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Relative to GDP, US debt is still far below countries like Japan. In fact during low interest times like right now it would be almost irresponsible not to take

Relative to GDP, US debt is still far below countries like Japan. In fact during low interest times like right now it would be almost irresponsible not to take on more debt, from a purely financial engineering perspective.

anm89 6y ago
This is an incredibly misleading argument to make to anyone outside of the econ or finance world who lacks context. Japan is an extreme outlier in terms of debt loads for stable developed nations and they are conducting an experiment with their economy that many think will end poorly (also many argue that it won't end poorly) The US's current debt load by percentage would have been a national outrage at any time in the last 100 years and we really have no idea how this game will play out. I would not trivialize it. 135% is a staggering and unprecedented for a major international power and the list of countries who have faced issues with smaller debt loads in the past is long.
- remote_phone 6y ago
  135% is staggering? What are the repercussions? Zero. None. The financial world doesn’t care. MMT is right here. People keep talking about how large debt will “ruin” the US but it hasn’t had any effect on the US and other countries. That’s why Japan didn’t suffer any of the theoretical downsides and neither will the US.
  - anm89 6y ago
    so why not go to 1000% ? 10000%?
    - remote_phone 6y ago
      MMT literally says why not
      - anm89 6y ago
        Yes, and this is why a majority of people knowledgeable about economics look down on mmt. Here's one reason you cant. The whole argument around mmt is based on our reserve currency status. Ie if you are Zimbabwe mmt doesn't work. But if you were to increase debt buy that much (ie increase money supply drastically) that's essentially economic warfare on our trading partners who rely on dollars. So the more we print the less attractive the dollar is as a reserve currency. But remember that first part? Inflation will kick in more rapidly the further we push people toward adopting other trade currencies and dollar demand drops. NOBODY who studies economic policy, not even any MMTer I've heard of advocates for a 1000% ratio because they understand it would break the international trade system. They simply think we can print a lot further than we have
  - maerF0x0 6y ago
    > People keep talking about how large debt will “ruin” the US but it hasn’t had any effect on the US and other countries. Yet. This argument can be viewed like smoking. I think the real question becomes what happens when the lender decides not to lend more because they realize they're never getting paid, or the call the loans and now they want what? Our businesses, our land, our children, our sovereignty? Also as money saturates a system, it gets used on less and less productive things. We'll see the results of spending a dollar (long run) to get a nickel (today).

anm89 6y ago

This is an incredibly misleading argument to make to anyone outside of the econ or finance world who lacks context. Japan is an extreme outlier in terms of debt loads for stable developed nations and they are conducting an experiment with their economy that many think will end poorly (also many argue that it won't end poorly) The US's current debt load by percentage would have been a national outrage at any time in the last 100 years and we really have no idea how this game will play out. I would not trivialize it. 135% is a staggering and unprecedented for a major international power and the list of countries who have faced issues with smaller debt loads in the past is long.

remote_phone 6y ago
135% is staggering? What are the repercussions? Zero. None. The financial world doesn’t care. MMT is right here. People keep talking about how large debt will “ruin” the US but it hasn’t had any effect on the US and other countries. That’s why Japan didn’t suffer any of the theoretical downsides and neither will the US.
- anm89 6y ago
  so why not go to 1000% ? 10000%?
  - remote_phone 6y ago
    MMT literally says why not
    - anm89 6y ago
      Yes, and this is why a majority of people knowledgeable about economics look down on mmt. Here's one reason you cant. The whole argument around mmt is based on our reserve currency status. Ie if you are Zimbabwe mmt doesn't work. But if you were to increase debt buy that much (ie increase money supply drastically) that's essentially economic warfare on our trading partners who rely on dollars. So the more we print the less attractive the dollar is as a reserve currency. But remember that first part? Inflation will kick in more rapidly the further we push people toward adopting other trade currencies and dollar demand drops. NOBODY who studies economic policy, not even any MMTer I've heard of advocates for a 1000% ratio because they understand it would break the international trade system. They simply think we can print a lot further than we have
- maerF0x0 6y ago
  > People keep talking about how large debt will “ruin” the US but it hasn’t had any effect on the US and other countries. Yet. This argument can be viewed like smoking. I think the real question becomes what happens when the lender decides not to lend more because they realize they're never getting paid, or the call the loans and now they want what? Our businesses, our land, our children, our sovereignty? Also as money saturates a system, it gets used on less and less productive things. We'll see the results of spending a dollar (long run) to get a nickel (today).