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>There’s a very good reason why we came off the so-called Gold Standard (bimetallic standard, actually), and why coming off it heralded the greatest period of e

>There’s a very good reason why we came off the so-called Gold Standard (bimetallic standard, actually), and why coming off it heralded the greatest period of economic growth in Western history. How sure are we that this was a good idea in the long run? Politicians and their appointees aren't always the most responsible people. If it's possible for them to obfuscate some of their spending without upsetting people then we could end up with quite a surprise later. The US already has a big debt problem. I get where you're coming from, but I'm just not sure whether we know the long-term consequences of this.

qubex 7y ago
> The US already has a big debt problem I’m going to stop you right there. You see a large public debt and you presume, because you view debt as all household agents do (i.e., as something that needs to be repaid and that limits future discretionary spending). It’s not necessarily that way for a nation-state that (as the article seems to recount) can literally print money to make good on the debts it is running up. The US has a big debt. A debt is, for households/firms/private individuals usually a “problem”, so a big debt would qualify as a big problem. But that doesn’t apply here. Who would be most alarmed by a true “debt problem”? The bond-holders, one presumes. And yet there’s apparently no limit to the willingness of market participants to lend money to the US and, judging by the yields on those bonds, no suspicion of default. There is no debt problem. There is just a big debt, because lots of money needs to be in circulation to support the massive amount of economic activity going on.
- Mirioron 7y ago
  The percentage paid as interest of the budget seems to be increasing. Current forecasts put it at over 12% by 2023. That's double what it was in 2016. At that point it'll rival US military spending in size. When would you say it becomes a problem? Does it have to become the highest cost item on the budget? The government is borrowing money that future taxpayers have to bear the burden of. Does the return on that extra spending outpace the servicing cost? >Who would be most alarmed by a true “debt problem”? The bond-holders, one presumes. That's only the case if the problem was that the US wasn't going to pay back its debt. The problem is that future generations are responsible for paying back the debt, not the current generations. This means that the people potentially most affected by this aren't even born yet.
  - qubex 7y ago
    Really it comes down to the present net value of future opportunity cost: of economic growth outgrows the compounded future cash flows to service the debt (particularly if debt principal and at least part of the interest due) can always be rolled over for the foreseeable future within the temporal horizon, it makes sense to accrue debt. We’re arguably lumbering future generations with just as much when we do not invest in basic science and technology development because of debt concerns; when we do not service our infrastructure; and most definitely when we act myopically towards the environment.
    - Mirioron 7y ago
      I get what you're saying, but how sure are we that this spending actually ends up improving lives more than the cost it will have in the future? Politicians aren't always the most honest and with a complex system it's possible to obfuscate people enriching themselves at the expense of the taxpayer. How sure are we that this won't be abused at any point?
      - qubex 7y ago
        If you’re concerned about future politicians’ probity, surely you should be partially worried that they may choose to default and keep all of those gains for their constituents and stiff the bondholders? See? Thinking about the future is pernicious in that policy makers have both more and less latitude than one tends to assume.

qubex 7y ago

> The US already has a big debt problem I’m going to stop you right there. You see a large public debt and you presume, because you view debt as all household agents do (i.e., as something that needs to be repaid and that limits future discretionary spending). It’s not necessarily that way for a nation-state that (as the article seems to recount) can literally print money to make good on the debts it is running up. The US has a big debt. A debt is, for households/firms/private individuals usually a “problem”, so a big debt would qualify as a big problem. But that doesn’t apply here. Who would be most alarmed by a true “debt problem”? The bond-holders, one presumes. And yet there’s apparently no limit to the willingness of market participants to lend money to the US and, judging by the yields on those bonds, no suspicion of default. There is no debt problem. There is just a big debt, because lots of money needs to be in circulation to support the massive amount of economic activity going on.

Mirioron 7y ago
The percentage paid as interest of the budget seems to be increasing. Current forecasts put it at over 12% by 2023. That's double what it was in 2016. At that point it'll rival US military spending in size. When would you say it becomes a problem? Does it have to become the highest cost item on the budget? The government is borrowing money that future taxpayers have to bear the burden of. Does the return on that extra spending outpace the servicing cost? >Who would be most alarmed by a true “debt problem”? The bond-holders, one presumes. That's only the case if the problem was that the US wasn't going to pay back its debt. The problem is that future generations are responsible for paying back the debt, not the current generations. This means that the people potentially most affected by this aren't even born yet.
- qubex 7y ago
  Really it comes down to the present net value of future opportunity cost: of economic growth outgrows the compounded future cash flows to service the debt (particularly if debt principal and at least part of the interest due) can always be rolled over for the foreseeable future within the temporal horizon, it makes sense to accrue debt. We’re arguably lumbering future generations with just as much when we do not invest in basic science and technology development because of debt concerns; when we do not service our infrastructure; and most definitely when we act myopically towards the environment.
  - Mirioron 7y ago
    I get what you're saying, but how sure are we that this spending actually ends up improving lives more than the cost it will have in the future? Politicians aren't always the most honest and with a complex system it's possible to obfuscate people enriching themselves at the expense of the taxpayer. How sure are we that this won't be abused at any point?
    - qubex 7y ago
      If you’re concerned about future politicians’ probity, surely you should be partially worried that they may choose to default and keep all of those gains for their constituents and stiff the bondholders? See? Thinking about the future is pernicious in that policy makers have both more and less latitude than one tends to assume.