[Steve_American]

In my long life I have learned many facts. It came to me a few nights ago that historians have missed something about the causes of the American Revolution.
I was taught that a or the major cause of it was new taxes that were imposed on the American Colonies to pay for the recent Seven Years War. This is incomplete. Historians don't know economics. They don't know that every time the US has run a surplus for a few years, this has caused a recession. That is, in all 7 cases in US history a surplus has led to a Bank Panic , recession, or depression. The last case was in 2000 with the dot com recession after Clinton's surpluses. This one ended when Bush II slashed taxes to end the surplus. An early case was when the US paid off its national debt in about 1830 or so, this led to the Bank Panic of about 1835 or so. This one lasted until the US started a war with Mexico. The Panic of 1858 ended with the Civil War. Etc.

So, England wanted to have a surplus so it increased taxes on the Colonies in the form of the Stamp Act and import duties. At least the Stamp Act taxes had to be paid with gold. The Colonists complained that the gold supply was being drained.

Because the goal was to pay down the debt, the English Gov. had to run a surplus. However, nobody then knew that the act of running a surplus long enough will always cause a recession.

There is a 2nd element of my theory. Straus and Howe have a theory about History. It has "Generations" and it has "Turnings". When there is a 4th Turning there are massive changes. In American History the main 4th Turnings are the American Revolution, the Civil War, and the Great Depression and WWII.

So, the combination of the Stamp Act Recession and the soon to be 4th Turning together caused the American Revolution.
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[Puffer Fish]

However, nobody then knew that the act of running a surplus long enough will always cause a recession.

There is some truth to this, but even if it causes a recession it is still overall part of a healthy economy, when looking at the longer term scale of time.

It is kind of like saying paying off your credit card debt will cause severe financial strain and be very difficult to deal with. It could cause a person to go temporarily homeless in some situations.
But nevertheless, it is the responsible thing to do, and it the best thing to do when looking at the long term.

If you don't want to suffer the effects of paying back the debt, then do not get into debt in the first place. That is one strong thing that should be considered before getting into debt.
I've noticed that many on the Left (and those who hold to the MMT economics theory) have trouble understanding this, even though to conservatives and most average people it's basic common sense.

Recessions are to blame on economic bubbles that build up. The correct solution is to slowly deflate the bubble, not to try to prop it up.


I have tried to warn people about massive build up of government debt. When it comes time later to start paying that debt back, what do you think it's going to do to the economy?

But people like Steve_American think it never has to be paid back.

[Steve_American]

There is some truth to this, but even if it causes a recession it is still overall part of a healthy economy, when looking at the longer term scale of time.

1] It is kind of like saying paying off your credit card debt will cause severe financial strainand be very difficult to deal with. It could cause a person to go temporarily homeless in some situations.
But nevertheless, it is the responsible thing to do, and 2] it the best thing to do when looking at the long term.

3] If you don't want to suffer the effects of paying back the debt, then do not get into debt in the first place. That is one strong thing that should be considered before getting into debt.
I've noticed that many on the Left (and those who hold to the MMT economics theory) have trouble understanding this, even though to conservatives and most average people it's basic common sense.

Recessions are to blame on economic bubbles that build up. The correct solution is to slowly deflate the bubble, not to try to prop it up.


I have tried to warn people about massive build up of government debt. When it comes time later to start paying that debt back, what do you think it's going to do to the economy?

4] But people like Steve_American think it never has to be paid back.

1] When nations were on the gold standard, looking at nations as if they were like a corp made more sense. Yet, England/the-UK has had a national debt for over 320 years and never had a debt crisis (my source for this claim is in a post here by late that quoted Krugman as saying this) and never needed to pay it off either. So, even on the gold standard nations don't seem much like corps. Comparing them to people is ridicules. People die and their estate pays their debts; but when nations "die" their asserts are typically looted, so their bonds are without any value.
. . . Now that many nations have the 3 characteristics of a fully fiat currency, such nations are in no way like a corp. I'll just assert this like you do. I have explained it a few times, though.

. . . I'll ask you again, PF, to list 3 nations that paid off their entire national debt by having a surplus (printing the cash or looting a 1000 tons of gold from Mexico don't count). If it is such a good thing to do "in the long run" as you assert, then you ought to have some examples.

