3 ms·

Well in the cases of number 3, 5, 6 and 7 in these cases the Feds will just print the money - technically it is just a flip in their computer system and also in

by zby 6y ago

Well in the cases of number 3, 5, 6 and 7 in these cases the Feds will just print the money - technically it is just a flip in their computer system and also in practice the difference is not that big - it changes a fixed term debt to a on-demand debt. The only thing stopping it can be a political will - but I think the stigma of not paying debts is higher than the stigma of inflation - so most probably it will be done every time.

Gustomaximus 6y ago
> I think the stigma of not paying debts is higher than the stigma of inflation This would depend on the level of inflation. Higher than normal, probably. Extremely high, like ~30%+ its reset time I would suspect. With the printing money, there has to be a limit. Were in the middle of something far beyond normal at any other time. Maybe we'll get through it cleanly but I also suspect todays debt fuelled can kicking events will get taught to students in ~50 years time and they'll sit there going 'what were they thinking'.
- neilwilson 6y ago
  "With the printing money, there has to be a limit." Banks do it every time they lend, so that can't be the limiting factor can it. You're looking at the system incorrectly. Try it this way. To spend you have to have two things - liquidity to complete the purchase and something available to buy. Which gives you the obvious limit - spending stops when you run out of things to buy available for sale in the denomination at a price worth paying. So it stops automatically - largely because the pejorative "printing money" line has nothing to do with the control mechanism in the system. Money is a dynamic thing. Systemically it pops into being and disappears as required. "printing money" is just the accounting counterparty of "saving money". If you want to stop it or reduce it, simply delete everybody's monetary savings. That will cause all national debt to disappear by accounting identity.

by zby 6y ago

Gustomaximus 6y ago

> I think the stigma of not paying debts is higher than the stigma of inflation This would depend on the level of inflation. Higher than normal, probably. Extremely high, like ~30%+ its reset time I would suspect. With the printing money, there has to be a limit. Were in the middle of something far beyond normal at any other time. Maybe we'll get through it cleanly but I also suspect todays debt fuelled can kicking events will get taught to students in ~50 years time and they'll sit there going 'what were they thinking'.

neilwilson 6y ago
"With the printing money, there has to be a limit." Banks do it every time they lend, so that can't be the limiting factor can it. You're looking at the system incorrectly. Try it this way. To spend you have to have two things - liquidity to complete the purchase and something available to buy. Which gives you the obvious limit - spending stops when you run out of things to buy available for sale in the denomination at a price worth paying. So it stops automatically - largely because the pejorative "printing money" line has nothing to do with the control mechanism in the system. Money is a dynamic thing. Systemically it pops into being and disappears as required. "printing money" is just the accounting counterparty of "saving money". If you want to stop it or reduce it, simply delete everybody's monetary savings. That will cause all national debt to disappear by accounting identity.