueling the rise in government indebtedness as well as inflation, answered “No, it isn’t. The government spending is doing the exact reverse, reducing the national debt. It is not inflationary” (“Pelosi Insists Gov’t Spending Is ‘Reducing’ the National Debt and ‘Not Inflationary’,” March 14).

Does Pelosi really believe what she says? If so, then prominent among our government ‘leaders’ are simpletons with less intelligence than dust bunnies. Or is Pelosi aware that her statement is the equivalent of proclaiming that 2+2 =-5, but calculates that Americans are so stupid as to fall for her flummery? If so, then prominent among our government ‘leaders’ are charlatans whose absurd assurances would bring a scarlet blush to the face of Bernie Madoff.

Either way, we’re in a heap of trouble.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030