Comments by "Grim Affiliations" (@grimaffiliations3671) on "The US Debt Situation Explained" video.

  1. That's not true at all, it's because they have monetary sovereignty. All their debt is in their own currency, just like the US
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  2.  @Jose04537  No it doesn't, there is no can being kicked. the "national debt" is just a stockpile of US bonds, which were only sold in the first place to control interest rates. The US debt is perfectly sustainable because all of it is denominated in the governments own currency. You'd be tanking the economy and America's word for nothing
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  3. the debt ceiling makes no sense
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  4. Exactly
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  5.  @LuciferArc1  you contradicted your own point. First you said the value backing dollars is divided every time you print money, then you said that is only the case if the gdp does not increase. Which is it? does it devalue every time you print, or only when theres no growth?
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  6. what are the consequences of the debt? A functioning government? Growth?
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  7. that makes no sense at all. Each generation consumes from it's share of productive output, the national debt has no influence on the lives of future generations. Just like the previous generation was was not influenced by the debt racked up during world war 2.
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  8. Yeah, russia had a low debt to gdp ratio in the late 90's and still defaulted, meanwhile japans' debt is twice the size of it's entire economy and it's fine. What determines whether or not you default is whether or not your debt is in your own currency. If it is, you're fine
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  9. the reserve currency has nothing to do with why the US can operate the way it does, any nation with all of it's debt in it's own currency can operate this way
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  10.  @howardfriedman7077  The entity within the fed that conducts monetary and fiscal policy is the FOMC, which is an arm of the government. They are made up of the board of governors (which are appointed by the president, and confirmed by congress) and the presidents of the individual fed banks (which are appointed by the board of governors)
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  11. No, you cannot default on your own currency. America will be perfectly fine indefinitely
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  12. politics will be the only reason we're ever in danger of default. Our debt is perfectly sustainable
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  13. Debt does bad things to countries who take it in foreign currencies. If you're debt is in your own currency, then it cannot hurt you
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  14.  @noahjones9833  No, Japan would not default. Heck they've already retired half of their national debt
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  15.  @jonnyd9351  ?
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  16. ​ @LuciferArc1  So we agree whether or not spending causes inflation depends on the productive capacity of your economy?
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  17.  @arthas640  Democrats don't throw money on corporations, they throw money on things that help every day Americans like medicaid expansion, medicare negotiated drug prices, child tax credits, paid family leave that sort of thing
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  18. it is risk free, you can't default on your own currency
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  19.  @anton3437  every printed dollar doesn't have interest, the fed just sells bonds equivalent to the difference between spending and taxes, and those bonds are the ones with interest. But the fed only does that to control interest rates, they could deficit spend without selling bonds if they wanted to
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  20.  @lewis123417  Simply printing money isn't enough, you have to make sure all your debt is in your own currency. That's where other countries failed
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  21. read the deficit myth by stephanie kelton to know what money is really about
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  22. australia used to have a debt ceiling too, then it realized how dumb it was and got rid of it
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  23.  @LuciferArc1  No one is arguing we you print infinitely, we're saying inflation isn't inherent to printing, it depends what the productive capacity of your economy is
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  24.  @LuciferArc1  it's not wrong at all, if simply spending caused inflation, we'd ave seen elevated inflation throughout the 2010, rather than struggling t ohit inflation targets. We would have seen massive inflation during world war 2 also
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  25.  @LuciferArc1  like i said, if that were true we would have seen substantial inflation during the 2010's and during the war
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  26.  @LuciferArc1  in other words you don't have an answer
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  27.  @LuciferArc1  if it always causes inflation, explain why there wasn't high inflation during the 2010's, or the war, of japan for the past few decades. Just answer the question
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  28.  @LuciferArc1  If you acknowledge that inflation was prevented during the war by carefully managing resources, you're admitting that printing doesn't inherently cause inflation, it's about the management of resources. Growth was famously slow and anemic during the recovery of the 2010's, it certainly was not enough to mask excessive inflation. And then there's Japan, a country famous for very slow growth, who've been deficit spending like crazy for decades, with the highest debt to gdp ratio in the world, and yet has never dealt with an inflation problem. In fact they've been dealing with the opposite problem for much of that time, deflation
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  29. ​ @LuciferArc1  If you can avoid inflation by managing resources, then simply printing doesn't inherently mean inflation, which is what you're suggesting. You also haven't explained why their was both anemic growth and low inflation during the 2010 and in Japan over the past few decades
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  30.  @LuciferArc1  I'm saying printing money doesn't inherently devalue money, it depends of the productive capacity of the economy. Obviously there will be inflation if you print beyond the productive capacity of your economy
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  31.  @LuciferArc1  There's no decrease in value or excessive inflation if the productive capacity and real resources are there
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  32.  @LuciferArc1  what do you mean "after the inflation"? If the productive capacity already exists, then that inflation won't manifest at all, since the counter balance is already there in the form of adequate productive capacity
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  33.  @LuciferArc1  it doesn't have to print next to nothing for there not to be inflation, just like there can be inflation even with a balanced budget
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  34.  @LuciferArc1  then explain how a nation of anemic growth like japan has been able to print massive amounts for decades
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  35.  @LuciferArc1  they've been trying to get inflation up for a long time, they're currently succeeding after buying up half their national debt. That doesn't explain why they've had stubbornly low inflation for decades despite massive spending
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  36.  @LuciferArc1  "assets and trades to balance out their inflationary increases" That makes no sense, either their excessive printing causes inflation or it doesn't. Their assets or dollar reserves won't stop the rise in price levels as more money is pumped into the system. Japan didn't have a tonne of debt? they had the highest debt to gdp ratio in the world.