2] To claim that nations do the best when they pay off their national debts is silly. You have not yet given us any example of a nation that did this. Not even one.
. . . OK, I know of one. The US did it in about 1830. However, this caused a depression that lasted until the Mexican War of 1848, and the nation went back into debt even before that. This historical example doesn't look like a nation doing the best thing possible.

3] This is also just silly. In the industrial age, unlike before that, nations have constantly increasing populations and GDPs. They need a constantly growing money supply. The US tried letting banks print money, this worked unto the next bank panic, when this money became without value, so this didn't work. So, the it reied the Federal Reserve Bank system, this also led to the same boom and bust situation, but did have fewer busts, so still not good. Now, MMters like me want to have to Gov. create the new or additional needed money (without also creating the debt that the Fed system creates), or have the debt be owed by the US that can always pay its bills, this might work better. It isn't something for nothing.

4] PF, you just tried to pull a fast one.

There is a huge difference between paying a debt back and paying your debts off.

You do know that the US has never not paid a bond off when it came due, right? So, you do know that the US has paid all its debts back on time.

OTOH, paying your debts off is totally different. To do this properly, the nation must have a surplus year after year for a long time. The historical lesson of doing this is that it always in every single case has caused a recession that ended the surplus. And PF, you have never even tried to refute this assertion. You have never pointed to an example of the nation that ran a surplus to pay off its debt and it didn't cause a recession.

No MMTer asserts that the US doesn't need to pay the bondholders back when the bond comes due. They just assert that it is impossible to pay off the national debt without creating $31T of new dollars, electronic dollars. This would be a lot like printing money and likely would lead to inflation. But, there is no example in history of a nation doing this, AFAIK. So, we don't really know for sure what would happen.
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[Steve_American]

@Puffer Fish,

I want to direct this to PF.

You have said that you understand the "paradox of thrift". It asserts that if everyone starts saving some (more than tiny) part of their income, that this is very bad for the economy. That it will cause a recession. So, what is good for each individual is bad for all individuals as a group.
In other words, each individual must have a "surplus" to be able to save. Income minus spending (+ taxes, etc.) = surplus that can be saved.

PF, can you see that the Gov. acts in the economy as if it is everyone. All by itself it can do what it takes "everyone" to do.

Therefore, your assertion that it is best for a Gov. to pay off its debt runs into the paradox of thrift problem. Like I have asserted. In order to pay down (or pay off) its debt, it must run a surplus (= revenue minus spending), unless it can take from some foreign nation, like Spain did when it looted the gold and silver of "Latin America" from 1522 to 1600.**

This is the reason that you can't list the nations that have paid off their debts. Only the US has ever been able to do this. [This fact should convince you that this is not a good plan and the opposite of "the best plan".

Further, you just assume that using gold as money is the best system. You don't seem to care about the clear problems that this system imposed on every nation that used gold. You seem to focus on the lack of inflation as great, and ignore the problems that came from using the gold standard.
The main problem was the need to protect the nation's supply of gold. They had to avoid a long-lasting trade deficit, or all the gold would be sucked out of the nation. The nations also had to avoid issuing too much paper money, because the citizens could use the paper bills to drain all the gold out of the nation's gold vault. This would (it was thought) make all the rest of the paper bills without any value. One solution was to sell bonds which could not be used to demand gold, but the total bonds still needed to be controlled.

Now, the world has been using fully fiat currencies for over 50 years, and so far, there has not been a disaster.

So, now nations don't have that reason (i.e., protecting the gold supply) to sell bonds. They can just spend electronic cash into the economy, as long as it is in moderation. Or, sell bonds direct to the central bank. Or, sell them indirectly to the central bank.

Yes, right after Nixon ended the gold standard there was a lot of inflation. This can be seen as growing pains as everyone got used to the lack of any backing for the money. It can also be seen as the response to OPEC raising the price of oil a lot, at least twice. When OPEC stopped raising the oil price, the inflation soon stopped. What the Fed did may not have been necessary, or good. It may have caused an increase in inflation in a vicious spiral up. This is what MMTers assert.

Now, PF, you still have not grasped my assertion that there is a limit on deficit spending. Assuming that the nation's economy is not dominated by large players with monopoly pricing power, inflation will start only when the Gov. spending is forcing the use of more real labor and resources than the nation can get its hands on. Until then, competition will cause corps to increase production to sell more to get more of the demand being created by the Gov's deficit spending.

