Debt is never a problem until you can’t pay it back. Then it can cause a chain reaction like happened in 2008. Did @EismanSteven see it coming?
US government debt is completely different than private debt. People get tripped up when they try to equate the two because they are both debt, but they don’t work the same way. The US government can’t run out of money any more than a bowling alley can run out of points. On top of that, US debt is denominated in US dollars, and on top of that, most US debt is held by US entities. For the most part, each dollar of US debt is a credit on a US entity’s balance sheet.
The dollar’s dominance won’t last forever, nothing does. But there is no particular problem at the moment with the US dollar or US debt. Steven Eisman is a breath of fresh air.
Nice summary of some of the major points in Stephanie Kelton’s The Deficit Myth.
Correct but if it’s risk free money, why not double the debt every year? Why the show of shutting down the government? Somehow it does not add up.
Heck, with s much free risk free money you could give every homeless $5,000 a month (BMI) and solve the homeless problem with zero pain. They would drive the economy just like the Chinese peasants that went to town to find a job did.
It does not add up.
You answered your question in your question.
Because it is a show. We only care about the debt at certain times when certain people are in power or out of power.
I’d appreciate you telling me what my answer was.
How about helping the homeless, it’s cost free! Just $5,000 of no risk free money.
Shutting down the government is performative governance. It is a show. It is what the magician does to mislead their audience from the sleight of hand. It is sound and fury signifying nothing. It is the tail wagging the dog. It is a sham.
Careful. Don’t confuse risk free and cost free.
The flaw in UBI is inflation. Give the homeless $5000 a month and watch rents skyrocket. Homelessness and housing supply are tightly linked. Right now, there just aren’t enough homes.
It’s as cost free as a company issuing and selling new shares to raise capital.
What is the cost of printing money?
Why is it better to give it to the top 1% instead of to the bottom 10%
So far all I have heard is that American public debt is risk free and apparently has no consequences. The first part has some support but the second has not been addressed. As soon as I bring up giving some to the bottom 10% all sorts of objections show up but so far without a reasoned hypothesis. I’d like to discuss some, bring them on.
Translation, punish the bottom 10% to keep the other 90% happy.
Translation, the American public pays the consequences of American government action. During the financial crisis big banks were bailed out but ordinary citizens were not. Ordinary citizens are not a danger to the system until they go for their pitch forks.
There isn’t enough built housing in many US cities. Giving the homeless money doesn’t change that. The US housing supply is largely constrained by zoning laws. In a free market, you could argue that giving the homeless money creates a market that real estate developers would fill by building cheap housing. Zoning laws, often an outgrowth of past racism, prevent this.
Perhaps the dynamic is different outside the US.
What you mean, or the article means, is: Zoning laws have sometimes been used for racist reasons. Don’t try to paint a false picture. I don’t think anybody anywhere wants to live in an area where anybody can just schlump on in and destroy it with their behavior. Or build a methylmercury plant next to the school, the bakery and across the street from the 'hoe-house." Nothing wrong with zoning laws.
As far as “well if only the government…blah blah… free markets … blah blah…” Government and The Law, broadly read as The Wishes of a free self-governing society, are, in every way imaginable, part of the genetic make-up of The Free Market.
There’s a lot of room between outlawing toxic industry next to schools and “nothing wrong with zoning laws.” The zoning laws that are implicated in the lack of housing are those requiring single family homes and outlawing denser multi-family development, not the thoughtful placement of industrial facilities.
In many ways the melting pot worked better in Venezuela. Maybe it was because the Conquistadores didn’t bring women from Europe.
That is truly funny replacing US debt in their portfolios with BTC.
The US debt will not be a problem because the debt to GDP ratio will be dropping.