Season 1 · Episode 463
Blowing the budget?
In the US a lot of people, on both sides of politics, are having a bit of a hissy fit over President Trumps Big Beautiful Bill Why? Because they’re worried that it will add to America’s deficit. So what, says Steve.
Debunking Economics - the podcast · Steve Keen & Phil Dobbie
July 9, 202544m 14s
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Show Notes
Financial markets don’t like it when governments announce plans to spend more money. That’s why there’s concern over Donald Trump’s Big Beautiful Bill, which will add, by some accounts, $4 trillion to the US budget deficit over the next decade. Steve Keen says it’s not a problem. Banks buy up the bonds and the central bank ensures they have the liquidity to do so. In which case, why are people ditching US bonds in favour of other sovereign debt elsewhere? And isn’t there a risk that higher treasury yields will reduce the differential with corporate bonds, which could discourage investment in the real economy? As Phil and Steve nut it out, they both agree, Trump’s bill is a bad one when it comes to income distribution. It assumes trickle down economics. When has that ever worked?
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