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In Sweden, much of the national "debt" is between the government and the central bank. It could all be erased by decree and no one would be affected. The nation

In Sweden, much of the national "debt" is between the government and the central bank. It could all be erased by decree and no one would be affected. The national debt number truly does not matter. > You can't pay your groceries by taking a loan from yourself, No, but countries with their own currency can.

sandworm101 5y ago
The flip side is that by doing so they increase the amount of money in the market, decreasing it's value. So anyone holding that currency is less rich. In net effect it is spending money by reducing the value of that money.
- pibechorro 5y ago
  Making the middle class poor. Inflation punishes responsible savers.
  - simonh 5y ago
    It punishes people who save money in unproductive ways, such as stuffing it in a mattress. We want to encourage people to invest their savings productively, benefiting them and the economy. The middle class are generally very good at this, putting capital into pensions (which are invested), tax efficient savings schemes, shares and property.
    - vkou 5y ago
      This is correct. The middle class owns little in cash, but owe a lot in debt. Inflation eats a little of the former, and significantly lowers the burden of servicing the latter. Inflation isn't the thing they need to worry about. What they need to worry about is making sure their particular job's wage inflation is keeping up with the average.
  - CyanBird 5y ago
    > Inflation punishes responsible savers. You know that this is false, why say so? Putting your money under a mattress is not responsible, putting it on an investment which will accrue interest is, and imagine what. That interest will compound not only from inflation but ensuring good gains
- gumby 5y ago
  If you invest it (e.g. in long lasting infrastructure) it’s generally worth it. If you borrow to meet current obligations it’s generally not. (“Generally” is the kicker). There are other good reasons to borrow from a macroeconomic perspective (e.g. a liquidity crisis). In such a case you hope the side effects are less than the primary effects. This case is like the doctors’ Hippocrateic Oath: yes, first do no harm, but sometimes you have to cut a hole in the patient to heal them.
- owisd 5y ago
  It’s not particularly inflationary. If you remove $100bn of government bonds from circulation and replace it with $100bn newly printed cash, private sector net worth stays the same.
  - manquer 5y ago
    Hardly stays the same. That $100 billion cash is going to be spent somewhere, that increases money supply across the market, private sector now has more money but the actual resources produced has not changed that much.
- petters 5y ago
  No, erasing all that debt world not affect the amount of money in circulation. It would only affect the balance sheets of the two institutions. (The money is already in circulation)

sandworm101 5y ago

The flip side is that by doing so they increase the amount of money in the market, decreasing it's value. So anyone holding that currency is less rich. In net effect it is spending money by reducing the value of that money.

pibechorro 5y ago
Making the middle class poor. Inflation punishes responsible savers.
- simonh 5y ago
  It punishes people who save money in unproductive ways, such as stuffing it in a mattress. We want to encourage people to invest their savings productively, benefiting them and the economy. The middle class are generally very good at this, putting capital into pensions (which are invested), tax efficient savings schemes, shares and property.
  - vkou 5y ago
    This is correct. The middle class owns little in cash, but owe a lot in debt. Inflation eats a little of the former, and significantly lowers the burden of servicing the latter. Inflation isn't the thing they need to worry about. What they need to worry about is making sure their particular job's wage inflation is keeping up with the average.
- CyanBird 5y ago
  > Inflation punishes responsible savers. You know that this is false, why say so? Putting your money under a mattress is not responsible, putting it on an investment which will accrue interest is, and imagine what. That interest will compound not only from inflation but ensuring good gains
gumby 5y ago
If you invest it (e.g. in long lasting infrastructure) it’s generally worth it. If you borrow to meet current obligations it’s generally not. (“Generally” is the kicker). There are other good reasons to borrow from a macroeconomic perspective (e.g. a liquidity crisis). In such a case you hope the side effects are less than the primary effects. This case is like the doctors’ Hippocrateic Oath: yes, first do no harm, but sometimes you have to cut a hole in the patient to heal them.
owisd 5y ago
It’s not particularly inflationary. If you remove $100bn of government bonds from circulation and replace it with $100bn newly printed cash, private sector net worth stays the same.
- manquer 5y ago
  Hardly stays the same. That $100 billion cash is going to be spent somewhere, that increases money supply across the market, private sector now has more money but the actual resources produced has not changed that much.
petters 5y ago
No, erasing all that debt world not affect the amount of money in circulation. It would only affect the balance sheets of the two institutions. (The money is already in circulation)