This is getting a little absurd.

I have no idea where you learned this, or economics for that matter. Modern economics (and crowding out) in no way relies on reserve-constrained lending. It does not rely on “finite financial resources”.

So what, pray tell, is the mechanism by which government debt issuance is meant to increase interest rates? Here is a direct quote on deficit spending from the Wiki on crowding out and IS/LM:

If the economy is at capacity or full employment, then the government suddenly increasing its budget deficit (e.g., via stimulus programs) could create competition with the private sector for scarce funds available for investment, resulting in an increase in interest rates and reduced private investment or consumption.

So yes, financial crowding out DOES rely on “finite financial resources”. I.e, the idea that lending is reserve-constrained; so the private sector is competing with the government for reserves (to be lent), and thus pushing up interest rates.

I have no clue where you learned any of this, but I would probably go back and try learning mainstream economics again. You’re arguing a straw-man because your understanding is wrong.

Actually it seems to be you that does not understand the hypothesis that you yourself are advocating.

Corporate accountant and former auditor with degrees in philosophy and accounting.

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