Of course, IMHO, we need to forget the market because of ACC, aka GW. The market got us into this mess and it is not letting us deal with the mess. So, we need to go to a non-market system. I'm proposing a rationing system to only let everyone use just their fair share of what the natural world will let us use. By fair I mean to let the rich individuals use up to 4 times more than the poor individuals, but no more than that unless they can buy more ration "coupons" from someone who will not be using them.


Notes
. . ** . The US learned this lesson in some sense between 1840 and 1860. It stopped selling land to the rich who then sold it to the settlers with the Homestead Act passed during the Civil War. Instead, it charged a $10 filing fee to get 160 acres. This was just 0.0625 dollars per acre. So, instead of sucking dollars out of the economy to pay off the bonds, it almost gave the land away for free. And, all of those $10 payments were spent back into the economy by those administrating the sales. So, this cause of future Bank Panics was eliminated. Trying to pay off the debt again, now, would amount to unlearning that lesson that Lincoln had learned.
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[Steve_American]

@Puffer Fish.

Lurkers, note that it has been over 2.5 days since I posted this and he has not replied yet.

Just recently he complained about my being fed up with him for not replying to my points.

This is another example.

IMHO, this restatement of my argument should convince everyone that the US can never repay its national debt by running a surplus for years.

It can only reduce the debt by a significant amount by in some way creating the dollars to repay some of it.

This is why a Gov. that issues its own currency is not like a corp or household, and should never be compared to one of those.

[Steve_American]

@Puffer Fish.

Lurkers, in the last 24 hours there have been over 70 new views. It seems like this thread is being shared and sort of going viral.

In the last 5 days there have been over 780 new views.

PF, are you ever going to reply? You said that you wanted to discuss this. That was over 18 days ago.

You're making it look like you are conceding my points.

You said that the "best" policy is that a Gov. should pay off its debts. You know that the US for over 240 years has always paid every bond on time, right? I asked you for an example of a nation, other than the US, ever paying off its debt using money from a surplus of revenue. It seems like you can't do this. I explained why this is so. The ball is in your court.
. 1485 views

[Puffer Fish]

You said that the "best" policy is that a Gov. should pay off its debts. You know that the US for over 240 years has always paid every bond on time, right?

You know that's not what I mean. The US may pay back every individual debt, but it is only continuing to do that by taking out new individual debt to replace it, and pay the old debt back.
I was not referring to individual debts but to the overall debt in its totality.

I asked you for an example of a nation, other than the US, ever paying off its debt using money from a surplus of revenue.

You are trying to make this totally black and white, which it is not.

It should be obvious to anyone with any economics background. If the government can (through whichever means) grow its economy faster than the growth of its debt, then it is similar to reducing the debt. We could discuss this in terms of debt as a percentage of GDP (debt to GDP ratio).

I think any mathematician could see that with the way the debt to GDP ratio is headed, it is not sustainable. The ratio can't just continue to keep increasing on forever.

The US debt will reach 41 trillion by 2026. Do you know what 5% of 41 trillion is? The U.S. could find itself having to spend $2 trillion every year just to pay the interest on the debt. The entire government budget last year was $6.27 trillion. Please think about that.

The current national debt works out to $156,000 per working person in the country, which is more than twice as high as the median household income (and that's income before taxes).

When this all begins to come crashing down, people like you will just blame "capitalism".

[Puffer Fish]

IMHO, this restatement of my argument should convince everyone that the US can never repay its national debt by running a surplus for years.

It can only reduce the debt by a significant amount by in some way creating the dollars to repay some of it.

This is why a Gov. that issues its own currency is not like a corp or household, and should never be compared to one of those.

In other words you want to pay the debt through inflation. Economists have a term for this, it is called monetization of the debt.

And once people see that is going, what type of interest rates do you think lenders will demand?

The U.S. can't inflate their way out of all that debt all at once and still have to borrow money to pay for as the old debt comes due.

People are not going to lend the government at a 3% rate of return when there is 5% inflation, for example. (Some will but not so many)

If people like you don't want to honestly pay back the debt and want to try to pay it off through inflation, realise that you are stealing that money out of older people's retirement savings. A lot of old people rely on Treasury bonds in their retirement savings.

[Puffer Fish]

I want to direct this to PF.

