[Steve_American]

Bursting The Bubble Of Fairytale Economics | Prof. Jon D. Erickson
35 min.

Based on a very on-point book about changing western society to fit it for the 21st cent.
He attacks for growth's sake. He asks growth for how much longer? Growth to benefit whom? Growth that hurts whom? Etc.
Infinite growth on a finite planet is impossible. It will end. Our only choice is -- will the end be planned or will it be imposed on us by mother nature and physical reality.

Remove the [==] to see the video.
https://www.you[==]tube.com/watch?v=NfUE1btM6ys&list=TLPQMTEwODIwMjOcxANha4fzdw&index=15

.

[Puffer Fish]

Steve_American, do you care to provide any brief summary of the points made in that video?

Try to condense the essence down into just a paragraph or two.
I see that you attempted to provide a summary but it is very vague.

Without watching the video, I can provide my opinion on growth. Capitalism tends to create the most opportunities for people when there is economic growth. There are reasons why that is but that would probably be another complicated discussion.

If the population grows (e.g. from immigration from other poor countries) then the economy needs to grow to accommodate those additional people, otherwise the average standard of living will decrease. Economy divided by number of people equals living standards (or GDP per capita).

[Steve_American]

@Puffer Fish,
I am fed up with you.

You don't argue to reach an agreement. You walk away when you seem to be losing.
. . . For example, I have "proven" that a nation should never try to pay off its national debt. You walked away for that discussion.
Two days ago, you replied to a post by me, arguing about the negative things that will happen when it comes time to pay off the US national debt.
I have pointed out that England changed into the UK over a 324 year time period in which it had a national debt at the end of every one of those years. So, how do you conclude that someday, the UK will have to pay off its national debt?
. . . An MMT understanding of the national debt is that it is money that the Gov. created with spending and didn't tax back yet. It is financial wealth held by the people/corps. It is not causing inflation. It is being saved in the form of US bonds. MMT sees no possible benefit to anyone if the Gov. took that wealth away from its holders.
. . . OK, this is not true. Some people think that the super-rich have too much wealth and use it to undermine democracy by bribing Congress and the USSC Justices. Etc. But, this is not an 'economic' reason, it is a social reason.

So, no I'm not going to summarize the video, so you don't need to watch it.

You will not agree anyway.
.

[Puffer Fish]

You don't argue to reach an agreement. You walk away when you seem to be losing.
. . . For example, I have "proven" that a nation should never try to pay off its national debt. You walked away for that discussion.

I try not to walk away from discussions. In fact I think I am more persistent than almost anyone else in arguments.
If I "walked away" it must have been an oversight.
Refer me back to the thread and I can continue any argument you want.

It's also possible that I felt I presented compelling argument against your argument, but that you saw things differently.
In that case my perception may have been different than yours. It would not have felt like "walking away" to me.

Two days ago, you replied to a post by me, arguing about the negative things that will happen when it comes time to pay off the US national debt.

I do not recall that. You cannot expect me to keep on top of every discussion and check all past discussions everyday.

I have pointed out that England changed into the UK over a 324 year time period in which it had a national debt at the end of every one of those years. So, how do you conclude that someday, the UK will have to pay off its national debt?

You might have interpreted my statement too literally.

I believe my statement still holds true, in the most important sense, even though you can point to examples such as this.
Maybe it would be more accurate to say that a country ends up having to pay for its debt, in one way or another. Whether in inflation, interest rates, or finally in the very end.
If you look at the graph of UK debt as a percent of GDP, I believe it has been shooting up in an unsustainable way over just the last 15 years. To get it back down, can you agree the UK will probably have to begin paying back some of that debt? (Something that likely may not happen)

I'm of course willing to discuss any of these issues in more detail, but do not want to derail this thread. So it's up to you to ask.

[Puffer Fish]

It is being saved in the form of US bonds.

The problem with that is that US bonds do not really represent wealth in the economy, and their worth is entirely predicated on being eventually repaid in dollars.
If US bonds act as "money" (or savings) to the people who hold it, then those bonds are like "anti-money" (or debt) to the government. I believe those two effects cancel each other out in the total economy (at least partially).

An MMT understanding of the national debt is that it is money that the Gov. created with spending and didn't tax back yet.

I'm going to point out that that statement has two different possible meanings.
Although you probably do not see this, I believe you may be committing a logical error called an equivocation fallacy.
One statement, that has two subtly different meanings, one of which is obviously true, but you then take that statement and its other alternate meaning to justify something else.

