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There is a branch of economics that feels that is exactly the case -- that national debt could be unlimited as long as its going back into the economy.

SoftTalker 4y ago
Spending money we don't have and will never repay except by printing more money is just another form of taxation. It never shows up on your pay statement, but the value of your dollars is diluted.
- nathancahill 4y ago
  That's true, but it's more palatable to Americans than tax increases.
  - AnimalMuppet 4y ago
    People aren't real happy about inflation these days. I think they're more unhappy about that than they are about taxes.
- ineptech 4y ago
  The purpose of monetary policy is to stimulate the economy, i.e. increase the value of dollars that are invested in something. The fact that it decreases the value of dollars that aren't invested is a feature, not a bug.
  - dragonwriter 4y ago
    > The purpose of monetary policy is to stimulate the economy no, its not. (1) Monetary policy doesn’t have just one purpose. (2) Sometimes one of its purposes is to slow rather than stimulate the econony. (3) Mostly its high-level purpose is economic stability.
    - ineptech 4y ago
      1) You responded as if I said, "the only purpose of monetary policy is to stimulate the economy as much as possible even if it introduces instability." Please don't do that. 2) You gotta read the thing I was replying to, and interpret my comment as a response to it, not as a standalone assertion. I think it's pretty obvious that I meant monetary policy resulting in inflation, as that's what they were complaining about, not all possible monetary policies in the abstract. The person I was replying to was saying that inflation is bad because it dilutes the value of savings, which is therefore sorta kinda like a tax. I'm saying, that's a terrible model; a better one is that monetary policy uses inflation to stimulate investment in order to grow the economy, and doesn't care if that dilutes your savings, because it wants you to invest those savings. If you disagree, say so, but argue with the whole thing, not with a sentence fragment taken out of context.
david927 4y ago
An economist who doesn't study history well enough is the definition of a fool.

SoftTalker 4y ago

Spending money we don't have and will never repay except by printing more money is just another form of taxation. It never shows up on your pay statement, but the value of your dollars is diluted.

nathancahill 4y ago
That's true, but it's more palatable to Americans than tax increases.
- AnimalMuppet 4y ago
  People aren't real happy about inflation these days. I think they're more unhappy about that than they are about taxes.
ineptech 4y ago
The purpose of monetary policy is to stimulate the economy, i.e. increase the value of dollars that are invested in something. The fact that it decreases the value of dollars that aren't invested is a feature, not a bug.
- dragonwriter 4y ago
  > The purpose of monetary policy is to stimulate the economy no, its not. (1) Monetary policy doesn’t have just one purpose. (2) Sometimes one of its purposes is to slow rather than stimulate the econony. (3) Mostly its high-level purpose is economic stability.
  - ineptech 4y ago
    1) You responded as if I said, "the only purpose of monetary policy is to stimulate the economy as much as possible even if it introduces instability." Please don't do that. 2) You gotta read the thing I was replying to, and interpret my comment as a response to it, not as a standalone assertion. I think it's pretty obvious that I meant monetary policy resulting in inflation, as that's what they were complaining about, not all possible monetary policies in the abstract. The person I was replying to was saying that inflation is bad because it dilutes the value of savings, which is therefore sorta kinda like a tax. I'm saying, that's a terrible model; a better one is that monetary policy uses inflation to stimulate investment in order to grow the economy, and doesn't care if that dilutes your savings, because it wants you to invest those savings. If you disagree, say so, but argue with the whole thing, not with a sentence fragment taken out of context.

david927 4y ago

An economist who doesn't study history well enough is the definition of a fool.