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  37.  @LuciferArc1  I'm not saying pumping money into your economy won't cause problems if you do so beyond the productive capacity of your economy, i'm saying there is no devaluation if you have the spare capacity to absorb it. Which is why there was no elevated inflation in 2010's america nor in Japan for most of the last few decades
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  38.  @TerryVogelaar  Companies panic about higher interest rates because it becomes more difficult to invest, which is ultimately what the fed wants when it raises rates. It's pretty much the only way they can fight inflation. But that doesn't change the fact that the fed is in complete control of it's interest rates, and thus they can never default. And it only has that much control over interest rates in the first place because all their "debt" is in their own currency. It's also why Japan hasn't defaulted despite having the largest debt to gdp ratio in the world, and deficit spending tremendous amounts of money for decades. So many people lost everything betting on Japan to default that it became known as a widow maker trade. I don't disagree with you that gdp is slightly outdated, i was just answering why they're considered the richest.
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  39. the reason the US doesn't have a debt problem is because they have complete control of their interest rates, as all their debt is denominated in their own currency. You cannot default on your own currency and investors know this. Only when you take up debt in foreign currencies is the market able to take control of your interest rates and cause you to default, this is what happened to Greece after 2008 and Russia in the late 90's
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  40.  @lipp1992  yeah, because you're a currency user, that makes sense. But the government is a currency issuer, whole different ball game
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  41.  @FictionHubZA  They can stop adding to the debt whenever they want, selling bonds are not necessary to finance government spending. But they don't want to get rid of the treasury market. The national debt could just as easily be called the national savings account
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  42. that wouldn't affect the government
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  43.  @tntmaxoderso2605  But the key thing is that the fed can choose to raise or lower it at their own discretion. And keeping interest rates low does not necessarily cause inflation
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  44.  @howardbaxter2514  But the nature of sovereign debt means you can conduct fiscal policy however you see fit regardless of any changes in trading patterns. Because a nation that borrows in it's own currency does not need domestic of foreign investors in order to spend or control their interest rates. The world could stop being favorable to the US, and it could lose it's reserve currency status and it would still be able to operate the same way. After all, plenty of non reserve currency nations operate this way today
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  45. That is why it is foolish to aim to cut the US debt. The private sector relies on government deficits
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  46.  @dairallan  Yeah, i know the US debt is not an issue. But how would Japan's debt to gdp ratio be responsible for their aging demographics?
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  47.  @dairallan  haha, then we're on the same page i think. Not sure why you came down on me like an op
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  48.  @cellb2619  50 years from now our debt will still be in USD, so we'll be perfectly fine
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  49. we don't have a debt problem. Debt only becomes a problem if you lose control of your interest rates, and that can't happen to a nation with all it''s debt in it's own currency
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  50. that's nonsense
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  51. the fed is an arm of the government
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  52. germany and greece did not have monetary sovereignty like the US does
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  53. you can't default on a currency you control so we'll never know
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  54. they don't have empire privileges, they just have monetary sovereignty like a bunch of other nations
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  55. some countries are immune to debt crisis
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  56. so?
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  57.  @miguelduarte75  how so?
