Consistent with our perspective, Blyth stresses the “critical role” that U.S. debt plays in the economy tried dispelling the confused rhetoric adding,“Debt is investment, even public debt. It is not a deadweight loss, and without it we would never have the industries that we have today.”
On Europe and austerity measures like the sequester he argues:
“[Budgetary austerity] is really not working out so well in Europe and it would be a disaster if it were tried here too...The result in Europe has been plain to see — a massive contraction in economic activity, with those that cut the most seeing the steepest collapse in growth and, paradoxically, the biggest build-up in debts,” Blyth wrote. “This is hardly a surprise historically since pretty much all attempts to balance budgets have resulted in recessions or depressions.”
When viewed through our stock-flow, money mechanics framework for those testifying to affirm the standard view on debt and deficits the transparency between their argument and political agenda are striking. As expected The Business Roundtable is concerned for corporations having to pay, heaven forbid, for the necessary infrastructure required to make them competitive. But Maya Mac Guineas, president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt is clearly grasping at straws but preaching to the choir of our democratically elected representatives who fail to appreciate their role in managing the economy and our managing and developing our future prospects...Useless!
Link to the hearing here Blyth begins at the 46:30 mark with Senator Bernie Sanders comments also very instructive.