You have said that you understand the "paradox of thrift". It asserts that if everyone starts saving some (more than tiny) part of their income, that this is very bad for the economy. That it will cause a recession. So, what is good for each individual is bad for all individuals as a group.
In other words, each individual must have a "surplus" to be able to save. Income minus spending (+ taxes, etc.) = surplus that can be saved.

I understand the theory of the paradox of thrift, but I do not agree with it.

If you want to start a separate thread (you can leave the link here) I will debate the issue there.

I don't believe it results in reduced spending because if everyone is holding on to money and spending less, in a free market, prices will go down, and the economic activity will eventually continue on as before.
(Well, that is the perspective of the Austrian school)

However, I do find the concept of the paradox of thrift interesting and notable since it is an example of the "fallacy of composition" (another more broad category of paradox) that plays prominently in economics.

[Puffer Fish]

Therefore, your assertion that it is best for a Gov. to pay off its debt runs into the paradox of thrift problem. Like I have asserted. In order to pay down (or pay off) its debt, it must run a surplus (= revenue minus spending),

I would not describe it as "the paradox of thrift", but yes I recognise there would be a problem.
It would be problematic to the economy to start aggressively paying down the debt too fast.

I think it's similar to any other kind of debt. If people try paying it off too fast, they are going to experience some serious financial pain and a squeeze in their household income.

But sometimes the debt gets so big and unmanageable that there are not really any good alternatives.

[Puffer Fish]

Now, PF, you still have not grasped my assertion that there is a limit on deficit spending. Assuming that the nation's economy is not dominated by large players with monopoly pricing power, inflation will start only when the Gov. spending is forcing the use of more real labor and resources than the nation can get its hands on. Until then, competition will cause corps to increase production to sell more to get more of the demand being created by the Gov's deficit spending.

I think you will need to expand on that, probably in another thread.

I don't think there's any realistic way we can have an in-depth discussion about that issue in this thread.

It's interesting what you have written, but that belongs in the Economics section.

[Steve_American]

1] I would not describe it as "the paradox of thrift", but yes I recognise there would be a problem.
2] It would be problematic to the economy to start aggressively paying down the debt too fast.

3] I think it's similar to any other kind of debt. If people try paying it off too fast, they are going to experience some serious financial pain and a squeeze in their household income.

4]But sometimes the debt gets so big and unmanageable that there are not really any good alternatives.

I'm glad to see you back. Thanks for replying. The 700 lurkers will learn something.

1] Paying down or off the national debt is very like the paradox of thrift because both remove money from the economy for the time being. That is, for at least some years.

2] Wrong, the economy is used to there being a deficit every year. Therefore, to have a surplus the Gov. must 1st reduce spending enough to eliminate the deficit or increase taxes on the people with disposable income, that is the very rich and super-rich. You don't seem to understand that the economy needs that deficit to avoid the non-gov. sector from going into deficit. The non-gov sector is the foreign sector (trade deficit/surplus and other dollar flows into/out-of the US econ.) plus the private sector (all people and comp. in the US).
. . The Gov. sector can be in deficit far easier than the non-gov. sector can. Put the non-gov sector in deficit and in a very few years there will be a Recession, because of a trade deficit or a desire of the top 20% to save, and especially the top 0.1%.
. . So, actually having a surplus just brings on the Recession faster. This is THE problem that nations had under the gold standard. You just can't understand this basic accounting truth.
. . It is necessary for the Gov. to have a deficit as long as there is a trade deficit and the top 20% want to save. I have explained this to you many times, you just can't understand it.

3] Never compare the US, UK, Canada, Aust., NZ, Japan, etc. to a corp, household, or any nation in the EU or EZ.

4] If the US debt is now unmanageable, then blame the Repud party. When Reagan was sworn n the debt was about $1T. Trump added $8T. Clinton has a surplus that caused the dot-com recession, and Obama had to deal with the GFC/2008 that Bush II is totally responsible for.
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[Steve_American]

1] I understand the theory of the paradox of thrift, but I do not agree with it.

2] If you want to start a separate thread (you can leave the link here) I will debate the issue there.

3]I don't believe it results in reduced spending because if everyone is holding on to money
and spending less, in a free market, prices will go down, and the economic activity will eventually continue on as before.
(Well, that is the perspective of the Austrian school)

4] However, I do find the concept of the paradox of thrift interesting and notable since it is an example of the "fallacy of composition" (another more broad category of paradox) that plays prominently in economics.

