The Importance of Keeping Spending

If you divide the economy into two halves, if one half has a deficit, which is the government, then the other half has to have a surplus. But even though you can spend as much as you like, there's no, it's not free. It always implies a use rise to a borrowing. That's the bit that people leave out when they're trying to understand how this spending occurs. Each bit of that deficit spending has to show up as a borrowing from the private sector. And initially it shows up as a loan from the banks to the Central Bank.