How will the US pay back its debt? - Page 4 - Politics Forum.org | PoFo

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Everything from personal credit card debt to government borrowing debt.

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#14922358
Crantag wrote:Good and well. I don't come here to argue I come here to try and learn. I think you just like to argue.

Americans aren't anything special. I just don't want others around the world to suffer for Americans to continue enjoying exhorbitant privilege.

But mostly I am just a realist. What I or anyone else may or may not want is actually quite irrelevant.

Actually I come here more to teach at least for MMT.
#14922460
Americans aren't anything special. I just don't want others around the world to suffer for Americans to continue enjoying exhorbitant privilege.


What is it that you want? What do you want the American people to do? Do you want them to not act in what they see as their self-interest? That is sort of what countries are all about.
#14922649
Drlee wrote:What is it that you want? What do you want the American people to do? Do you want them to not act in what they see as their self-interest? That is sort of what countries are all about.

Was it really in the US self-interest to invade Iraq?

The US is now a lunatic state, with a broken system of government. The system, through the coincidence of mass populism on appeal to reaction and outright and transparent corruption, resulted in the presidencies of George W. Bush, and now Trump.

The US is stuck in an a range of institutional pathways which include the rise of faux democracy and persistent militarism, as well as systemic collusion between the government and the most powerful moneyed interests, has corrupted everything.

Has deindustrialization worked in American's self-interest (as opposed to the moneyed class which pushed the process)?

I don't even buy the premise. Americans aren't even so much as empowered to act in their self-interest, if they could even so much as figure out what that self interest is--which they can't.

But there's something else here. Remember that rightwing meme: 'America; love it or leave it.' I for one packed my bags and left it, and I have seldom looked back. So you'll have to excuse my lack of sadness at the ongoing rot of the US.
#15015753
rik wrote:This is pretty much what is going to bankrupt America.
The debt has to be service, no matter what. That means Americans are eventually going to be working to serve the interests of other nations, such as China, Japan, and the UK.

There is one possibility of paying off the debt...

Start drilling for oil like Norway and Canada are doing, and cut government spending simultaneously.

It is not my intent to pick on rik, here. He wrote that 8 years ago.

I'm no expert on economics or economic history.
As far as I know, the US is the only nation ever to pay off a large national debt with tax dollars.
There may have been some that won a war and looted the loosers.

Based on just my 70+ years of learning (and 10 min. of googling), the history goes like this ---
1] During the Revolutionary War the US Gov. and the states ran up a large debt.
2] We won. Under the Articles of Confederation the US Gov. had no taxing power, so it could not even try to pay-off the debt.
3] After the Constitution went into effect Alexander Hamilton convinced Pres. Washington to take over the state debts and then tax enough to pay-off the whole debt.
4] At this time the US was the owner of all the land east of the Mississippi River and west of the 13 states. All it had to do was move the Native Americans off *their* land, and then the Gov. could sell it to pioneers.
5] The Gov. did this in the early 1800s. But, it sold the land to rich speculators who then resold it to the pioneers. This was very profitable. This ended with the Homestead Act that went into effect late in the Civil War or after it.
6] Hamilton had also convinced Washington to have a protective tariff. This tariff brought in a lot of money. This was added to the money from land sales and whiskey taxes.
7] Therefore, the US often ran a surplus that was used to pay-down the debt.
8] In the mid 1830s the debt was all paid off, during Andrew Jackson's presidency.
9] However, in 1837 the worst depression (bank panic) of the 19th cent. started and it lasted for 8 years or so. Some economic historians even say this depression was worse than the Great Depression. Remember I'm no expert.

