Saturday, January 13, 2018

The Week Staff — The national debt, explained

MMT alert.

Could be better, but not bad.

The Week
The national debt, explained
The Week Staff


Andrew Anderson said...

, but not bad. Tom Hickey



Like any credit card user, the government must pay interest on its debt.

False. The US Government pays interest BY CHOICE. The US Government could instead sell all new debt directly to the FED for even NEGATIVE yields IF the FED charged even more negative* interest on non-government accounts it holds.

Theoretically, paying down the debt is simply a matter of spending less and collecting more in taxes.

Another option is to pay off existing sovereign debt with new, negative yielding sovereign debt which then would be a revenue PRODUCER rather than a revenue CONSUMER.

*with a, say, $250,000 or so negative interest-free exemption for all US citizens.

Tom Hickey said...

Yes, and when the government enters into an obligation, it must meet it.

It's a choice before, and not afterward.

No country can renege on debt service without serious consequence of default.

Andrew Anderson said...
This comment has been removed by the author.
Andrew Anderson said...

Yes, the US should meet existing obligations but it should not incur NEW obligations to provide welfare proportional to account balance but instead should charge for the risk-free storage and use of its fiat beyond an individual US citizen exemption for account balance and number of transactions.