1] Why do you disagree with the paradox of thrift?

2] Debate it here.

3] The key words there are "in a free market". I assume that you mean the free market that Adam Smith was talking about. That is a market free of rentiers who extract wealth without creating a product or service. Like landowners and patent holders, comp. with monopoly pricing power, etc.
. . The US is not a free market in this sense. Therefore, the false assumption that it is will make your conclusion false or at least not apply to the economy we have now.
. . IIRC, in my entire lifetime prices in stores have never come down, except on cars. Houses are not sold in stores.

4] Why in the world can you say this? If the paradox of thrift is false, wrong, or incomplete then it can't be a good example of a fallacy of composition.
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[Steve_American]

1] In other words you want to pay the debt through inflation. Economists have a term for this, it is called monetization of the debt.

2] And once people see that is going, what type of interest rates do you think lenders will demand?

3] The U.S. can't inflate their way out of all that debt all at once and still have to borrow money to pay for as the old debt comes due.

4] People are not going to lend the government at a 3% rate of return when there is 5% inflation, for example. (Some will but not so many)

5] If people like you don't want to honestly pay back the debt and want to try to pay it off through inflation, realise that you are stealing that money out of older people's retirement savings. A lot of old people rely on Treasury bonds in their retirement savings.

1] Because the central bank in every country and the ECB in the EU has a target of 2% inflation, you must be out of step with most economists. You implied that you believe in the Austrian Scholl of econ. thought. No wonder you and I disagree. That school is AFAIK the most conservative and reactionary school of thought in all of economics. So, IMHO, it is the most wrong.

2] Here you are assuming that the lenders can demand an interest rate. MMTers assert that the central bank can always control the interest rate. They assert that the BoJ has proved this for 30 years. Every investor who bet against the BoJ lost his ass for 30 years. You're also assuming the supply of money theory is the cause of inflation. MMTers assert that this is not the cause of inflation. They assert that there is no main stream econ. theory that has an explanation of why the price level starts at a given level. They just explain why it increases from a starting level. MMT asserts that it has a theory of why the price level starts at a given level and why it increases.

3] I never asserted that the US can or should "inflate its way out of debt." I think it should tax the very rich and super-rich at a very high level. More than 90% on top bracket, and tax wealth also. And it should reduce the interest rate it pays on the new debt to below 0.5%.

4] Japan has proved that the Japanese Gov. can sell bonds one day and the BoJ can buy them the next day at a small fee. The interest rate IIRC is set by the BoJ at 0.1%/year. This didn't cause inflation. You asserted that this is not possible, and I showed you a nation where it has continued for 30 years.

5] People like me understand that the Repuds in the Neo-liberal era have added $32T to a debt of $1T and maybe made it a big problem. Making the debt 33 times bigger.
People like me believe that climate change will be so destructive that the debt will not be cared about as we fight to survive.
People like me understand economics better than you do. You still live in a world that is on the gold standard. Your entire theory assumes that money can't be created. Or, if it is, it will cause hyperinflation.
People like me read the report by the conservative think tank, The Cato Institute, that said that all 57 cases in human history that we have data on happened after 1900, and in every single case it was caused by a shortage of necessary things, like food or oil.
That is what people like me believe.
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[Steve_American]

1] You know that's not what I mean. The US may pay back every individual debt, but it is only continuing to do that by taking out new individual debt to replace it, and pay the old debt back.
I was not referring to individual debts but to the overall debt in its totality.


2] You are trying to make this totally black and white, which it is not.

3] It should be obvious to anyone with any economics background. If the government can (through whichever means) grow its economy faster than the growth of its debt, then it is similar to reducing the debt. We could discuss this in terms of debt as a percentage of GDP (debt to GDP ratio).

4] I think any mathematician could see that with the way the debt to GDP ratio is headed, it is not sustainable. The ratio can't just continue to keep increasing on forever.

5] The US debt will reach 41 trillion by 2026. Do you know what 5% of 41 trillion is? The U.S. could find itself having to spend $2 trillion every year just to pay the interest on the debt. The entire government budget last year was $6.27 trillion. Please think about that.

6] The current national debt works out to $156,000 per working person in the country, which is more than twice as high as the median household income (and that's income before taxes).

