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> Our debt is in dollars. You know, those things that can be arbitrarily printed by the government anytime, and created out of thin air by financial institution

> Our debt is in dollars. You know, those things that can be arbitrarily printed by the government anytime, and created out of thin air by financial institutions (aka leverage). We can never run out of dollars. Money can always be printed, but not without consequences. (Just ask Germany or Zimbabwe). So yes it is literally impossible for the US to default on that debt unless it actively chooses to, but that doesn't mean that we can just rack up arbitrary amounts of debt without any negative ramifications.

jgeada 11y ago
Agreed 100%. I don't mean to imply that we should just arbitrarily add to the debt; my intent was just to point out the fallacy of the "sky is falling" type of argument around our debt. Historically, however, inflating ones way out of debt has been common. Additionally, the USA is unusual in that it is possibly the only economic powerhouse that is largely self-sufficient in most regards (raw materials, people, etc). We import most goods because they are more convenient, slightly cheaper or more tax advantageous to source elsewhere, not because we have to. One of the reasons the USA has tended to an isolationist attitude is because it could do so without much consequence. The world has much more to lose than we do should we should to inflate our way out of debt.
- chimeracoder 11y ago
  > The USA is unusual in that it is possibly the only economic powerhouse that is largely self-sufficient in most regards Hardly - the US could not maintain its current economy and standard-of-living as an autarky. The US is only able to maintain its current standard-of-living because of the massive amounts of work being down outside the country. Manufacturing in China is an easy example, but not the only one. > The world has much more to lose than we do should we should to inflate our way out of debt. Not really. Through a number of effects (both direct and indirect), if we were to try and inflate our way out of debt of this magnitude, we would tank our economy in the short- and medium-term, just the same way Germany, Zimbabwe, and Thailand did[0]. Those economies did recover in the longer run, but not without serious repercussions in between, and it can literally take multiple generations just to get back to the starting point, to say nothing of recovering the same global standing. There is no way the US would want to regress to the sort of economy that this would involve. It would be a total economic disaster. [0] This would be true even before we took into account the effect of no longer being the de facto global reserve currency (which would no longer be the case if we started printing hyperinflation-levels of money).
deleted 11y ago
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calibraxis 11y ago
The poster is correct: money is a social phenomenon which the US can create all it wants. (In fact, most of it is just numbers in databases. Points in a game. Those who control the game's rules have everyone wasting endless time life chasing these points.) More important than creating money is having by far the biggest guns. What does it mean to be owed a "debt" by the person who controls the currency and most of the guns? Yes, there are "consequences" to creating more money. Every act has consequences. If someone advises you to drink a lot of water, should I respond with counterexamples where someone drank from a firehose?
- Gibbon1 11y ago
  As far as consequences are concerned, traditional economics as opposed the the crap that currently in vogue teaches us the exact technique to deal with excess debt; wage and price inflation. That's how the US successfully retired it's WWII debt.

jgeada 11y ago

Agreed 100%. I don't mean to imply that we should just arbitrarily add to the debt; my intent was just to point out the fallacy of the "sky is falling" type of argument around our debt. Historically, however, inflating ones way out of debt has been common. Additionally, the USA is unusual in that it is possibly the only economic powerhouse that is largely self-sufficient in most regards (raw materials, people, etc). We import most goods because they are more convenient, slightly cheaper or more tax advantageous to source elsewhere, not because we have to. One of the reasons the USA has tended to an isolationist attitude is because it could do so without much consequence. The world has much more to lose than we do should we should to inflate our way out of debt.

chimeracoder 11y ago
> The USA is unusual in that it is possibly the only economic powerhouse that is largely self-sufficient in most regards Hardly - the US could not maintain its current economy and standard-of-living as an autarky. The US is only able to maintain its current standard-of-living because of the massive amounts of work being down outside the country. Manufacturing in China is an easy example, but not the only one. > The world has much more to lose than we do should we should to inflate our way out of debt. Not really. Through a number of effects (both direct and indirect), if we were to try and inflate our way out of debt of this magnitude, we would tank our economy in the short- and medium-term, just the same way Germany, Zimbabwe, and Thailand did[0]. Those economies did recover in the longer run, but not without serious repercussions in between, and it can literally take multiple generations just to get back to the starting point, to say nothing of recovering the same global standing. There is no way the US would want to regress to the sort of economy that this would involve. It would be a total economic disaster. [0] This would be true even before we took into account the effect of no longer being the de facto global reserve currency (which would no longer be the case if we started printing hyperinflation-levels of money).

deleted 11y ago

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calibraxis 11y ago

The poster is correct: money is a social phenomenon which the US can create all it wants. (In fact, most of it is just numbers in databases. Points in a game. Those who control the game's rules have everyone wasting endless time life chasing these points.) More important than creating money is having by far the biggest guns. What does it mean to be owed a "debt" by the person who controls the currency and most of the guns? Yes, there are "consequences" to creating more money. Every act has consequences. If someone advises you to drink a lot of water, should I respond with counterexamples where someone drank from a firehose?

Gibbon1 11y ago
As far as consequences are concerned, traditional economics as opposed the the crap that currently in vogue teaches us the exact technique to deal with excess debt; wage and price inflation. That's how the US successfully retired it's WWII debt.