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CronoDAS comments on Reflections on rationality a year out - Less Wrong
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Your comment reduces my confidence that I understand the term "externality". Until I read it, I tentatively believed that "X has positive externalities" means that X is an action taken voluntarily by a person (or firm) and has positive expected global utility. Most economic discourse assumes that all voluntary actions taken by a person (firm) have positive expected personal (organizational) utility. But in the present environment, counterfeiting money has according to my models negative global expected utility by reducing (by a small amount) the value of every asset denominated in the currency being counterfeited (e.g., cash and loans). (Counterfeiting is a member of the class or set of a diffuse harms, which by the way do not seem to get the attention they deserve here on Less Wrong.)
(Buying junk I do not want has negative global expected utility, too, under my models.)
The disagreement here isn't about the term "externality", it's about the consequences of counterfeiting.
Right now, the U.S. economy is in such a screwed-up state that injecting more currency into the economy (regardless of whether it's done legally by the Federal Reserve or illegally by counterfeiters) may indeed have net positive effects instead of net negative effects.
According to my preferred expert, the best macroeconomic model for our current situation is that of a demand shock brought on by the recent financial crisis: people lost a lot of money, which has led to a fall in aggregate demand (people are buying less stuff), which has led to a drop in output (people are making less stuff), which has led to higher unemployment (you don't need as many employees when you're making less stuff), which has led to a fall in aggregate demand (newly unemployed people no longer have the money to buy stuff)...
We don't seem to be in a downward spiral any more (unemployment stabilized at around 10%), but business investment is extremely low; corporations are sitting on cash instead of spending it to expand production because nobody is buying. Right now, the bottleneck to economic growth in the United States isn't productive capacity, but people's desire and ability to purchase finished products. We're at the point where having the government hire people to dig ditches and fill them up again, or even dropping cash from helicopters, would actually improve the economy.
(Note that in spite of the 2009 stimulus bill, government spending in the United States has actually decreased because spending by state and local governments has dropped more than federal spending has increased.)
On the bright side, at least the developing world is indeed continuing to develop, in spite of the mess the developed world has gotten itself into.