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I think you have a gross misunderstanding of economics. The government doesn't just issue bonds. It sells them to buyers. It will have to pay interest on tho
by yequalsx 9y ago
I think you have a gross misunderstanding of economics. The government doesn't just issue bonds. It sells them to buyers. It will have to pay interest on those bonds to the holders of those bonds. There is a fiscal capacity for the nation in terms of repaying bonds. Things like tax policy, public policy, and projected GDP growth come in to play when buyers look at the risk of buying U.S. Treasury bonds. Risk in the form of interest is set and bonds are purchased. The paying of interest reduces the capacity of the government to spend on other things because the government absolutely does not have an infinite capacity to sell bonds. And saying, we'll just print more money is not helpful because if too much is printed then massive inflation can take hold which reduces the capacity of the government to spend.
- neilwilson 9y agoYes you do have a gross misunderstanding of sovereign currencies and how they work. Here's an explanation of how things actually work, from an actual economist: http://beta.latimes.com/opinion/op-ed/la-oe-kelton-pony-for-all-20170929-story.html http://beta.latimes.com/opinion/op-ed/la-oe-kelton-pony-for-...