"Upstream" with Erik Torenberg cover image

E14: Balaji Srinivasan on the Fiat Crisis, Russia, and China.

"Upstream" with Erik Torenberg

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The Red Blue of Reagan's Plan to Save the World

In the 80s, Reagan's formula was to cut taxes and keep spending high. He didn't cut welfare spending that much, but he cut taxes at the cost of deficit spending. The structural incentive is such that they would just keep printing in order to win elections. If you don't win today, there is no tomorrow. Loser pays. So if you can go into that kind of debt and have somebody else pay for winning the war or short term reelection, you will.

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