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Non-negative* yields on the inherently risk-free debt of a monetary sovereign imply that the monetary sovereign is like a household and that balanced budgets are desirable.
*Because of overhead costs, even 0% yield on the inherently risk-free debt of a monetary sovereign constitutes welfare proportional to account balance. So negative yields on the inherently risk-free debt of a monetary sovereign should be mandated** with the shortest maturity debt (physical fiat and private sector demand account balances at the central bank) costing the most.
** With a $250,000 or so exemption for individual citizens to encourage individual saving for emergencies and initial capital formation.
"Non-negative* yields on the inherently risk-free debt of a monetary sovereign imply that the monetary sovereign is like a household and that balanced budgets are desirable"
No it implies that the sovereign will appropriately compensate savers for deferring consumption...
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Non-negative* yields on the inherently risk-free debt of a monetary sovereign imply that the monetary sovereign is like a household and that balanced budgets are desirable.
*Because of overhead costs, even 0% yield on the inherently risk-free debt of a monetary sovereign constitutes welfare proportional to account balance. So negative yields on the inherently risk-free debt of a monetary sovereign should be mandated** with the shortest maturity debt (physical fiat and private sector demand account balances at the central bank) costing the most.
** With a $250,000 or so exemption for individual citizens to encourage individual saving for emergencies and initial capital formation.
"Non-negative* yields on the inherently risk-free debt of a monetary sovereign imply that the monetary sovereign is like a household and that balanced budgets are desirable"
No it implies that the sovereign will appropriately compensate savers for deferring consumption...
It's not a sovereign currency. If it was the government would set its value instead of allowing it to be set by private interests and speculation.
All part of the plan.
Moody's just put the ball on the tee for them to go after entitlements.
Enter stage left leave stage right.
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