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  58.  @miguelduarte75  Nope
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  59. it's not real debt when its in your currency
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  60. that's unironically true
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  61. what do you mean convincing liberal politicians is diffcult? Biden's whole thing is that we should focus on bottom up spending and moving more money through the working and middle class
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  62.  @ParagonFury  Cali is making some very big steps in that direction, a missing middle bill just passed in washington, new york's housing compact is also promising in getting rid of car dependency
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  63. the US would be able to operate that way even if it were not the reserve currency
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  64. nope cutting necessary
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  65. Clinton wasn't that long ago, but even he was wrong when it comes the national debt. He was bragging about achieving a budget surplus, but he wasn't bragging for long because his surplus caused a recession. Truth is, the private sector relies on government deficits. Government deficit = private sector surpluses. So by choosing to run a surplus as the government, you're just pushing the deficit onto us in the private sector. This will always lead to depression or recession
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  66.  @EdMan102292  Yes, only debt as a percentage of gdp matters, and since the fed has complete control of our interest rates, they will always make sure interest payments fall below the growth of our economy. Hence there is no debt problem
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  67.  @TheGladiator189  They absolutely do have complete control of our interest rates. I don't know what you mean "complete control of printing", of course they don't. Congress decides what we spend, the fed just makes the payments. The fed sets the overnight interest rate, and all other interest rates are set based on this base interest rate. The fed alone decides what the interest rate is on government bonds. And no, nothing would happen if China dumped our bonds, they sold 15% of their US bonds holdings in 2016, nothing happened to our interest rates
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  68. not true
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  69. and that's the most important difference
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  70. what is deglobalization? Because they certainly arent moving away from free trade
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  71.  @howardfriedman7077  the fed is an arm of the government
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  72.  @trod5902  then simply answer my question
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  73.  @LuciferArc1  I didn't ignore anything, like i said, you're dollar reserves should not mitigate inflation if you print massive quantities of money into your economy. And you still haven't' explained how the US was unable to hit inflation targets throughout the 2010's
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  74.  @LuciferArc1  leveraged position? You either pump your economy with printed money or you don't, no leverage would stop the following inflation
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  75. Check out stephanie Kelton's lecture on the Stony Brook University channel here on Youtube. She talks about how Clinton getting the budget to surplus actually ended up causing a recession because the private sector relies on government deficits. Governments deficits = private sector surpluses. You're right about deficits on things like healthcare and education being far better than deficits on things like war and welfare for the rich, but deficits themselves are not inherently bad. It's about where we are in terms of real resources and productive capacity, not the number that falls out of the budget box. She's also got a paradigm shifting book called The Deficit Myth that you could check out.
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  76.  @Thvndar  I don't think you're allowed to post links on Youtube, they'll delete your comment. You'll find it, it's called The Deficit Myth by Stephanie kelton
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  77. how is it bad for the economy?
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  78.  @opossumlvr1023  that#s not true, tax money is not used to pay interest, or do anything else for that matter. Federal taxes are deleted at the IRS, their purpose is not to finance government. There is no opportunity cost to interest payments, as there is no single pot of money from which the government can spend. When interest needs to be paid, the necessary bank accounts are marked up with newly created dollars. And loans are how banks create money, the federal government doesn't need to borrow from anyone in order to create new money
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  79. But the government doesn't need rich people to park its money anywhere to start creating money
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  80.  @David13ushey  i wouldn't say its a compromise between inflation and taxation. You can deficit spend without causing inflation or taxation
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  81. they're not unfunded
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  82.  @seneca983  you don't issue new bonds to cover the maturing ones, you just give back the initial amount when your done paying interest on it. And the government doesn't need investors to "lend" to it
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  83.  @seneca983  yeah, you get the initial amount from the bond buyer when they buy the bond. You just give it back when it matures. And no it doesn't, "borrowing" describes the process of selling bonds. Selling bonds is not done to finance the government, it was done historically to control interest rates
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  84. you're comparing a family budget to the government budget, that makes no sense. We're currency users, they're currency issuers. The government has all of its debt denominated in its own currency, you cannot default on a currency you control. Because of this, the fed has complete control of it's interest rates, and thus will always make sure interest rates fall below the growth of the economy
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  85.  @asdf3568  ?
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  86. doesn't matter if they sell bonds and the government doesn't need taxes to bay the bills
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  87. it already doesn't exist
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  88. Its not a big problem now, and it wont be in the future.
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  89. what do you mean head tax?
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  90. Because the national debt is not a real debt. If i owed you in a currency only i produced and controlled, how could i ever miss a payment?
