[Puffer Fish]

Is buying something on borrowed money a bad idea? Well, it depends. It depends on what you are buying, for what reason, who are you buying it from and who is lending you the money, and what are the terms.

Yes, that's totally true, theoretically.
But I've rarely ever seen government actually buy something that was worthwhile with this borrowed money.

So many of these so-called "public investments" are not really true investments at all (or they won't adequately pay back). They just use that language as an excuse to spend and borrow.

[XogGyux]

Yes, that's totally true, theoretically.
But I've rarely ever seen government actually buy something that was worthwhile with this borrowed money.

So many of these so-called "public investments" are not really true investments at all (or they won't adequately pay back). They just use that language as an excuse to spend and borrow.

First thing, you got to see who owns the US debt. Fear mongers like to use the debt as if we are somehow being China's bitch or something like that, but the vast majority of US debt is own by US citizens, US banks, Fed, US companies. Less than 20% of our debt is owned by foreign entities.
Also, we got the printer. Now, I am not going to echo the modern monetary theory echo chamber cries as I am not a subscriber of that theory myself, however it does feel pretty powerful to have the printer that can print the money to get out of debt, I wish I had that when I finished medschool .
Finally. Do you really know where the US spending goes? Check it out... lots of people think the US is throwing money at lazzy gansters and women that just keep having children for the sake of getting more goverment assistance. The truth is, 3/4th of our budget goes to 3 areas, social security, defense and medicare/medicaid. Furthermore, not a substantial number of people want to make cuts to any of those. Bad investments? Not really, the US is what it is in large part because of the military. Independently of the "ethics of war economics" . The other two? We don't get our investment back? The average american will certainly get more in benefits from SS/Medicare. See it as insurance.

[Puffer Fish]

First thing, you got to see who owns the US debt. Fear mongers like to use the debt as if we are somehow being China's bitch or something like that, but the vast majority of US debt is own by US citizens, US banks, Fed, US companies.

Oh, not this argument again.

Yes, that may be true. It still doesn't change the problem.

Another country owning even 20% of the total debt could still threaten the US with financial disaster.
The US would immediately have to come up with the money and it would not be easy.

I'm well aware of all the arguments your side will use here, one after the other, but each of these arguments ultimately lead to a logical dead-end.

Also, we got the printer.

Oh yes, the printer.
Sorry, that's not going to work.
We could have a whole separate discussion thread about why that is not going to work.

Sorry, I'm tired of repeating numerous different arguments over and over again. I'm only going to debate and focus on one argument per thread.

The idea that you can print your way out of debt, and there will be no consequences, is not really a well thought out one.

[SueDeNîmes]

It's not a different instance. The article I posted is from 2010. It's about the same program. Here's a 2009 article on the same program:



https://www.wsj.com/articles/SB125306983809914715

Again, this move was motivated by the FED's rescue program, which isn't part of its standard montary policy. In retrospective the move was unnecessary because at no point was the FED not capable of raising interest rates because of a lack of assets, which might have happened if the mortgage-backed securities it bought had lost its value. In fact there was no need to raise interest rates in the first place.

In general central banks made a lot of profit with their QE programs. There's less need for the government to recapitalize them than ever (a very rare occurrence to begin with).

Not sure what I'm supposed to disagree with there. I don't claim that Treasury issues bonds because there'd otherwise be no assets for the central bank to play with. Rather, it does so to drain the reserves created by "deficit" spending from the banking system:

"(A) government issues securities to the public not to raise funds, but instead to remove excess bank reserves (caused by government spending that is higher than tax receipts) and '...create a shortage of reserves in the market so that the system as a whole must come to the [central] Bank for liquidity."
https://en.wikipedia.org/wiki/Government_debt

Central bank OMOs are a different matter and come later since the central bank cannot buy bonds directly from Treasury. For some reason you asked for an example of "a situation where the treasury had to issue bonds such that the Fed could perform OMOs". Using other assets in the cited examle, while possible, would have risked unwanted consequences, hence issuance "at the request of the Federal Reserve" and "in order to drain reserves from the banking system."

Again, this is tangential to the question of whether deficit spending is contingent on bond issuance. Nor do I claim that it's "part of standard monetary policy". Rather, it would be if Treasury didn't match deficit spending with bond issuance, as the central bank would need that quantity of some asset/s in order to drain the reserves and maintain a target interest rate.