MMTers will tell you that this is not a coincidence. That the panic was *caused* by the surplus.
MMTers say that a surplus, by accounting identity, must shove the non-Gov. sector of the economy into deficit. So, the people to keep the GDP flat must borrow from banks. At some point the people can't keep borrowing because their income is flat because the economy is flat. When this happens [i.e., that the people have to borrow less than they did last year] the GDP falls. When this happens comp. lay people off and farmers get less for their crops. When this happens the GDP falls more. [We can see this process in Europe since 2010.] This is repeated year after year as the GDP spirals down and down. Often it ends when the nation starts a war and the wartime deficit spending reawakens the economy and the GDP goes up. {Note here that, the Mexican War can be said to have ended the depression of 1837.}

So, my point is --- even the richest nation the world had ever known to that time [because of the value of the western lands] could not pay-off its large debt with tax dollars [i.e., including $$ taken in exchange for land] without causing a depression. How much harder will it be for the US now when it has no valuable land left to sell?

The US national debt can never and will never be paid-off with tax dollars. It can only be paid-off with newly created "money tree dollars". And this may not be a good idea either.
. . . OTOH, the US can never go bankrupt because it has access to the magic money tree.
. . . But it is important that that tree must not be harvested too much, if it is there will be hyperinflation and this is bad, but even this can be solved as Germany did after its hyperinflation. It did this even before the rise of Hitler.
#15016012
Based on just my 70+ years of learning (and 10 min. of googling), the history goes like this ---


Rare post on POFO.

Hey Diogenes, he's over here!
#15051896
Andropov wrote:It is mathematically impossible at this point, as this article suggests?: http://theeconomiccollapseblog.com/arch ... ional-debt

What happens if the country just keeps borrowing and borrowing and raising the debt ceiling higher and higher?

Not to worry.
https://www.thestreet.com/story/1353443 ... -debt.html
#15051907
Crantag wrote:Like talking to a brick wall.

The US doesn't 'act like an empire.'

The US is an empire.

I'm not looking for ways to make America better. America is a lost cause.

I'll tell you where we disagree, or as it seems to me.

You believe in the lie of 'American exceptionalism'. You also expect others to do so.

I don't.

And I never suggested the US slash the war budget. I never suggested this because I live in the real world and I know that is not going to happen.

The US is slowly crumbling. Too slowly, though, for my liking.


Another post I wish I could like 100 times but I can only do so once!

Yes, Crantag, you are a very thinking man. I try to come here too to learn something. Debating is fun if the opponent is also willing to think hard and bring forth a thoughtful rebuttal. If you have a bunch of people without any interest but in insults and being aggressive when they are found out to be liars? It is not worth anyone's time.

You I always learn from a lot.

The problem is I can't debate you much because I agree with you most of the time.

Ha, ha.
#15051928
Andropov wrote:It is mathematically impossible at this point, as this article suggests?: http://theeconomiccollapseblog.com/arch ... ional-debt

What happens if the country just keeps borrowing and borrowing and raising the debt ceiling higher and higher?



Great nations, empires, and civilizations often end. The main cause is loss of social cohesion fragmentation, division, balkanization, loss of values, etc. It happened in Greece and Rome

1. People on the left that want to spend even more money. They want everything free for everybody and that will be paid by the rich people.
2. People that depend on government programs will never agree to spend less.
3. Non-conservatives like Trump do not care, he used to be a democrat.
4. Social and moral decay which leads to citizens that want the USA to fail. They are the bitter people filled with envy.

The loss of cohesion is a big one. There is no national pride among 50% of the population. These folks think the American flag is as racist as the Confederate flag.

JFK said:
Image

Not true anymore. The left wants the country to do anything for them and that is very costly.


It does not look good.
#15052205
Julian658 wrote:
People on the left that want to spend even more money.



Reagan did a massive increase in military spending. But the kicker is that while spending increased dramatically, he reduced taxes. That turned us from being the world's largest creditor, to the world's largest debtor.

The 2 Bushes did war, and tax cuts. Which also made for a massive increase in the debt.

Clinton did neither. He actually did a tax increase, and the economy got better. Confidence, anyone?

This is a perennial. Republicans throw trillions away on stupid wars and tax cuts.