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  91. ​ @TerryVogelaar  Historically, when the government spent more money than it received in taxes, it would sell bonds equivalent to the difference between those two numbers. So if it spent a $100 but only taxed $90, it would sell $10 of bonds. Those $10 of bonds would be added to the national debt and interest would be paid on it. But the government didn't sell bonds because it needed financing, it sold bonds as a way to control interest rates. However, today the government doesn't need to sell bonds to control interest rates, it just declares a desired rate, and that becomes the new interest rate making the whole process of selling bonds unnecessary They renegotiate the debt ceiling because of a very old law. The debt ceiling is completely dumb and unnecessary, they could get rid of it tomorrow like Australia did a while back and nothing would happen. It's a political problem that only crops up when government is divided The federal reserve is the nations central bank and an arm of the government. They were created by, get their authority from, and answer to the government. Yes, the individual reserve banks act as private banks, but the entity within the fed that actually controls fiscal and monetary policy is the FOMC, which is a government organization. The FOMC is made up of the board of governors (All are appointed by the president and confirmed by congress) and the presidents of the individual reserve banks (which are appointed by the board of governors) No, they are not the richest because they ignore the consequences of borrowing, in fact they don't actually "borrow" from anyone. The term "borrowing" is used to describe the process of selling bonds, which was done to control interest rates not finance government like i mentioned earlier. They're the richest because they generate the most gdp
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  92. you'll be waiting your whole life
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  93. you say "much less the interest" but there is nothing to pay but the interest. The national debt isn't a debt in the traditional sense. It's just a stockpile of US treasuries which are interest bearing dollars. The government offers people the chance to save their money in a special account that pays interest instead of their regular check in account. When the treasury matures, the government stops paying interest and returns the money that was saved. They just deduct money from your treasury account and credit money back into your check in account. It's not a big deal
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  94. ​ @jeffblackard9753  That's false. The US "borrows" from no one. The term borrowing is used to describe the process of selling bonds, which was never done to finance the government. Selling bonds was done historically to control interest rates, but they don't even need to control interest rates that way anymore, now they just declare an interest rate and that becomes the rate. So selling bonds are no longer necessary. Ask yourself why the government would need to borrow their own currency from anyone else. If you bought a thousands dollar bond, they pay the interest on it and give you back the thousands bucks when the bond matures. The "debt" is just a fancy savings account, one that pays interest. As for inflation, of course there's been a lot of inflation since the 60's, the fed target is 2% a year. 2% a year for 60 years will look like a lot when you look back.
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  95. why? Theres no opportunity cost to interest payments
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  96. How has japan been able to run their ponzi scheme then? The have a higher debt to gdp ratio, no reserve currency and no military
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  97. yes
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  98. democracy
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  99. there are no debts that need correcting, a debt that is due in your own currency is nothing to worry about
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  100.  @cisium1184  He's right.
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  101. republicans should be ashamed of themselves for playing these games
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  102. taxing billionaires goes to offsetting spending, not paying off the debt
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  103. is it really reckless?
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  104. that's inline with 2% inflation, which is the target....
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  105. Japan just retired half its debt, no more interest payments to worry about
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  106. we'll get neither
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  107. it won't fail to pay it's debt tho, they will raise the ceiling. This is just political games from the republicans
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  108. no
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  109. cities and states are in the same boat. Only the feds can generate money, and i guarantee you it's not fake
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  110. no it won't. And congress won't address the debt problem because we don't have a debt problem
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  111. that line of reasoning makes no sense
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  112. Exactly, what kind of first world country doesn't have universal healthcare or paid sick/family leave? But no, the US can't default because all the debt is in our own currency.
