"Dollar hegemony means selective austerity at home too. Extravagance is only admissible when it comes to certain kinds of spending. It’s spending that will not promote wage inflation or empower labor or the poor. Why? Because as soon as there’s any threat of wage-price inflation, you will have a flight from the dollar by financial asset holders around the world, as you saw in 1978. The United States can be extravagant with military spending or tax expenditures, but not with redistributive social spending. The supply-side economist Paul Craig Roberts put it succinctly when he said that there are basically two kinds of deficits—Keynesian and non-Keynesian, inflationary and non-inflationary. Obviously, they preferred the latter."