7] When this all begins to come crashing down, people like you will just blame "capitalism".

1] I was just making sure that you meant "pay off" and not pay down a little.
. . OK, you said the best thing is for a nation to pay off its debt. At this point the only way is to keep paying the debt by selling bonds, but it is likely that a big percentage could be sold to the Fed directly, without harming the economy.

2] You were one who made it black and white, when you asserted the best thing is to pay off the debt. I know that this is impossible if you mean using money from a surplus.

3 & 4] Of course, everyone who survives the brainwashing of what is taught as economics by believing it, will agree with you. So what, that is all just BS to serve the interests of the 1%.
. . Anyone with an understanding of ecology and the exponential function, will see that it is quite impossible to keep doubling the use of fossil fuels every 25 years (3% growth) is impossible now. The oil will not last 25 more years. The environment will become toxic in 25 years if we keep on that path.
. . So, anyone with an ounce of sense will know that the US can't grow its way out of the debt that the Repuds got it into with their tax cuts for 40 years. So, they will know that we will have to find another way. I assert that MMT is the way.

5] We can agree that something should be done. But, I predict that nothing will be done as long as the Repud Party is the 2nd American major party.

6] This doesn't matter at all, unless your plan is tried. You want to stop deficit spending. This alone will cause a recession and people will starve. And it is all for nothing, because 50% of the population would starve to death before you paid down the debt to cause a revolution that ends the US as a nation. You want to do this while the US is fighting climate change which you agree is true and is a problem.
. . This is about as stupid as deciding on Dec. 8th, 1941 that the US should begin to pay down its national debt instead of ramping up war production to avoid losing the war.

7] No. I will blame the Repud Party, the 1%, Neo-liberal economists, and people like you.
Capitalism would not be so bad if it had kept to the laws enacted in every state in the late 1700s that required all corps. to act in the public interest while they made a modest profit. If this view had continued, then in the 70s the oil comps. would have acted in the public interest to warn us and we would have acted to avoid this mess. That was when their own scientists discovered the truth about how climate change from burning oil, which was that that would heat up the planet so much by some time about now that most humans would starve for lack of grain production.
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[late]

Steve, you're wasting your time talking to him.

In a hard money economy, recessions from running out of money were common. When you pay off a debt, you are also destroying that money. (Prob not the best choice of words) So paying off debt reduces the amount of money in an economy.

What saved our economy was the Gold Rush.

[Puffer Fish]

Steve, you're wasting your time talking to him.

In a hard money economy, recessions from running out of money were common. When you pay off a debt, you are also destroying that money.

Did it ever occur to you that getting into debt was not a good idea in the first place?

Yes, of course there will be some suffering and financial squeeze when trying to pay down debt.

But if you're saying that is a reason not to pay down debt, you're being myopic.
It reminds me of that movie Idiocracy (2006) where the society had devolved to such a level of stupidity that they are using a green-colored energy drink to water their crops. The crops of course do not grow very well. The main character tells them they should switch to using water, but then that ends up causing the thousands of people at the energy drink company to lose their jobs, and circle of people who run the government stupidly blame him for that and throw him in prison.

Now imagine someone who is stupid enough to have the mentality that paying of their sizeable debt is not good thing because it will cause them financial hardship. Even though they're paying interest on this debt every month and every year.

So paying off debt reduces the amount of money in an economy.

I understand what you mean.

But "money" isn't what's actually important in an economy, it's wealth.

Just like you can't create wealth by borrowing money from yourself, government can't create wealth in an economy by simply borrowing money.

And of course you can't simply create more wealth just by printing more money.

[Puffer Fish]

1] I was just making sure that you meant "pay off" and not pay down a little.

You seem to be nitpicking my words and not understanding the bigger overall meaning of what I am saying.

5] We can agree that something should be done. But, I predict that nothing will be done as long as the Repud Party is the 2nd American major party.

The way I see it, the question is which party has more of a tendency to want to spend more money and drive up higher budget deficits.

Over the last 4 years, it seems Democrats want to expand spending but don't have the political will or courage to immediately increase tax levels to pay for all of that increase.

[Steve_American]

1] You seem to be nitpicking my words and not understanding the bigger overall meaning of what I am saying.


2] The way I see it, the question is which party has more of a tendency to want to spend more money and drive up higher budget deficits.

