People often think of the national budget as a household budget, a belief that has enabled policies that have exploded the amount of public debt owed to private banks. But as Professor Steve Keen notes in this short video, the government has a money-printing central bank, so the household budget model does not apply. He explains what the government should do instead to pay for public needs such as university fees:
“Government runs a deficit financed by the central bank, and spends money into the economy. It stimulates the economy and gives us an educated youth that are not encumbered by private debt.”
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