3 ms·
>It tells us how many years of productivity we owe. That's not accurate though. We can pay off the debt tomorrow and skip the years of productivity. It reall
by treis 7y ago
>It tells us how many years of productivity we owe.
That's not accurate though. We can pay off the debt tomorrow and skip the years of productivity. It really is an apples to oranges comparison. The debt isn't denominated in productivity. It's denominated in dollars that the government can create for "free". Of course there are knock on effects of creating enough dollars to zero out the debt, but it's not equivalent to the entire country working for years.
- 0x445442 7y ago> that the government can create for "free" One of the very smart things the U.S. has done is take a good portion of those printed dollars and invest in weapons which allow us to force the world to accept the same printed dollars. That's what really allows our government to be in that globally unique position. Resistance to this by other nations has various consequences. If you're a country that doesn't have a certain level of military deterrent you become victim of "regime change". If you are a country that meets that deterrent threshold you become victim of the foreign boogeyman FUD.
- treis 7y agoThat's not really accurate either. Switzerland and Japan aren't out there regime changing countries but their currencies are valued. The dollar is valued because the US is the largest economy and has a history of sound monetary policy.
- taylodl 7y agoNot only that, but the Nixon administration cut a deal with the Saudis to ensure that all OPEC oil would be sold in US dollars. This creates a demand for US dollars.
- onlyrealcuzzo 7y agoSimilarly, the Rubble is garbage, even with Russia flexing their guns.
- JohnFen 7y ago> It's denominated in dollars that the government can create for "free". The government cannot create wealth "for free". It can print more dollars, but in doing so it makes each dollar worth less. No wealth is actually gained. > there are knock on effects of creating enough dollars to zero out the debt Doing that is impossible, though. Reducing the value of a dollar means that you'll need even more dollars to repay that debt than you would have needed otherwise. There is no net gain here.
- treis 7y ago>The government cannot create wealth "for free". It can print more dollars, but in doing so it makes each dollar worth less. No wealth is actually gained. That's the point. The government isn't on the hook for wealth. They are on the hook for dollars. And dollars, to the US government, are "free". >Doing that is impossible, though. Reducing the value of a dollar means that you'll need even more dollars to repay that debt than you would have needed otherwise. There is no net gain here. The amount of debt doesn't go up if the value of the dollar goes down.
- marcosdumay 7y ago> The amount of debt doesn't go up if the value of the dollar goes down. The interest rate goes up almost instantly when the government prints money. That's not exactly equivalent to increasing the debt value, but it's more than enough to make the "just inflate it away" strategy fail 100% of the times some country tries it.
- sydhdhd 7y agoQuite simply you dont have a clue what you're talking about. It's like you're using a string of words to inflate away your total ignorance.
- kachurovskiy 7y agoImagine we have a company with 100 shares total. I have 1 share. Now you print 100 more shares and keep them. Sure, company is still the same but the wealth is redistributed, I have 2 times less of it. Same with US dollars. Half of them might be held by non-US persons. Another quarter by US population. Printing dollars is a wealth redistribution excersice and a very effective one.