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That the US will continue to sell debt securities at some level in the future is incontrovertible. That is not what I was responding to, which was that idea tha
by TeaBrain 2y ago
That the US will continue to sell debt securities at some level in the future is incontrovertible. That is not what I was responding to, which was that idea that "historically what usually happens to government debt is that it isn't really paid back but sits there and is reduced in value over time by inflation".
This is referring to current debt, not the idea of ending the debt cycle. The US doesn't have the option of letting current debt just sit for an arbitrary amount of time and get reduced by inflation, but has to pay according to the obligations of the outstanding debt securities. It also doesn't buy back the debt securities before they are due. The real value will be reduced due to inflation until the point where obligations are due, but there isn't a choice to arbitrarily let it sit.
- zamadatix 2y agoThe strong interpretation of GP was not having "the debt" refer to "the batch of securities providing the current proceeds of the debt" but instead "the outstanding balance owed". Conflating refinancing the debt balance with repayment of the debt only adds confusion to the conversation.
- deleted 2y ago[deleted]
- TeaBrain 2y agoYou seem to be under some misled notion that there is a conception of an outstanding sovereign debt balance separate from the securities. The aggregate outstanding balance is wholly constructed of debt securities. This is literally what the debt balance is referring to. The debt securities do not just exist to pay interest on the debt, but represent the debt themselves. The so-called outstanding balance is an aggregation of the principal of all of the levels of separately maturing securities.