But if Dems want to spend a dime, it's time for wailing and moaning and gnashing of teeth.

In the unlikely event you do look, you will see Obama. But he didn't create that mess, he was just trying to dig us out of it. If you want to slide further out that branch, given the dominance of the financial sector in politics, changing party would have made no difference.

Guys from the finance sector would have run the show (as they were doing when Bush 2 was president) and their top priority is always covering their tukus.
#15052568
Steve_American wrote:8] In the mid 1830s the debt was all paid off, during Andrew Jackson's presidency.
9] However, in 1837 the worst depression (bank panic) of the 19th cent. started and it lasted for 8 years or so. Some economic historians even say this depression was worse than the Great Depression. Remember I'm no expert.

MMTers will tell you that this is not a coincidence. That the panic was *caused* by the surplus.
MMTers say that a surplus, by accounting identity, must shove the non-Gov. sector of the economy into deficit. So, the people to keep the GDP flat must borrow from banks. At some point the people can't keep borrowing because their income is flat because the economy is flat. When this happens [i.e., that the people have to borrow less than they did last year] the GDP falls. When this happens comp. lay people off and farmers get less for their crops. When this happens the GDP falls more. [We can see this process in Europe since 2010.] This is repeated year after year as the GDP spirals down and down. Often it ends when the nation starts a war and the wartime deficit spending reawakens the economy and the GDP goes up.

Right. Under the current debt-money system, when households and firms don't want to undertake more debt, government has to do it to stave off deflationary collapse. This is an inherent fault in the debt-money system that is caused by its inescapable positive feedback mechanism.
So, my point is --- even the richest nation the world had ever known to that time [because of the value of the western lands] could not pay-off its large debt with tax dollars [i.e., including $$ taken in exchange for land] without causing a depression. How much harder will it be for the US now when it has no valuable land left to sell?

It could be done easily by just rescinding private banksters' privilege of creating debt money de novo in order to charge interest on it, and gradually replacing the existing stock of debt money (equal to the total value of outstanding bank loans) with debt- and interest-free fiat money issued by an independent Mint whose sole mandate is price stability. Paying off the national debt with tax money is as inadvisable as making a souffle using chicken instead of eggs.
The US national debt can never and will never be paid-off with tax dollars. It can only be paid-off with newly created "money tree dollars". And this may not be a good idea either.

It's an incomparably better idea than trying to maintain the current debt-money system, thus enabling and subsidizing bankster parasitism.
#15092770
Sorry it took so long to see this. It seems I don't get a heads up any more.

Truth To Power wrote:Right. Under the current debt-money system, when households and firms don't want to undertake more debt, government has to do it to stave off deflationary collapse. This is an inherent fault in the debt-money system that is caused by its inescapable positive feedback mechanism.

My reply. I agree. The "business cycle" was an inescapable consequence of the banking system of the 19th cent. and then the Fed. Res. system.

It could be done easily by just rescinding private banksters' privilege of creating debt money de novo in order to charge interest on it, and gradually replacing the existing stock of debt money (equal to the total value of outstanding bank loans) with debt- and interest-free fiat money issued by an independent Mint whose sole mandate is price stability. Paying off the national debt with tax money is as inadvisable as making a souffle using chicken instead of eggs.

Well, the banksters will fight that to the death.

I disagree with your idea of just price stability.
MMTers want to also have a Job Guarantee Program as THE anchor of prices. It would be locally run but financed with money-tree dollars.


It's an incomparably better idea [i.e., creating money-tree dollars as bonds come due and paying them off with new dollars] than trying to maintain the current debt-money system, thus enabling and subsidizing bankster parasitism.

Like I said, I'm not sure its a good idea.
I sort of like it that insurance comp. can buy US bonds and earn interest.
Also pension plans.
I do agree that the super rich should not have access to the interest paid on US Gov. bonds. Let them make risky investments.

