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The analogy to the US public debt is a bad one, since the US public debt is simply the private sector savings. It should be called the National Savings Account

The analogy to the US public debt is a bad one, since the US public debt is simply the private sector savings. It should be called the National Savings Account or something to that effect. It's only debt in the sense that it eventually refluxes back to the issuer (the US Gov) after a substantial dwell time in the private sector, which is where it serves its actual purpose: to be the unit of account and denomination which private commercial transactions are settled in. The US Gov is never at risk of being insolvent or defaulting on the thing that it alone can issue. Read more about MMT economics if you're curious.

nickff 6y ago
Well, you're skipping over the fact that a great deal of US government debt is held by the social security administration, which basically makes it an accounting trick, one that would be illegal if done by a private company (and for good reason).
tgv 6y ago
I think the writer doesn't mean financial debt, but problems accrued in society due to lack of responsible maintenance over many years, so to speak.
opo 6y ago
>...Read more about MMT economics if you're curious. MMT (“Modern Monetary Theory”) is rejected by most mainstream economists. The major proponents are politicians. http://www.igmchicago.org/surveys/modern-monetary-theory/ http://www.igmchicago.org/surveys/modern-monetary-theory/
- dragonwriter 6y ago
  > MMT (“Modern Monetary Theory”) is rejected by most mainstream economists. Modern Monetary Theory isn't a descriptive theory operating in the space of econonics (it's descriptive aspects are purely noncontroversial conventional economic theory), but normative/analytical theory of government policymaking in the area of finance (and, perhaps more critically, of describing government finance policy) that suggest abandoning norms and descriptions based on the fiction of the fisc (from whence “fiscal” policy gets its name), as there is no finite purse of externally created money that a government operating in it's own fiat currency must fill by taxes and borrowing in order to have money to spend. Government introduces money when it spends and destroys it when it collects, and the key things that ought to be of concern is the monetary effects of that creation and destruction and the distributional effects of how it is spent and from whom it is collected. Conventional economics disagrees not at all with the descriptive pieces of this, though, yes, many economists oppose the normative aspects and prefer that governments honor the fiction of the fisc as if it were a real thing, while recognizing that it is, in fact, not. It's also true that many economists prefer a closer balance of the two sides of the revenue and spending sides of the imaginary fisc (presumably, their preference for maintaining the illusion is because they think that this contributes to their preferred policy outcome) then many MMT advocates do, though that divergence of opinion is technically outside of the domain of either descriptive economics or MMT, which doesn't prescribe any particular preference as regards the imaginary balance of the imaginary fisc.
- petrocrat 6y ago
  > rejected by most mainstream economists The mainstream econ record is lately not one to be boasting about. >The major proponents are politicians. Incorrect, You'll find the major proponents are academics at University of Kansas City Missouri, The Levy Institute and Bard College in NY.

nickff 6y ago

Well, you're skipping over the fact that a great deal of US government debt is held by the social security administration, which basically makes it an accounting trick, one that would be illegal if done by a private company (and for good reason).

tgv 6y ago

I think the writer doesn't mean financial debt, but problems accrued in society due to lack of responsible maintenance over many years, so to speak.

opo 6y ago

>...Read more about MMT economics if you're curious. MMT (“Modern Monetary Theory”) is rejected by most mainstream economists. The major proponents are politicians. http://www.igmchicago.org/surveys/modern-monetary-theory/ http://www.igmchicago.org/surveys/modern-monetary-theory/

dragonwriter 6y ago
> MMT (“Modern Monetary Theory”) is rejected by most mainstream economists. Modern Monetary Theory isn't a descriptive theory operating in the space of econonics (it's descriptive aspects are purely noncontroversial conventional economic theory), but normative/analytical theory of government policymaking in the area of finance (and, perhaps more critically, of describing government finance policy) that suggest abandoning norms and descriptions based on the fiction of the fisc (from whence “fiscal” policy gets its name), as there is no finite purse of externally created money that a government operating in it's own fiat currency must fill by taxes and borrowing in order to have money to spend. Government introduces money when it spends and destroys it when it collects, and the key things that ought to be of concern is the monetary effects of that creation and destruction and the distributional effects of how it is spent and from whom it is collected. Conventional economics disagrees not at all with the descriptive pieces of this, though, yes, many economists oppose the normative aspects and prefer that governments honor the fiction of the fisc as if it were a real thing, while recognizing that it is, in fact, not. It's also true that many economists prefer a closer balance of the two sides of the revenue and spending sides of the imaginary fisc (presumably, their preference for maintaining the illusion is because they think that this contributes to their preferred policy outcome) then many MMT advocates do, though that divergence of opinion is technically outside of the domain of either descriptive economics or MMT, which doesn't prescribe any particular preference as regards the imaginary balance of the imaginary fisc.
petrocrat 6y ago
> rejected by most mainstream economists The mainstream econ record is lately not one to be boasting about. >The major proponents are politicians. Incorrect, You'll find the major proponents are academics at University of Kansas City Missouri, The Levy Institute and Bard College in NY.