So, here is a modern European democracy (the United Kingdom) repaying sovereign debt from 1720 in 2015. So if you think that government debt has to be repaid, then this observation would tell you: yes, but that can happen in almost 300 years. So, the good news is for the UK that whatever sovereign debt they run up now, repayment might come in 2300 only. What the lessons are for today is up to discussion. And if those living in the year 2300 do not like to repay, they can issue new debt and postpone repayment. Or they can tax those that they think should pay a bigger share. Whatever they do, this is only about the distribution of debt and hence income, not about the production potential of the UK economy in 2300. (If it still exists.)econoblog 101
The national debt has to be repaid – in some centuries time when interest rates are zero!
Dirk Ehnts | Berlin School for Economics and Law
2 comments:
it's not paying off debt, only 'refinancing' at low rates.
Yup. The national debt is constantly being repaid when it is used to pay taxes. Judging from using words like "debt" in a way that is a bit off, not understanding that money is always debt, etc I think that there are a lot of MMT fans who are shaky on the these basics.
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