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  113. it also has the perk of having all of its debt in its own currency, hence it can never lose control of its interest rates
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  114.  @aidanholihan466  zimbabwe took on debt in a currency it did not control
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  115. thats how it works for every country
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  116.  @Lithilic  my point was not finding treasury buyers wont have any affect, the government doesn't need them in order to spend
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  117.  @seneca983  Not true, federal taxes actually do get destroyed by they IRS. The government doesn't need or use our taxes in order to spend, they make us pay them for different reasons
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  118.  @seneca983  Not true, federal taxes do not go to the government. They are deleted by the IRS, look it up
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  119. but it is not funded on debt in the traditional sense. Government debt is not the same as that of a private citizen, they don't need to borrow in order to spend. Also it doesn't make sense to say this borrowing is costing future generations, since they cant come back in time and pay us
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  120. it wont be an issue in the future either
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  121.  @howardbaxter2514  We'll be fine when the world decides not to invest in us, because foreign investment does not determine our ability to conduct fiscal policy as we see fit. That's the beauty of sovereign debt, you cannot default on debt denominated in your own currency
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  122.  @mephistoss238  It is sustainable, debt to gdp ratio is not what determines your vulnerability to default. Russia's debt to gdp ratio was low when they defaulted in the late 90's, meanwhile Japan's debt has gone up as high as 250% and yet they've never come close to default. Whats the difference? One had sovereign debt, and the other had debt denominated in foreign currencies. That is the key to assessing your potential for default, how much of your debt is in someone else's currency. If anything is unsustainable, it's a balanced budget. Because the private sector relies on government deficits to stay afloat. If the government balances its budget, it would be pushing the deficit onto the private sector, thus causing a recession. Every recession in US history has occurred after a period of deficit reduction
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  123. none of the above
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  124. not true at all
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  125.  @philipb2134  that's also the case with the US
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  126. no, that doesn't even make sense. How would kids of the future pay us today? Would they send money back in time?
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  127. not how it works
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  128.  @177SCmaro  Every generation consumes from it's share of productive output. It makes no sense to say future generations will pick up the tab since it's impossible for them to send goods and services back in time to pay us
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  129.  @177SCmaro  You clearly don't understand how debt works, each generation consumes from it's share of output, regardless of what the national debt is. They won't be paying anything, just like you didn't have to pay the debt racked up during world war 2
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  130.  @177SCmaro  Debt on the interstate highway? What are you talking about? Gas taxes haven't been enough to cover that in many years. And even if it were paid off, that doesn't mean you paid for it. Also whether or not future generations deal with inflation depends on how they manage real resources, just like is the case for this generation
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  131.  @177SCmaro  It hasn't been paid off, expenditures have exceeded revenues for over a decade. But assuming it was paid off, it would be paid for by the federal government, not you. Believe it or not, there's no such thing as taxpayer money on the federal level, the government doesn't need or use our money, so not only will future generations not be paying for the national debt, you aren't either. You seem to be confusing the word "debt" as though government debt is the same kind of debt we have as private citizens, it's very different
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  132. ​ @177SCmaro  That's not at all how it works, the government not only have their own money, they are the primary source of all the money we transact with. Federal taxation doesn't exist to fund the government, it makes no sense to say that when the money we're using to pay the tax came from them in the first place. The government makes us pay federal taxes to create demand for the dollar and to provision itself with things such as a police force a court system and a military. Taxes create unemployment, they create people looking for paid work in order to cover their tax obligations to the state, this promotes productivity. That's what the government wants when it taxes, it wants your labor, not your money. Why would it need your money when it makes the stuff? And there are definitely more fundamental difference between public and private debt. Government debt isn't even "debt" in the traditional sense, it just describes the current stock pile of US treasuries that the government has allowed investors to accumulate to monetize their savings. Also a private citizens must borrow when they spend more than their income, while borrowing is not necessary for the government
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  133.  @177SCmaro  Did you even read my comment? About what the purpose of federal taxation is? The federal government doesn't need to produce anything of value, they have monopoly control over the US dollar, they create new money whenever they feel like. Like i said, the money we use to pay taxes had to first come from the government, so it makes no sense to say taxes serve a financing purpose for the federal government. And the government doesn't need to borrow its own money from anyone else in order to spend, what we call government borrowing is just the process of selling US treasuries, which were done historically to control interest rates, not to finance the government. The government doesn't need to regulate interest rates by selling bonds anymore, today they just declare an interest rate and that becomes the new rate. So the government could literally deficit spend without adding to the national debt if it wanted to. And the international theft thing ties into the nature of government spending. You hold the mistaken view that federal taxes are spent by the government, when they are in fact simply deleted at the IRS. You cannot steal something from future generations that is funded by public money. that is, money digitally minted out of thin air
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  134. its perfectly legal, and the perfect answer to a dumb thing like the debt ceiling
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  135. They don't need to raise taxes to pay interest, and they never have. They just credit the necessary accounts on a keyboard at the fed. That's it
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  136. why? if you're going to save your money you may as well do it in an account that pays interest, doesn't necessarily have to offset inflation
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  137. yup
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  138. there is no debt ceiling, it will simply be lifted
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  139.  @DawingmanT900  And bills are being paid, through growth
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  140. well our children won't be paying for it, just like the previous generations didn't pay for world war 2
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  141. What is? Our debt is perfectly sustainable. And Voting dems = voting yourself money Voting republican = voting the elites and military industrial complex more money. I know which i'd choose
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  142. A balanced budget is actually terrible for the economy and cannot be sustained. The private sector depends on government deficits because they are the only way for the private sector to receive net financial assets. In other words, government deficits = private sector surpluses. So by running a balanced budget, you are just pushing the deficit from the government onto the private sector. This will always cause recession. Thats why every depression in US history has occurred after a period of deficit reduction
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  143.  @hs5312  greece did not control its currency
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  144.  @seneca983  argentina took on debt in a currency it did not control
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  145.  @seneca983  i think by monopoly in violence he was referring to their military, Argentina certainly does not have the military to defeat foreign creditors. But it's not even about militaries, it's about whose currency the debt is in. Id it's your own currency, like with the US, Japan, China etc you can't default
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  146.  @ruukinen  None of what you listed is necessary to service our debt.
