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Government debt is not bad. Government debt is a net private surplus.
by SubiculumCode 5y ago
Government debt is not bad. Government debt is a net private surplus.
- jkhdigital 5y agoGovernment debt does not exist in a vacuum: it comes into existence because the government spent more money than it took in. What did it spend that money on? Ask the lobbyists.
- dragonwriter 5y ago> Government debt does not exist in a vacuum: it comes into existence because the government spent more money than it took in. No, it exists because government issued commitments to pay people money in the future. A government that creates its own currency has no need to do this to spend more than it takes in in revenue, and even a government that doesn't create its own currency is free to issue such commitments without a deficit.
- jkhdigital 5y agoThis makes no sense. The government doesn’t issue debt and then just sit on the cash. The debt ceiling is constantly being raised here in the US because every cent is spent. The two events (1) Congress deciding to spend money (in excess of receipts), and (2) the Treasury issuing debt, are directly causally related. If event (1) doesn’t happen, then event (2) won’t happen. In theory it could, but in reality it does not, period.
- dragonwriter 5y agoThe US Congress chooses to behave (approximately) as if it had a commodity rather than self-issued fiat currency, but this is a choice, not some kind of necessity.
- SubiculumCode 5y agoExactly. Just because we have a debt-guided mechanism does not make the currency not fiat. Those self-constraints can be changed or removed at any time.
- refurb 5y agoGovernment debt competes with private debt.