Also, IMHO, remember I'm no expert, bonds do act as a safe place for deficit spending dollars to be parked as savings to keep them from being used to bid up the prices of everything. The main alternative is parking them in banks where (you know) the banksters will abuse having those dollars in their bank.


I still amazes me that so many here and in the US buy the claim that the US debt *must* be paid off someday. They have *no idea* how to do it, when I ask them how they would do it, but they still think it is *necessary*. IMO, $21 trillion is so big it's impossible to even imagine it can be sucked out of the economy and not destroy the economy.

.
#15092772
late wrote:Reagan did a massive increase in military spending. But the kicker is that while spending increased dramatically, he reduced taxes. That turned us from being the world's largest creditor, to the world's largest debtor.

The 2 Bushes did war, and tax cuts. Which also made for a massive increase in the debt.

Clinton did neither. He actually did a tax increase, and the economy got better. Confidence, anyone?

This is a perennial. Republicans throw trillions away on stupid wars and tax cuts.

But if Dems want to spend a dime, it's time for wailing and moaning and gnashing of teeth.

In the unlikely event you do look, you will see Obama. But he didn't create that mess, he was just trying to dig us out of it. If you want to slide further out that branch, given the dominance of the financial sector in politics, changing party would have made no difference.

Guys from the finance sector would have run the show (as they were doing when Bush 2 was president) and their top priority is always covering their tukus.


I loved Clinton. He was a greater misogynist that Trump or Biden, but I loved him.
I agree with you. The Rep Presidents have become spenders. Trump is the worse. And now both parties are competing with each other to throw money at people and buy votes.
#15092998
Julian658 wrote:I loved Clinton. He was a greater misogynist that Trump or Biden, but I loved him.
I agree with you. The Rep Presidents have become spenders. Trump is the worse. And now both parties are competing with each other to throw money at people and buy votes.

I hope you don't mind me asking for some clarification.
You said, "now". Does this refer to
1] The last few years.
2] Or to the current covid-19 crisis.

Of course, obviously, both parties support keeping the voters from starving in the crisis. You do remember the shocking percentage of American adults who did not have $400 to use to cover a $400 sudden car repair (etc.) expense. And, now a big chunk of them have lost their jobs. I am, literally, talking about a few (to several or many) million American citizens (and others in other nations who should be helped by their own gov.).

Please comment on my contention that the US national debt can *never* be paid *off* with money from tax revenues. If I'm right then, so what if the Gov. deficit spends to keep the people alive? It could even just spend and not issue bonds (after a law was changed).
#15093011
Steve_American wrote:I hope you don't mind me asking for some clarification.
You said, "now". Does this refer to
1] The last few years.
2] Or to the current covid-19 crisis.


The Clinton comment is tongue in cheek. The market did well during the Clinton era. Furthermore, the dude was a master politician and somewhat moderate. But, he was likely worse than Trump with women. With Trump what you see is what you get. Clinton hid it well. Biden is an anomaly who has always been a gaffe machine even when he was young.

Of course, obviously, both parties support keeping the voters from starving in the crisis. You do remember the shocking percentage of American adults who did not have $400 to use to cover a $400 sudden car repair (etc.) expense. And, now a big chunk of them have lost their jobs. I am, literally, talking about a few (to several or many) million American citizens (and others in other nations who should be helped by their own gov.).

Please comment on my contention that the US national debt can *never* be paid *off* with money from tax revenues. If I'm right then, so what if the Gov. deficit spends to keep the people alive? It could even just spend and not issue bonds (after a law was changed).


I don't think the debt gets paid. I am with you, but it would be best if we had money in the bank.

I am curious about how the Republicans want to go back to work and the Democrats want to stay home. As long as they do not print money it is OK.Different people!
#15093015
How will the US pay back it's debt? WEELLL! By COMPLETELY doing away with ALL Social Security and Medicare FOR EVERYBODY! That means using that money that was supposed to be for Social Security and Medicare to pay on the national debt. OR declaring BANKRUPTCY. OR BOTH! The US government really ONLY represents RICH WHITE PEOPLE. And they DON'T GIVE A SHIT ABOUT ANYBODY EXCEPT ONLY THEMSELVES AND TO HELL WITH EVERYBODY ELSE.

