Even this non-economist can understand that increasing taxes and selling tax-exempt bonds automatically reduces the pool of funds available for private investment. It’s as though these people think money really can be printed in the Mint basement with an adverse effect, and that government bond purchasers would otherwise stuff their money into mattesses when they can’t buy bonds. All this does is make government the extremely expensive middleman of the exchange between producers and investors.
RE :”It’s as though these people think money really can be printed in the Mint basement with an adverse effect”
They want to create enough inflation to get spending and investing again, but only to generate tax revenue. They see the private investment as a necessary evil that must be controlled. They see government spending (public investment) as the best use for resources. Obama needs politically to start talking UP the economy in a year after he gets what he wants. Maybe 2 years inflation starts and they blame greed and call for windfall profits taxes and price controls.