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  147. the US will be fine if it were replaced as the worlds reserve currency, but the only way for china to be the ones replacing them would be for them to run massive trade deficits
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  148. The fed has ironclad control of our interest rates, so they will always make sure interest payments fall below the growth of our economy. I wouldn't say our reserve currency status has any bearing on inflation. What do you mean look at the UK now? You make it seem like they defaulted and are currently dealing with hyper inflation. They're fine
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  149.  @tntmaxoderso2605  But the fed has full control of interest rates when the debt is in your own currency. They can lower or raise them at any time, regardless of the the debt
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  150. The government operates very differently to any business, we are currency users, they are currency issuers. It's actually a good thing when the government runs deficits, because government deficits translate to private sector surpluses. If the government stops running deficits, the private sector will be pushed into deficit, and eventually we'll have a recession. Every depression in US history has occurred after a period of deficit reduction
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  151. Billionaires should definitely be taxed, but dont make the mistake of thinking we need them. Besides, getting rid of the deficit isn't even a good thing. The private sector relies on government deficits, because government deficits = private sector surpluses. Getting rid of the government deficits would just push the deficit onto the private sector, which would cause a recession/depression. Check out a book called the deficit myth to find out more
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  152. No, nothing would happen to the US if China dumped its US bonds. They dumped 15% of their US holding in 2016 and nothing happened. US interest rates are controlled by the fed and nothing else
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  153. what you said made no sense
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  154. You in a red state?
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  155. Sri lanka collapsed because they were not monetarily sovereign. They had debt in foreign currencies
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  156. reserve currency isn't why the US is able to operate the way it does
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  157.  @KageNoTenshi  they could operate this way without guns or the reserve currency. Japan doesn't have the reserve currency or a standing army, yet it operates it ways even more foolhardy than the US. Their debt is over twice the size of their whole economy
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  158.  @KageNoTenshi  But im talking about their fiscal policy, the same rules apply to them as the US. Even though they are not the reserve currency
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  159. neither will happen
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  160.  @MisterTrollypolly  don't just throw around scary sounding words next time
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  161.  @MisterTrollypolly  have a lot more of a clue than someone throwing around scary words he has no idea about
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  162.  @MisterTrollypolly  so you don't know what sovereign debt is without saying you don't know what sovereign debt is
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  163. The US debt situation is perfectly sustainable though
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  164.  @tmharperjr  when they US starts taking up debt in a currency it doesn't control
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  165. You're starting to see it. The money the government pays out doesn't depend on the money they generate. They control the dollar, which means they can pull it out of thin air whenever the want. How do you think they spent all those trillions in stimulus checks when no ones taxes went up? Money is just numbers on a screen
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  166. no we're not. And us having the reserve currency isn't why we're able to print as much as we want
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  167. The peaks and valleys are not larger now than they were pre fed. We haven't even had a depression in the fiat era. Things were far worse back during the gold standard when we had a full blow depression every few years which took years to recover from. The government can and should intervene to prevent recessions from turning into depressions.
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  168. the US doesn't take loans, it just spends its own money
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  169. Japan doesn't have the reserve currency and its been borrowing and borrowing for decades. Currently has the highest debt to gdp ratio in the world, yet it hasn't come close to defaulting
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  170.  @wertywerrtyson5529  You should read a book called The Deficit Myth, it highlights how Japan is able to operate the way it does, and points out that other countries like the US, China and Australia can operate the same way. It is because of something it calls "monetary sovereignty". A nation that borrows in it's own currency, and which has food and energy independence, can never be pushed into default
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  171. so?