I suggest you try to reword that statement in a more precise way that does not leave any room for ambiguity of meaning.

I am not going to waste my time putting up an argument when it is not clear exactly what your statements mean (when there could be more than one meaning).

[Steve_American]

I try not to walk away from discussions. In fact I think I am more persistent than almost anyone else in arguments.
If I "walked away" it must have been an oversight.
Refer me back to the thread and I can continue any argument you want.

It's also possible that I felt I presented compelling argument against your argument, but that you saw things differently.
In that case my perception may have been different than yours. It would not have felt like "walking away" to me.


I do not recall that. You cannot expect me to keep on top of every discussion and check all past discussions everyday.


You might have interpreted my statement too literally.

I believe my statement still holds true, in the most important sense, even though you can point to examples such as this.
Maybe it would be more accurate to say that a country ends up having to pay for its debt, in one way or another. Whether in inflation, interest rates, or finally in the very end.
If you look at the graph of UK debt as a percent of GDP, I believe it has been shooting up in an unsustainable way over just the last 15 years. To get it back down, can you agree the UK will probably have to begin paying back some of that debt? (Something that likely may not happen)

I'm of course willing to discuss any of these issues in more detail, but do not want to derail this thread. So it's up to you to ask.

It was in this thread.
THE COMBINATION OF THE "STAMP ACT" RECESSION & THE SOON TO BE 4TH TURNING CAUSED THE AMERICAN REV.
I wrote a reply, and this site eat it by sending it to Drafts. I'll reply there and we can continue there.

No, I can't agree that the UK will have to pay its debt down soon. If it tries to do that it will without ant doubt cause a recession. As far as I'm concerned the Bank of England can buy come of the debt and then just cancel it. It makes no sense for the BOE to hold UK debt. When the UK pays the BOE the value of the bond when it comes due, the BOE turns around and gives the money back to the treasury.

No, I don't agree that a big national debt will cause inflation. I have explained why 3 times on this site. You have not understood my proofs. I'll try again.
1] Mostly the money of the debt is in savings where it can't be used to bid up prices.
2] The Cato Institute did a study of all cases of hyperinflation (IIRC in all of history). They reported that in every case it was caused by shortages of essential goods. This included Germany in the 1920s and Zimbabwe Try googling it.
3] The SFFed about a year or 2 ago published a report that said that just 0.4 percentage pts. of the 6% or 7% inflation was caused by covid spending. This included the $5.5T of the so called stimulus and the cost of making the vaccines, etc. Since the Fed's target for inflation is 2%, 0.4% is just a small part of their target. And that was for over $5.5T of unpaid for spending.
4] Banks also create dollars when they make loans. You can't prove your claim that people factor in the fact that the borrower will have to pay the loan back someday when they think about spending the money the borrower just used to pay them for some reason. I deny this claim very strongly. And, it is impossible for you to prove. So, why don't you worry about the inflation that will be caused by banks creating money. Your economic theory has never agreed that banks create money with every loan, even when it was proven with an experiment.
5] The idea of a nation needing to worry about the size of its debt is a holdover from the gold standard. Your economic theory didn't adjust to the change when the US took the world off the gold standard and onto floating currencies. It didn't explain why it didn't need to do that. It just ignored the change.

Finally, you don't understand that arguing from authority is not going to convince me. I believe that your economic theory has as much relevance here as sacred religious books do in arguments of people with different religions.
My analogy is this => a Hindu and a Christian are debating religion. The Hindu keeps quoting his sacred book. The Christian is not moved by that at all. In the same way, your economic books are based solely on logic and premises, but many of the premises are obviously false, and in logic, you can't use a single false premise in a valid proof. So, I see that your assertions are not proved with a valid proof. You have never responded to this key assertion of mine. [To repeat it. The proofs of mainstream economic theories are all based somewhere on a premise that is obviously false. Just 3 examples are => banks use deposits to make loans and so are just middlemen between savers and borrowers, everyone in the market has exactly the same knowledge about the thing they are selling/buying or everyone knows everything about everything, including about the future, and you can reduce the market to just 1 person who is selling everything to himself (AFAIK even assuming the market is just 2 people is also obviously false).]
.

[Puffer Fish]

No, I can't agree that the UK will have to pay its debt down soon. If it tries to do that it will without ant doubt cause a recession. As far as I'm concerned the Bank of England can buy come of the debt and then just cancel it. It makes no sense for the BOE to hold UK debt. When the UK pays the BOE the value of the bond when it comes due, the BOE turns around and gives the money back to the treasury.

