Republicans preach the myth that businesses and homeowners can't run deficits, so government shouldn't do so either. The truth is that Americans run deficits -- that is, borrow money -- with great enthusiasm.
And thank goodness, because borrowing and lending directly increase the money supply, with every dollar of lending further generating several additional dollars of new economic activity.
The 2008 banking crisis abruptly wiped out the private sector's ability to borrow, causing a powerful economic contraction. As bad as the economy is today, it would have shrunk much further (making the deficit worse yet) if the federal government hadn't been the borrower of last resort.
The best news from this week's elections is that the Republicans didn't gain enough power to actually put their reckless economic agenda back into practice.
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