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  172. it's austere when done by the government, hence austerity
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  173.  @TreeLuvBurdpu  It's austerity when the government doesn't spend it's money. Your money adds nothing to the federal government's budget, it gets debited out of existence when you pay it. Also the government has to spend first for there to be such a thing as "your money"
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  174.  @TreeLuvBurdpu  and where do you suppose the money you use to pay taxes comes from?
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  175. no it aint
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  176. no, that isn't the only thing contributing to it's stability
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  177.  @vincentb5119  it's also one of the only countries in the world willing to run large enough trade deficits to have their currency accessible to countries all around the world. But my point is that the US could lose it's reserve status tomorrow and be just fine
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  178.  @vincentb5119  i agree but the most important factor in US economic stability is having all of it's debt denominated in it's own currency. Few nations can boast that
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  179. nope
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  180. in this case its true, you can't default on your own currency
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  181. these is no debt crisis
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  182. By getting unemployment to a 50 year low?
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  183. tech bros being fired has no baring on the real world
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  184. you're right. The real reason not to worry is that our debt is denominated in our own currency. and you cannot default on your own currency
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  185. the US has actually responded to the covid inflation better than pretty much everyone else
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  186.  @cellb2619  People have been saying that for over a hundred years. You realize selling bonds itself is optional right? The government offers them to give people a source of income.
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  187. the government can deficit spend without adding to the debt if it makes people feel better. They only sold bonds in the first place to control interest rates, not because they needed financing
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  188. No he isn't, inflation would be back down to 2% if not for rent prices going up. Rent is going up because of the housin shortage, not biden's spending
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  189.  @Full-of-bs  No, they're not mandated, they hold it in reserve because it's attractive
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  190.  @Full-of-bs  and that universal practice is not why the US is able to operate the way it does
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  191.  @Full-of-bs  imagine thinking government needs to borrow its own money from other before it can spend it
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  192.  @Full-of-bs  purchases from the federal reserve? The fed is our central bank, they conduct our monetary and fiscal policy, we don't purchase anything from them. The US borrows from no one. The term "borrowing" is used to describe selling bonds, which is something the fed does to control interest rates indirectly. We don't sell bonds to finance government spending And no, our reserve status is not why were' able to operate the way we do.
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  193.  @Full-of-bs  You thought we actually needed investors to spend?
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  194.  @Full-of-bs  Also selling bonds aren't even necessary for controlling interest rates anymore, now the fed just declares a desired rate and that becomes the new interest rate. So we can deficit spend without adding to the debt if we wanted to. Pretty cool
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  195.  @Tounguepunchfartbox  How about actually making your point instead of contributing nothing of value
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  196.  @Tounguepunchfartbox  So in other words, you have absolutely nothing to contribute. Talk about a waste of time 🙄
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  197.  @Tounguepunchfartbox  whatever dude, get back to me when you become informed enough to contribute
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  198. no taxes need to be increases, money is nothing more than numbers on a screen. The fed will just mark up the necessary bond holder accounts with whatever number is due.
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  199. Printing dollar does not necessarily cause inflation. And reaching a surplus is not actually a good thing, because the private sector relies on government deficits. Deficits are the only way for the private sector to receive net financial assets. In other words government deficits = Private sector surpluses. So by balancing the budget you're just pushing the deficit onto us in the private sector, This is why every depression in US history has occurred after a period of deficit reduction. Also, paying interest does not prevent the government from spending on domestic priorities to promote growth. Japan has dealt with stagnation due to an aging demographic and high consumption taxes
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  200. ​ @TheRealMjb2k  Government surpluses translate directly into private sector deficits. The two are linked. So by generating a government surplus, you're simply pushing the private sector into deficit, and unlike the government the private sector cannot sustain deficits so they ultimately fall into recession. Every depression in US history has occurred after a period of deficit reduction. Currency operates differently to regular items that have less value the more common it is, with currency it depends on the speed of circulation, if you have adequate productive capacity, the economy will absorb those new dollars, and you'll have no inflation Printing trillions to pay the interest on US bonds won't cause inflation because only a fraction of interest payments are actually spent and almost all of it that is covers existing obligations. Highly unlikely to cause inflation. The US will never have a lending problem because it doesn't actually need lenders. It doesn't need to borrow it's own currency from anyone, the process they call "borrowing" is just the selling of US bonds. But they never sold bonds to finance government spending, bonds were only ever sold as a way of indirectly controlling interest rates. And even that is no longer necessary, nowa days they just declare an interest rate and the becomes the new rate, no bond selling needed. So technically the government could deficit spend without adding to the national debt if they wanted to
