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>> That's like saying I took out a million dollar loan and my bank account went up by a million so I saved a million. For many governments that issue currency,
by jonahbenton 6y ago
>> That's like saying I took out a million dollar loan and my bank account went up by a million so I saved a million.
For many governments that issue currency, particularly the US government, that is how it works. Not exactly the machinery, but close enough. To a first approximation, "debt" is just part of the money supply.
For you, it is not. It is a debt. Because: you are not a government. You do not issue currency. You are not immortal.
Cheers.
- anm89 6y agoIt would be much more akin to saying you generated a revenue or cash flow of a million in exchange for a liability of a million. It would require an extreme feat of verbal and mental gymnastics to call that savings. If creating debt == savings we would not limit ourselves to merely 135% because there is no downside to savings. The US is not immortal at least it is certainly not guaranteed to be. And as much as it hides the uglier realities of having to think through the mechanics of actually running a government, the assumption that the US has an unlimited capacity to monetize debt, even given it's current (and deteriorating) defacto reserve currency status, has never been a meaningful framework for thinking about monetary policy A condescending cheers back to you.