If you look at long history of Britain, yes, debt continue to increase but Britain also grow rapidly in economy, technology, and population over this time. So this is not fair example.
Over last 15 years, if look at debt to GDP graph in UK, I think increase at unsustainable rate.

Yes, start rapid pay off debt, will cause a recession. Just like person try to pay off of their credit card debt, could result in severe financial difficulty and pain. But is ultimately best way for long term.

Bank of England can buy the debt, but then I think you get inflation. Yes?
I mean, when Bank of England buy, they pay a little bit more for that debt than market thinks it is worth. That is the point.
But this dilutes the worth of their Reserve Assets relative to the supply of bank notes (money) in circulation. So there is inflation.

If UK don't want to pay the interest on the debt the Bank of England owns, then you definitely get inflation.
I could explain this in more detail if you need, or start a new thread about that.

[Puffer Fish]

No, I don't agree that a big national debt will cause inflation.

Well not necessarily. If government just treats the debt as normal debt and pays interest on it, and Central Bank does not get involved, then theoretically there can be no inflation. (Even Central Bank do buy some debt and treat it like ordinary bank, not try to lower interest rates, there can still be no inflation)

But if just issue massive amount of debt, then can start causing inflationary effect, because people realise what government will do in future, know there will have to be inflation or default, so private sector does not want that debt as much, loses value.

Of course this can be complicated, depend on term of the debt, if it scheduled to be paid back in 1 year, 5 years, 20 years.

I have explained why 3 times on this site.

You have not understood my proofs. I'll try again.
1] Mostly the money of the debt is in savings where it can't be used to bid up prices.

I have not time to address all points. I address 1] and you can pick one more for me to respond to.

People's savings still very much affect prices. I think this major reason stock market crash, Great Depression.
If people think they have more money in savings (even in form has less liquidity like debt or stocks), they spend more.

How can you say savings not integrally related to inflation?

Maybe some people even use that debt directly to make purchases, without actual exchange of money , common in corporate world.

[Puffer Fish]

4] Banks also create dollars when they make loans.

I explain to you before why that not true.

Bank may create "money" but that money just represents someone else's future obligation. When ordinary bank create money, always from creation equal amount of debt from someone else.
Add money to economy but also add debt. Two cancel each other out, mostly. (Though can be more complicated)
No inflationary effect.

You can't prove your claim that people factor in the fact that the borrower will have to pay the loan back someday when they think about spending the money the borrower just used to pay them for some reason. I deny this claim very strongly.

You being ridiculous. The person who thinks about the debt is the person who is in debt. (And of course the bank)

This seem like straw man (argument) to me. That which you describe was not really my argument.

Your economic theory has never agreed that banks create money with every loan, even when it was proven with an experiment.

Depend of course exactly what you mean with words "create money".

You need to be more precise exactly what you mean.

Yes, of course I recognize it create money, but it also create debt, which is opposite of savings.

That is a little like making money disappear from bank account, like "negative money".


Think of it this way, can individual not "create" their own money by paying in "I owe you" promises? Assuming that they will repay, do you really think that would cause inflation, in a small economic system?

If someone borrow money this year, then repay debt next year, then that will be more money they have this year, but also less money they have next year. Over time, the two equal each other out.
Try imagine this person borrows money from their employer who is same person who is paying them their income.
Employer pays them double money this year, but then no money next year.
Average that out with many people over different years.


You don't need to respond to all my points. There are many words, too hard respond to all. Just understand my meaning and try to respond to core of meaning.

[Steve_American]

If you look at long history of Britain, yes, debt continue to increase but Britain also grow rapidly in economy, technology, and population over this time. So this is not fair example.
1] Over last 15 years, if look at debt to GDP graph in UK, I think increase at unsustainable rate.

Yes, 2] start rapid pay off debt, will cause a recession. Just like person try to pay off of their credit card debt, could result in severe financial difficulty and pain. 3] But is ultimately best way for long term.

4] Bank of England can buy the debt, but then I think you get inflation.Yes?
I mean, when Bank of England buy, 5] they pay a little bit more for that debt than market thinks it is worth. That is the point.
But 6] this dilutes the worth of their Reserve Assets relative to the supply of bank notes (money) in circulation. So there is inflation.

7] If UK don't want to pay the interest on the debt the Bank of England owns, then you definitely get inflation.
I could explain this in more detail if you need, or start a new thread about that.

