Bobby Jindal Doesn't Understand Much About Money

A blog about business and economics.
June 18 2013 11:06 AM

Bobby Jindal Doesn't Understand Much About Money

Louisana Gov. Bobby Jindal addresses the National Press Club May 2, 2008, in Washington, D.C.
Louisana Gov. Bobby Jindal addresses the National Press Club May 2, 2008, in Washington, D.C.

Photo by Chip Somodevilla/Getty Images

Bobby Jindal in the course of urging Republicans to buck up and hew to the orthodoxy offers this sensitive gloss of American progressive politics (emphasis added):

Because the left wants: The government to explode; to pay everyone; to hire everyone; they believe that money grows on trees; the earth is flat; the industrial age, factory-style government is a cool new thing; debts don’t have to be repaid; people of faith are ignorant and uneducated; unborn babies don’t matter; pornography is fine; traditional marriage is discriminatory; 32 oz. sodas are evil; red meat should be rationed; rich people are evil unless they are from Hollywood or are liberal Democrats; the Israelis are unreasonable; trans-fat must be stopped; kids trapped in failing schools should be patient; wild weather is a new thing; moral standards are passé; government run health care is high quality; the IRS should violate our constitutional rights; reporters should be spied on; Benghazi was handled well; the Second Amendment is outdated; and the First one has some problems too.

I am genuinely unsure what "factory-style government" is supposed to mean, but we see here that Jindal, like all too many people in American politics, is deeply ignorant about the operation of money under a fiat currency regime. The expression "money doesn't grow on trees" comes down to us from a time when the gold standard was in effect, and a large share of the population had direct access to fruit-bearing trees. Nowadays it would be quite difficult for me to pluck anything of value off a tree, but the Federal Reserve really can create arbitrary quantities of money with the stroke of a key.

That's a very important development. It does not, of course, change the fact that real constraints bind. No matter how much money we print, there's only so much gasoline available or houses for rent. Print too much money, and prices will just rise. On the other hand, if there are a lot of unemployed people and the printing of money leads to expectations of future price increases, then entrepreneurs might hire those people to alleviate some of the scarcities. Rising prices of housing could mean new home construction. Rising prices of goods could mean new orders of factory equipment and trucks to bring the goods to market.

By the same token—the federal government really doesn't ever need to pay back its debts! The federal government is immortal! It just needs nominal GDP to grow over the long run at a faster rate than the national debt.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.


The World

How Canada’s Shooting Tragedies Have Shaped Its Gun Control Politics

Where Ebola Lives Between Outbreaks

Gunman Killed Inside Canadian Parliament; Soldier Shot at National Monument Dies

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

Paul Farmer: Up to 90 Percent of Ebola Patients Should Survive

Is he right?


“I’m Not a Scientist” Is No Excuse

Politicians brag about their ignorance while making ignorant decisions.


Driving in Circles

The autonomous Google car may never actually happen.

In Praise of 13th Grade: Why a Fifth Year of High School Is a Great Idea 

PowerPoint Is the Worst, and Now It’s the Latest Way to Hack Into Your Computer

  News & Politics
The World
Oct. 22 2014 6:30 PM The Tragedies That Have Shaped Canada's Gun Politics
Continuously Operating
Oct. 22 2014 2:38 PM Crack Open an Old One A highly unscientific evaluation of Germany’s oldest breweries.
Gentleman Scholar
Oct. 22 2014 5:54 PM May I Offer to Sharpen My Friends’ Knives? Or would that be rude?
  Double X
The XX Factor
Oct. 22 2014 4:27 PM Three Ways Your Text Messages Change After You Get Married
  Slate Plus
Tv Club
Oct. 22 2014 5:27 PM The Slate Walking Dead Podcast A spoiler-filled discussion of Episodes 1 and 2.
Brow Beat
Oct. 22 2014 9:19 PM The Phone Call Is Twenty Minutes of Pitch-Perfect, Wrenching Cinema
Future Tense
Oct. 22 2014 5:33 PM One More Reason Not to Use PowerPoint: It’s The Gateway for a Serious Windows Vulnerability
  Health & Science
Wild Things
Oct. 22 2014 2:42 PM Orcas, Via Drone, for the First Time Ever
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.