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This 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 c
by jkhdigital 5y ago
This 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.