PF, this reply is a perfect example of my problem with you. You seem to think that I think you are an infallible economist. You seem to think that I will take your word or your gut feeling as proof of anything.

1] You thinking that it is unsustainable doesn't convince me.

2] It doesn't matter how fast the Gov. sucks income out of the economy by collecting tax dollars and not spending them back into the economy (this is always someone's income.), eventually there will be a recession. Suck enough income out and people can't make the payments on their debts.

3] NO! Paying off the national debt is NEVER good, let alone the best choice. Name 3 nations that have paid off their national debt. The only one I know of is the US in about 1830, when it was taking the richest land in the world from the natives and selling it to settlers.

4] Here again you just assert what we are disagreeing about. No, the BOE buys debt every day, AFAIK. It is controlling the interest rate by buying 'bonds'.
. . . IIRC, the Bank of Japan is holding about 40% of Japanese bonds. This has been true for at least 6 years and until covid shortages Japan had less than 2% inflation. This needs to be explained.

5] I don't know that the BOE is forced to pay more than market price for the bonds it buys. Do you know this for a fact? Can you prove this?

6] Here you used a pronoun = "their" which can mean anyone. Also, if I assume that the 'their' refers to the BOE, then you are asserting that the "Reserve Assets" of the BOE is somehow supporting the value of the Pound. You are putting the UK back on to a gold standard with these mythical reserve assets replacing gold. Just why would people want the reserve assets instead of their Pounds? This assertion goes against everything that MMT asserts. Mostly that taxes give the fiat currency value, and that the fiat money is not backed by anything. The Pound notes say clearly that the Gov. of UK will give you 5 one Pound notes for your single 5 Pound note.

7] If the UK Gov. pays the BOE the interest on the 'bonds' it holds, then the BOE will take out a small cut less than 2% and give the rest back to the UK Gov. Why on earth would the Gov. risk the economy to avoid paying interest that it will get back soon. And the 2% is money it can create. Think of aa perfect counterfeiter, who makes perfect $100 bills. Why would he ever fail to make a payment.
. . The idea that the BOE is independent is another of those false premises MS econ. uses to prove its conclusions. For the Fed. I know that the Fed pays about 97% of its revenues each year to the treasury. Not its profits. This leaves just 3% of its revenues to pay all its expenses and make payments to its "supposed" owners, i.e. some private banks. What owner will accept 1% to 2% of revenues as its cut? Also, those banks don't appoint the board of the Fed, the US Gov. does. [I got that 97% figure from the official Fed site.]

PF, again, this post is very short of facts that relate to the question we are discussing. The fact that if a person pays down his debt too fast will not be able to eat -- is assuming the people and nations with fiat currencies are pretty much alike. I know you can say this to most and they will accept it. However, this is another one of those false premises that MS Econ uses to prove its conclusions. It is just not true, now that there is fiat money for most nations.

AFAIK. all the facts that you used to hand-wave away the example of Japan also apply to the history of the US. It may not be true in the future what with climate change. But, that is not really evidence that creating money by selling bonds to the central bank (indirectly or directly) will cause inflation when certain conditions are assumed to be in force.
. . . Now, if you assume that climate change will certainly cause shortages of things like food, then fine, I always asserted that shortages will cause inflation no matter what the money supply is.
.

[Steve_American]

I explain to you before why that not true.

Bank may create "money" but that money just represents someone else's future obligation. When ordinary bank create money, always from creation equal amount of debt from someone else.
Add money to economy but also add debt. Two cancel each other out, mostly. (Though can be more complicated)
No inflationary effect.



You being ridiculous. The person who thinks about the debt is the person who is in debt. (And of course the bank)

This seem like straw man (argument) to me. That which you describe was not really my argument.



Depend of course exactly what you mean with words "create money".

You need to be more precise exactly what you mean.

Yes, of course I recognize it create money, but it also create debt, which is opposite of savings.

That is a little like making money disappear from bank account, like "negative money".


Think of it this way, can individual not "create" their own money by paying in "I owe you" promises? Assuming that they will repay, do you really think that would cause inflation, in a small economic system?

If someone borrow money this year, then repay debt next year, then that will be more money they have this year, but also less money they have next year. Over time, the two equal each other out.
Try imagine this person borrows money from their employer who is same person who is paying them their income.
Employer pays them double money this year, but then no money next year.
Average that out with many people over different years.


You don't need to respond to all my points. There are many words, too hard respond to all. Just understand my meaning and try to respond to core of meaning.

