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Government debt is completely irrelevant as long as the debt the government has is in its own currency that it can print more of. US government can print howeve

Government debt is completely irrelevant as long as the debt the government has is in its own currency that it can print more of. US government can print however much money it wants. It will never default because it can just create the credit. That’s what the Federal Reserve did with its zero interest rate policy. It distorts the economy, and the economy can shrink and be torn apart, but the government can always pay its debt by simply printing the money. The real problem lies with private debt, and that's what's actually leading to a default. When people default on their debt, they end up forfeiting property to the creditors. What we’re seeing now is a large scale transfer of property such houses and cars that people had bought, and so on, that they can no longer keep making payments on. this results in a transfer of income from the 90% to the 10%. The wealth transfer means that the working majority is pushed ever further to the margins. US is already in a situation where around half the population has no meaningful savings. https://www.cnbc.com/2023/10/03/americans-are-saving-less-in-2023-im-concerned-top-economist-says.html https://www.cnbc.com/2023/10/03/americans-are-saving-less-in... Having no savings puts people in a position where they're not able to absorb further unexpected expenses. This is what's making the economy so fragile.

s1artibartfast 3y ago
Government internal debt is a problem too because while, sure, you can print your way out of it, you are still devaluing the currency repaid. Take social security for example. You can print money to repay all the money borrowed from the fund, but in doing so, you have debased the currency it pays out. If a retiree is owed 100$, you pay it with printed money, so in theory they are made whole, but it no longer has the same purchasing power. It is a rug pull for the retiree.
- yogthos 3y ago
  That's not how fiat currency works. There is no direct relationship between the amount of currency in circulation and the value of the currency as expressed in the price of goods and services. The prices are set by people who own businesses based on how much they believe their consumers are willing to pay them.
  - s1artibartfast 3y ago
    nonsense. Double the currency in circulation and hold goods constant and you will deflate your currency. There is a clear and direct relationship. You can expand the money supply and amounts in circulation without inflation in the exact case where you expand the value goods and services in equal measure. Even then, the purchasing power of currency holders is less than the counterfactual where the money supply was not expanded and you had deflation as a result. Money drop a million printed dollars on each consumer, and prices will skyrocket. Are you trying to tell me that the expansion of the money supply in Venezuela has no direct relation to inflation.
    - yogthos 3y ago
      Once again, inflation is a result of business owners choosing to raise the prices. If money that's created goes directly to consumers, then it allows business owners to raise prices on goods. However, that's not what's happening when US government is printing money to pay off its debts. You appear to have an incredibly superficial understanding of how money supply works, and you appear to be just regurgitating tropes you've memorized.
      - holbrad 3y ago
        "You appear to have an incredibly superficial understanding of how money supply works, and you appear to be just regurgitating tropes you've memorized." The irony is off the charts.
        yogthos 3y ago
        an amazing counterpoint you've mustered there
      - s1artibartfast 3y ago
        >If money that's created goes directly to consumers, then it allows business owners to raise prices on goods. However, that's not what's happening when US government is printing money to pay off its debts. This is exactly what happens when the government expand the money supply to repay debt. It send out social security checks, pay workers, and buys goods. This puts money directly in the hands of consumers. You even agreed we are talking about an increase in the money in circulation. Are you walking that back and saying that money in circulation doesn't give consumers more money? The creditor of Government debt Is citizen consumers with benefit obligations. What about Venezuela? Consumers don't have more currency there either?

s1artibartfast 3y ago

Government internal debt is a problem too because while, sure, you can print your way out of it, you are still devaluing the currency repaid. Take social security for example. You can print money to repay all the money borrowed from the fund, but in doing so, you have debased the currency it pays out. If a retiree is owed 100$, you pay it with printed money, so in theory they are made whole, but it no longer has the same purchasing power. It is a rug pull for the retiree.

yogthos 3y ago
That's not how fiat currency works. There is no direct relationship between the amount of currency in circulation and the value of the currency as expressed in the price of goods and services. The prices are set by people who own businesses based on how much they believe their consumers are willing to pay them.
- s1artibartfast 3y ago
  nonsense. Double the currency in circulation and hold goods constant and you will deflate your currency. There is a clear and direct relationship. You can expand the money supply and amounts in circulation without inflation in the exact case where you expand the value goods and services in equal measure. Even then, the purchasing power of currency holders is less than the counterfactual where the money supply was not expanded and you had deflation as a result. Money drop a million printed dollars on each consumer, and prices will skyrocket. Are you trying to tell me that the expansion of the money supply in Venezuela has no direct relation to inflation.
  - yogthos 3y ago
    Once again, inflation is a result of business owners choosing to raise the prices. If money that's created goes directly to consumers, then it allows business owners to raise prices on goods. However, that's not what's happening when US government is printing money to pay off its debts. You appear to have an incredibly superficial understanding of how money supply works, and you appear to be just regurgitating tropes you've memorized.
    - holbrad 3y ago
      "You appear to have an incredibly superficial understanding of how money supply works, and you appear to be just regurgitating tropes you've memorized." The irony is off the charts.
      - yogthos 3y ago
        an amazing counterpoint you've mustered there
    - s1artibartfast 3y ago
      >If money that's created goes directly to consumers, then it allows business owners to raise prices on goods. However, that's not what's happening when US government is printing money to pay off its debts. This is exactly what happens when the government expand the money supply to repay debt. It send out social security checks, pay workers, and buys goods. This puts money directly in the hands of consumers. You even agreed we are talking about an increase in the money in circulation. Are you walking that back and saying that money in circulation doesn't give consumers more money? The creditor of Government debt Is citizen consumers with benefit obligations. What about Venezuela? Consumers don't have more currency there either?