All they have to do is pass subtle laws that prevent the poor and people of color from voting but allow racist whites to vote given they are easily conned and manipulated by those RICH WHITE PEOPLE. Moreover, because the US government ONLY represents RICH WHITE PEOPLE, taxes will NOT BE RAISED to pay the debt (OR IT MIGHT BE, BUT ON POOR PEOPLE WHO CAN'T VOTE and are least able to pay, it's the American way, it's the way we do business here). RICH WHITE PEOPLE SIMPLY DON'T WANT TO PAY FOR ANYTHING IN GOVERNMENT. They want EVERYBODY ELSE TO MAKE PAYMENTS and DON'T CARE about defaulting on the national debt.

So that leaves taking away social security and medicare from EVERYBODY to pay for it OR DEFAULTING ON THE DEBT and DECLARING BANKRUPTCY OR RAISING TAXES ON POOR PEOPLE WHO CAN'T VOTE. Maybe all those options! That's the plan the US government has from what I see. And when that happens, the rich will flee the US while everybody else is left in the shitter. They would have finished robbing and taking from the country without giving anything truly meaningful back. They don't give shit about anything larger than themselves. They only care about their money, their wallet and ONLY themselves. That's just the way it is in America. This whole fiasco of Trump getting elected and that Trump has never been held accountable is PROOF OF THAT.
#15093058
Politics_Observer wrote:How will the US pay back it's debt? WEELLL! By COMPLETELY doing away with ALL Social Security and Medicare FOR EVERYBODY! That means using that money that was supposed to be for Social Security and Medicare to pay on the national debt. OR declaring BANKRUPTCY. OR BOTH! The US government really ONLY represents RICH WHITE PEOPLE. And they DON'T GIVE A SHIT ABOUT ANYBODY EXCEPT ONLY THEMSELVES AND TO HELL WITH EVERYBODY ELSE.

All they have to do is pass subtle laws that prevent the poor and people of color from voting but allow racist whites to vote given they are easily conned and manipulated by those RICH WHITE PEOPLE. Moreover, because the US government ONLY represents RICH WHITE PEOPLE, taxes will NOT BE RAISED to pay the debt (OR IT MIGHT BE, BUT ON POOR PEOPLE WHO CAN'T VOTE and are least able to pay, it's the American way, it's the way we do business here). RICH WHITE PEOPLE SIMPLY DON'T WANT TO PAY FOR ANYTHING IN GOVERNMENT. They want EVERYBODY ELSE TO MAKE PAYMENTS and DON'T CARE about defaulting on the national debt.

So that leaves taking away social security and medicare from EVERYBODY to pay for it OR DEFAULTING ON THE DEBT and DECLARING BANKRUPTCY OR RAISING TAXES ON POOR PEOPLE WHO CAN'T VOTE. Maybe all those options! That's the plan the US government has from what I see. And when that happens, the rich will flee the US while everybody else is left in the shitter. They would have finished robbing and taking from the country without giving anything truly meaningful back. They don't give shit about anything larger than themselves. They only care about their money, their wallet and ONLY themselves. That's just the way it is in America. This whole fiasco of Trump getting elected and that Trump has never been held accountable is PROOF OF THAT.

OK, Politics_Observer,
I'm sorry but I don't remember your previous posts.
I will, therefore, accept that you mean exactly what you wrote in the above reply.

1] I agree that the US Gov. is controlled by rich or better super rich white men.
And, they only care about themselves and their children (and *maybe* their wife).
. . . So, I agree that the American people need to take control of *their* Gov. back from the rich. [Ask me how we can do this, at least what needs to be done.]