PF, there are 3 conditions in an economy like ours in terms of banks making loans.
1] The total amount each year of new loans is very close to the total repayments.
2] The total of all loans is more than the repayments.
3] The total of loans is less than the repayments.

Normally case #2 is what happens. In this case every year more and more money is being added to the economy by the banks making loans. This money is spent increasing the incomes of many people. I assert that these people don't care where the money came from. They earned it and so they spend or save it.
. . Yes, some spend less because they are making payments on their loans, but in this case there are more people not making payments than making them. [If there are more making payments than not, then we have case #3.]

During a time when case #3 is the case, then banks have stopped lending because there is a recession. Every year it gets worse because banks have less reason to make loans and people have less income because last year more money was destroyed by the loan repayments than created by new loans. So, every year it gets worse. This is why the Gov. must deficit spend to increase the incomes to offset the income losses from repayments being more than loans.

So, it seems like people don't reduce their spending in the boom because it keeps going,
until a recession starts. Your assertion that people in mass plan ahead for the crash is proved false by the fact that the boom continues, and almost all people are not ready for the crash.
____________________________.___________________________________

You asserted that people with a lot of savings will spend more than people with no savings or little savings. Did you control for income?

Are you asserting the 2 people with an income of $100K and one has $50K in savings and another has no savings; that the one with $50K saved will spend more? OK, can we assume that they pay the same in taxes or that the $100K is after taxes. Now, AFAIK they both must either save or spend each and every dollar. So, you are assuming that the one with no savings wants to save more than the one with $50K saved already. This seems like a bad assumption. The one with no savings may not save because he doesn't see the value in saving, while the one with $50K already saved likely sees the value of saving more.

I'd even bet that as income goes up beyond $1M the percentage spent declines as their income increases. The amount saved already would not change this all that much. Remember that I asserted that the money used to buy bonds is saved and so can't be used to bid up prices. Now I'll assert that most of the amount of dollars in bonds comes from people with incomes over $1M/year or corps like insurance comp. These people can't spend all that they make, they must save. [Or invest.]
. . It seems obvious that the bond buyers wanted to save those dollars. If they wanted to spend them, they had that choice, they just chose to buy a bond.
. . So, you just assert that you think that people with savings will spend more and I can show that this is not all that likely. OK, now you show me why people with more savings will spend more, controlling for income.
.

[Rich]

If the population grows (e.g. from immigration from other poor countries) then the economy needs to grow to accommodate those additional people, otherwise the average standard of living will decrease. Economy divided by number of people equals living standards (or GDP per capita).

Yes when poor people move from poor countries to wealthy western countries it almost always results in a massive increase in their carbon foot print. Personally I think a 100 million would be a good target for a sustainable world population.

[late]

Personally I think a 100 million would be a good target for a sustainable world population.

How do you plan on killing a few billions people?

And then how do you intend to control procreation?

That, and a unicorn, have a great deal in common.

[late]

PF...

He clearly thinks he can skate by on BS.

[late]

"Even so, if the Fitch decision had been entirely based on the likelihood of future debt ceiling crises, one could forgive them for taking a clear-eyed stand. After all, it is hardly their fault that the truth -- that Republicans' nihilism is harming the country's economic prospects (as well as everything else) -- does not win the political argument.

So this is all motivated nonsense. Indeed, as soon as I saw the news of the downgrade, I thought: "Oh brother, they decided to make an ideological statement. Just what we need from a supposedly neutral ratings agency." This was straight-up debt panic and fearmongering.

How wrong are they? In his subscribers-only (that is, paywalled) newsletter late last week, Paul Krugman offered a masterful takedown of the idea that the US could have a non-hostage-taking-related default. Under the title, "Afraid of a debt crisis? Try doing the math," Krugman made me smile by noting the utter vapidity of people who know nothing about public finance but become apoplectic about big numbers. His sage advice: "Never take anyone who rants about TRILLIONS OF DOLLARS seriously."

For his part, Krugman noted that "quite a few economists, including some who had warned strongly against big spending, pronounced [Fitch's] decision 'inept,' 'bizarre,' 'absurd' and worse." More to the point, he re-made the arguments that neither theory nor evidence supports the claim that the US's long-term debt is unsustainable. In particular, he revisits Japan, which has a debt-to-GDP ratio (the only number that one should care about when looking at these issues) roughly double that of the US yet "has defied predictions of an imminent debt crisis for decades." The UK has an even longer history of "high" public debt, going back centuries without ever having had a debt crisis.