Over the last 4 years, it seems Democrats want to expand spending but don't have the political will or courage to immediately increase tax levels to pay for all of that increase.

1] It isn't nitpicking. It is asking you to be more clear.
Paying your debts and paying off your debt are very different things for a gov.

2] Like I said, and you ignored, the Repuds added far more to the debt than the Dems did over the last 42 years. So, you are clearly cherry picking which months to look at when you st look at the months Biden has been in office. [Note, you error I point to below.]

Why are you ascribing the last 2.4 years of the Trump admin. spending to Biden. Biden has been in office for about 1.6 years, not 4 years. And, the 1st 9 months of Biden's term the budget in place was the one signed by Trump in about Sept. of 2020, it was called the fiscal year 2021 budget.

[Steve_American]

1] Did it ever occur to you that getting into debt was not a good idea in the first place?

2] Yes, of course there will be some suffering and financial squeeze when trying to pay down debt.

3] But if you're saying that is a reason not to pay down debt, you're being myopic.
4] It reminds me of that movie Idiocracy (2006) where the society had devolved to such a level of stupidity that they are using a green-colored energy drink to water their crops. The crops of course do not grow very well. The main character tells them they should switch to using water, but then that ends up causing the thousands of people at the energy drink company to lose their jobs, and circle of people who run the government stupidly blame him for that and throw him in prison.

5] Now imagine someone who is stupid enough to have the mentality that paying of their sizeable debt is not good thing because it will cause them financial hardship. Even though they're paying interest on this debt every month and every year.


I understand what you mean.

6] But "money" isn't what's actually important in an economy, it's wealth.

7] Just like you can't create wealth by borrowing money from yourself, government can't create wealth in an economy by simply borrowing money.

8] And of course you can't simply create more wealth just by printing more money.

1] Did it ever occur to you that just about every nation in the modern world since 1500 has borrowed money? If it is so stupid why has every nation done it?

2] Why can't you understand that the lurkers can understand that there is no good reason for a nation to pay off its debts if they are in the currency it issues. You should try to look better in the eyes of the lurkers, because they are the jury you are trying to convince. You seem to think we are still on the gold standard.

3] Yes, it is a good reason not to pay down debt, if there is no benefit to anyone now to pay down the debt. Because there is no proof that someone in the future will suffer, I ignore your baseless assertion that someday someone will suffer if we don't.

4] Silly fictional example, so no reply.

5] Trying to change the facts of the situation we are discussing from the S Gov. to any single person, is not going to convince a single lurker. They can see that the person can't print dollars, and the US Gov. can.
[And so can banks, BTW. The total dollar value of the loans a Bank can make is not constrained by their deposits. The rule is delayed by a week, so the bank has a week to get more deposits, and if it doesn't get enough, the bank can borrow from another bank or the Fed itself.]

6] While wealth is important, so is income. That is why economists spend time calculating the total GDP of a nation. Do you understand the GDP is exactly equal to the total income of every person and comp. in the nation? I think you don't agree with this assertion of MMTers.
. . You can't spend wealth. You can sell it but you can't spend it. Most people care far more about their income than their wealth.
. . AFAIK, no economist publishes a report each year of the total wealth in the US. If it is so important, then why is it never tabulated?

7] OK, here again you talk about wealth.
IMHO, income is more important that wealth. Also, financial assets are very important. Every corp fights like hell to increase its financial assets. They see these as "wealth".
. . While the US Gov. can't create "wealth" by borrowing, it can create financial assets by borrowing and spending. For example, before the transactions person A has $1K and person B has no dollars. Then, the Gov. spends $1K into the acc. of person B, and soon after the Gov. sells a $1K bond the person A. Now, person A has a $1K bond and person B has $1K in cash in his acc. Both people think they have $1K in financial assets, and can use them to buy something (person A will have to sell his bond 1st).
. . Yes, the Gov. is now $1K in debt, but who cares? The Repuds under Trump added $8T to the national debt in just 4 years, setting a new all-time record for increasing a national debt/year in office. [IIRC the old record was about $1T/yr, and Trump's is now $2T/yr. He doubled the old record.] So, the Repuds don't seem to care about increasing the debt. MMTers don't care much either. Does this mean that Repuds act as if they believe in the truth of MMT? Yes, it does mean that.
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