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  201. no they're never a problem if your debt is in your own currency
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  202.  @ThePhiphler  And they will be worth something, there's nothing to indicate we'll lose productivity to the extent that entitlements will be worthless. Especially considering advancements in AI will make us many times more productive even with fewer workers
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  203.  @ThePhiphler  Do you remember how frequently recessions and depressions happened while we were on the gold standard? We're way better off now, there;s a reason no one can fight a war while on the gold standard, it limits you way too much. The real wage decline has more to do with the fall of unions than anything else. So what if interest payments get that big? It's not like it stops us from being able to spend on other priorities. We stop selling bonds right now if we wanted to and still continue deficit spending
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  204. the US doesn't need to negotiate interest rates with anyone, it just declares its interest rate
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  205.  @nerdlingeeksly5192  That's false. The US "borrows" from no one. The term borrowing is used to describe the process of selling bonds, which is not done to finance the government. Selling bonds was done historically to control interest rates, but the they don't even need to control interest rates that way anymore, now they just declare their interest rates
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  206. the us doesn't repay principle, it just pays interest on it and returns the principle
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  207. @dd it makes perfect sense
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  208. nothing is causing problems. The US debt is perfectly sustainable, because the fed has ironclad control of our interest rates. They will always make sure inters payments are below the growth of the economy
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  209.  @MegaLokopo  It will always be enough, but most politicians don't understand economics or the financing of a monetarily sovereign nation like the US
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  210.  @MegaLokopo  But the important thing is it;s the fed and the fed alone that determines the interest rate
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  211.  @MegaLokopo  they can raise or lower it as they see fit, if high interest rates cause a slowdown, they can lower it and vice versa
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  212.  @MegaLokopo  of course they do. They will always make sure interest payments fall below the growth of the economy
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  213.  @MegaLokopo  why would lower interest rates push the economy into a depression? That would make spending and investment easier
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  214.  @MegaLokopo  low interest rates don't = inflation. interest rates were low throughout the 2010's with inflation falling consistently below inflation targets
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  215. This is one of the main arguments on the liberal side, the conservatives tend to put more focus on the spending but what if they're both wrong? Have you considered that there isn't anything inherently good about a balanced budget? The government doesn't need to tax away everything it spends, in fact leaving some money in the system is the only way the private sector can stay afloat. A balanced economy is more important than a balanced budget. Whatever deficit is needed to foster full employment and low inflation is the right deficit. I highly recommend a book called the Deficit Myth if you're interested in the school of thought
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  216. aint gonna happen, sorry to disappoint
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  217. While that sounds worrying, here's some context. US debt is denominated exclusively in US dollars, and since you can't default on your own currency, there isn't now nor will there ever be a debt crisis
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  218.  @bluntape9897  We're not trade partners in one currency tho, the buying nation uses their currency to buy the currency of the selling nation
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  219.  @bluntape9897  it's not a myth, it's just that the special status of the US dollar isn't why its able to operate the way it does. It can operate that way because it has monetary sovereignty, it issues a non convertible fiat currency and has all of it's debt in it's own currency. You cannot default on your own currency
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  220.  @NickOloteo  money supply caused caused covid?
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  221.  @MaxM227  the US will still be able to print however much they want.
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  222.  @jeffhurtson5211  nah, historically they sold bonds as a way of controlling interest rates. Selling bonds is no longer necessary as the fed now sets interest rates simply by declaring it
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  223. no, just governments who borrow in their own currency
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  224. The US doesn't need treasury buyers in order to spend. Selling bonds is just a method they used in the past to control interest rates. They don't even need to do that anymore as nowa days they just declare a desired rate and that becomes the new interest rate
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  225. supply of dollars in infinite, its just numbers on a screen
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  226.  @Monkey_D_Luffy56  that would be like the gold standard, which would be terrible for the economy
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  227. read a book called the deficit myth, you'll see how politicians have fearmongerred about the debt for decades
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  228. yes, you can't default on your own currency
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  229. also he clearly hasn't read the deficit myth
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  230.  @puffinbasher  You are comparing the government budget to a household budget, that is your big mistake. The government budget is nothing like a household budget, they are currency issuers, we are currency users. The government doesn't need to borrow it's own money in order to spend, it just creates it.
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  231. warned us about what? Republicans refusing to increase the debt ceiling like they did 3 times under trump
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