Does the US have a debt problem? No. Does it have a failure-to-understand-the-debt problem along with a can't-get-rid-of-the-debt-ceiling problem? Yes and yes. Even worse, it is all very bipartisan. Luckily, the crises of democracy and climate change will probably destroy us before the shared delusions about the debt and the debt ceiling ruin the economy."

https://www.dorfonlaw.org/2023/08/debt-panic-bipartisan-inanity-and.html

[Puffer Fish]

1] You thinking that it is unsustainable doesn't convince me.

I expect you to look at the graph and context and use some basic logic and commonsense.

I don't think this should be too unreasonable. If the debt to GDP ratio (debt as a percentage of total economy) has been dramatically increasing in recent years.

That suggests debt has been growing at a fast rate (faster than economic growth) and is heading in a direction that will be less manageable (even if you think it will still be very manageable).

It shows things are heading in a certain direction. Basic logic tells us that obviously that cannot go on forever, doesn't it? So I am correct about commenting that it is unsustainable.

It should suggest to us that the government is paying the interest rates on this debt by getting into more debt.

It also shows us that the long history of the UK being in debt does not really prove anything. Not unless we assume that economic growth will continue in the future like it has in the past, which I do not think is reasonable to assume.

[Puffer Fish]

2] The total of all loans is more than the repayments.

I think that's your "free money" mentality, wanting something for nothing.

You are incorrect. In a normal situation, at least in the private sector, the banks will recover back all the money they loaned, as an aggregate. Yes, there will inevitably be some loans that will default, but that is what interest rates are for, to cover the risk.

Unless you are referring to constantly looking into the future. But as I explained, that is sort of like a pyramid scheme. Similar to how government pensions are set up. Promising money (and wealth) now that will come from the future.

[edit: I think I may have responded to your quote out of context, getting two of your posts confused)

[Puffer Fish]

2] It doesn't matter how fast the Gov. sucks income out of the economy by collecting tax dollars and not spending them back into the economy (this is always someone's income.), eventually there will be a recession. Suck enough income out and people can't make the payments on their debts.

I would argue people shouldn't have gotten into all that debt in the first place.

It seems to me you just want to suck money out of the future to spend now.

But that is the definition of a pyramid scheme.

Maybe you are familiar with Hilbert's paradox of the Grand Hotel (in mathematics)? That seems sort of what you are trying to do.
Borrow money now, then when it comes time to repay it, borrow more money, then when it comes time to repay that, borrow even more money. Then you think you got free money and it will never have to be repaid.

[Puffer Fish]

4] Here again you just assert what we are disagreeing about. No, the BOE buys debt every day, AFAIK. It is controlling the interest rate by buying 'bonds'.

You understand how Central Bank control interest rates, don't you?
They do not magically just "set" interest rates.

If they want to lower interest rates, they have to lend out money, at below market subsidised rates. Like let's say going free market rate is or would be 4%, Central Bank lend it out at 3%.
But this creates inflation (I claim), so it goes back to an earlier part of my argument.

Do you want me to start a new thread discussion explaining the specifics of exactly how it creates inflation? I will if you want.


(If on other hand central bank buy bonds at going market rate, then theoretically it can do that and not cause inflation. But there would be no point in doing that. But point is you don't get a free lunch in the economy)

[Puffer Fish]

Does the US have a debt problem? No. Does it have a failure-to-understand-the-debt problem along with a can't-get-rid-of-the-debt-ceiling problem?

I agree that US had a failure to understand the debt problem, but in a totally opposite way from how people like Steve_American would have us believe.

Steve_American just doesn't believe it is a problem and seems to think a country can get into practically all the debt they want it does not have to matter.

Luckily, the crises of democracy and climate change will probably destroy us before the shared delusions about the debt and the debt ceiling ruin the economy."

In my opinion this is laughable. I think the debt will likely reach unsustainable levels and then precipitate a debt crisis, where debt, inflation, and rising interest rates will suddenly attack together. There will be a death spiral, fairly rapid.

The Central Bank will not be able to try to buy up more debt to push interest rates down because that will only contribute to more inflation, and they will be trying to stop inflation. The government will be struggling as interest rates rise because that will make the debt unmanageable and begin consuming a growing chunk of the tax revenue.

That might then precipitate a political crisis.
And climate change is something more way off in the distant future and there's a lot of hysteria about it. (Partly for political reasons, because Left desperately needs an issue to fight over, and making people think you're doing something for the climate is easier than actually improving visible economic circumstances. You can also make people feel good about having to make economic sacrifices, get them to think it's for the sake of a noble cause)