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> Why bother with a budget when we just borrow/print our way out of any budgetary limits we don't like? I think this is the wrong question to ask of the govern

by throwway120385 3y ago

> Why bother with a budget when we just borrow/print our way out of any budgetary limits we don't like? I think this is the wrong question to ask of the government. At least notionally, when I borrow as a private individual it's to provide some quantifiable benefit in the future. For example if I'm starting a business, I might draft a business plan, conclude that there is money to be made and an opportunity that will dissolve if I try to save, and borrow money to buy equipment to start the business. What we should be asking is "what tangible benefit for our society is this thing going to have, and do we want to be on the hook to pay for it for 30 years?" I think to the degree that broadband access gives people in rural areas direct access to a market and to knowledge and ideas that they can't access locally, there is a lot of value in the rest of the country paying for this so that they can have the same options that the rest of us have.

_heimdall 3y ago
> what tangible benefit for our society is this thing going to have, and do we want to be on the hook to pay for it for 30 years? That's really key to the question though. The federal government doesn't have to risk any collateral and they aren't held to any repayment schedule. Arguably, once the the debt is created they are actually incentivized to not pay back the debt. The new debt creates new money in the system, removing it later would decrease the money supply and at any meaningful scale would risk deflation. When governments can create their own money on demand and have no tangible downsides to doing so unless they somehow trigger massive inflation, when does a budget really create much of a barrier to them? When would a government turn down or cancel a program, assuming the money spent isn't going to trigger inflation?
- _3u10 3y ago
  I don't know when, but I can tell you where, Argentina. It's been operating under the premise that their borrowing won't create inflation for the last 100 years. The recently departed government still claims that their borrowing wasn't the cause of the problem.
  - _heimdall 3y ago
    Well that is the beauty of economics. The system is so complex that you can claim causation wherever you want and find some data to point to. I honestly don't get how economics is considered a science or predictive. At the highest level its still largely driven by trying to play psychological games to "nudge" consumers and investors in a certain direction. There's no prediction there, and a science that couldn't, for example, predict that printing $4T would cause inflation isn't really very scientifically accurate with its predictions.
    - _3u10 3y ago
      It used to be call political economy or at least that's what I've been told. It's more like human psychology to be honest.

_heimdall 3y ago

> what tangible benefit for our society is this thing going to have, and do we want to be on the hook to pay for it for 30 years? That's really key to the question though. The federal government doesn't have to risk any collateral and they aren't held to any repayment schedule. Arguably, once the the debt is created they are actually incentivized to not pay back the debt. The new debt creates new money in the system, removing it later would decrease the money supply and at any meaningful scale would risk deflation. When governments can create their own money on demand and have no tangible downsides to doing so unless they somehow trigger massive inflation, when does a budget really create much of a barrier to them? When would a government turn down or cancel a program, assuming the money spent isn't going to trigger inflation?

_3u10 3y ago
I don't know when, but I can tell you where, Argentina. It's been operating under the premise that their borrowing won't create inflation for the last 100 years. The recently departed government still claims that their borrowing wasn't the cause of the problem.
- _heimdall 3y ago
  Well that is the beauty of economics. The system is so complex that you can claim causation wherever you want and find some data to point to. I honestly don't get how economics is considered a science or predictive. At the highest level its still largely driven by trying to play psychological games to "nudge" consumers and investors in a certain direction. There's no prediction there, and a science that couldn't, for example, predict that printing $4T would cause inflation isn't really very scientifically accurate with its predictions.
  - _3u10 3y ago
    It used to be call political economy or at least that's what I've been told. It's more like human psychology to be honest.