2] However, you are totally wrong when you suggest that those super rich white men will allow the US Gov. to default on the US Gov. debt.
. . . The debt is mostly owed to those rich men. Making the US Gov. default on the debt would be shooting themselves in both their feet. It's owed to them directly, or indirectly by being owed to comp. and banks that the rich own.
. . . Therefore, it is far better for the super rich for the debt to be rolled over with new bonds being sold or even having the debt paid with newly created (not printed, but like printed) dollars. [Nowadays, the Gov. credits the bank accounts of those it wants to pay; it doesn't need to print paper dollar bills.]

3] Your idea to stop paying Soc. Sec. and Medicare {and a lot of other Gov. spending} to create a surplus of tax revenues over total spending, is not going to work the way you think it will.
. . . You don't understand how the economy works. GDP (simplified for clarity) is the total income of all people and comp. in the US. If the Gov. stops making S.S. payments (etc.) this will seem to create the surplus you want, BUT it will also cut tax revenues. It will reduce tax revenues because the S.S. recipients (etc.) will not be spending the $$ they didn't get. This will cut the incomes of many comp. and small businesses like restaurant owners. The reduced incomes of the restaurant owners means they will pay less income taxes. Europe saw this happen with the austerity that was imposed after the GFC/2008. Gov. deficits dropped less than expected and in some nations the deficits actually increased. IIRC. But, it did create a lot of suffering by the people, especially young people.

4] What good will it do your rich people to flee the country? They are rich because they own 3 kinds of things. a] Cash = mostly US $$ or US bonds [but also some euros and euro bonds], b] comp. stock shares in mostly US corps. [but also some non-US corps.], and c] land and buildings in the US [and some in other nations]. IMHO, after the rich flee the nation the US Gov. would very likely just tax the sh*t out of their assets in the US and functionally confiscate them or just use eminent domain to do the same.
. . . If the US defaulted on *all* of the US bonds and T-bills, etc.; This action would send the whole world into a Great Depression which would make all money lose its value. No matter where your rich fled to, their wealth would not be able to buy them as much as it does now. They know all this, so they will keep the can being kicked down the road as long as they can.
. . . IMHO, this is forever. Well, until the climate crisis kills 90% of the world's people. Or, the world runs out of natural resources. One or both of which will likely happen within the next 100 years. That is, unless very drastic changes are made.

.
#15093060
Julian658 wrote:... snip... Steve's reply
The Clinton comment is tongue in cheek. The market did well during the Clinton era. Furthermore, the dude was a master politician and somewhat moderate. But, he was likely worse than Trump with women. With Trump what you see is what you get. Clinton hid it well. Biden is an anomaly who has always been a gaffe machine even when he was young.
... snip ,,, the rest of Steve's reply
I don't think the debt gets paid. I am with you, but it would be best if we had money in the bank.

I am curious about how the Republicans want to go back to work and the Democrats want to stay home. As long as they do not print money it is OK.Different people!

Julian658,
How can the US Gov. put or keep money in the bank?

It tried to do this n 1983 with the larger FICA tax that got put into the Soc. Sec. Trust Fund.
. . . I think that it didn't work. The Gov. still had a deficit in most years. Even when it had a surplus, the surplus just caused the dot-com bubble recession. And the larger FICA tax bonds just let the Repuds avoid taxing the rich more, because of the already existing tax on all the workers.
. . . The reason the US Gov. can't put away money for a rainy day {which a state like Calif. can and should do] is that the US issues all the dollars in the world. It can create dollars when it needs them. And because, taxing dollars destroys those dollars at least functionally. Spending creates dollars, again functionally. Destroying $$ without replacing them in the economy with spent $$ will always reduce the nation's total income and therefore its GDP.
. . . Let me say that again. If the US has a surplus this must reduce the GDP. What is to be gained by having a surplus that always reduces the GDP, if the Gov. has an infinite supply of new $$ it can spend when it needs to spend them.

The current situation with the covid-19 crisis illustrates this fact in a bright, clear way. The fact being, "The Gov. has an infinite supply of new $$ it can spend when it needs to spend them."
. . . The only question is what happens after the spending has been made. As someone else pointed out, in the current crisis the dollars are being created to replace incomes that are lost because of the disease, and so will not cause any inflation or make the gov. insolvent.
. . . My economic theory is MMT. My Prof. MMTers claim that the *only* risk of too much spending is *inflation*. That there is no other risk. And that inflation can be dealt with easily when it starts.
. . . I lived through the 1970s inflation and I can tell you it was not so bad. Now hyperinflation is different but *every single* instance of hyperinflation was caused by a big shortage of some important thing, like food. And, too much deficit spending has never *caused* a food shortage.
.
#15093064
Governments never pay back their debts. They just borrow new money to service their old debts. As long as the markets are confident that a government has the resources to keep on servicing it's debts, there is no problem. If the debt increases too much, lenders may ask for higher interests, which makes it harder to service the debt.

Trump's previous tax cuts together with the current spending spree to offset the pandemic-induced recession will substantially increase debts and I don't envy the next president who will have very little room for maneuver to fix the economy.

Any future president will have to fix relations with China because the Chinese are one of the most important buyers of government bonds. Most dollars are held by people outside the US. If the dollar were ever lose it's position as international reserve currency, for example due to a shift away from fossil fuels, they would start offloading dollars, which would lead to a devaluation.

All of this doesn't bode well for the future of the US economy. By the time the US reemerges from the recession/depression, China may have replaced the US as the most important economy. If it comes to the worst, the major economic powers may have to join to keep the US from going belly up, which would send shock waves across the globe.
#15093070
Steve_American wrote:Julian658,
How can the US Gov. put or keep money in the bank?

It tried to do this n 1983 with the larger FICA tax that got put into the Soc. Sec. Trust Fund.
. . . I think that it didn't work. The Gov. still had a deficit in most years. Even when it had a surplus, the surplus just caused the dot-com bubble recession. And the larger FICA tax bonds just let the Repuds avoid taxing the rich more, because of the already existing tax on all the workers.
. . . The reason the US Gov. can't put away money for a rainy day {which a state like Calif. can and should do] is that the US issues all the dollars in the world. It can create dollars when it needs them. And because, taxing dollars destroys those dollars at least functionally. Spending creates dollars, again functionally. Destroying $$ without replacing them in the economy with spent $$ will always reduce the nation's total income and therefore its GDP.
. . . Let me say that again. If the US has a surplus this must reduce the GDP. What is to be gained by having a surplus that always reduces the GDP, if the Gov. has an infinite supply of new $$ it can spend when it needs to spend them.

The current situation with the covid-19 crisis illustrates this fact in a bright, clear way. The fact being, "The Gov. has an infinite supply of new $$ it can spend when it needs to spend them."
. . . The only question is what happens after the spending has been made. As someone else pointed out, in the current crisis the dollars are being created to replace incomes that are lost because of the disease, and so will not cause any inflation or make the gov. insolvent.
. . . My economic theory is MMT. My Prof. MMTers claim that the *only* risk of too much spending is *inflation*. That there is no other risk. And that inflation can be dealt with easily when it starts.
. . . I lived through the 1970s inflation and I can tell you it was not so bad. Now hyperinflation is different but *every single* instance of hyperinflation was caused by a big shortage of some important thing, like food. And, too much deficit spending has never *caused* a food shortage.
.


You are saying the spending stimulates the economy. I say we need massive infrastructure repair and upgrade. Why should other nations have better trains than we do?

The Venezuelans printed extra money and the hyperinflation was quite wild. HOwever, they had nationalized businesses and farms and had shortages


As for Covid-19. Yeah, it is horrible and we should do whatever it takes to prevent saturation of hospitals. Beyond that point life should go on with masks on.

Other crisis will come. I suspect at the end of the 21st century the West will be asking couples to have children as people will be too old and increative.

The debt will always be there.

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