Does the United States have a spending problem? Obviously, but I really wanted to talk about how the cost of living crisis is presenting itself in your community. That relates to this article because you can’t squeeze blood from a stone. If all of you have no disposable income, no savings, and a job market that can’t support your current cost of living… What happens if you lose your job? Do you default on loan obligations along with America because we are stretched to the edge. Should we vote in members of congress to pass more tax breaks for private jets?Are mods whack? Let me know in the comments.
If the USA can’t pay it’s debts, we can’t trade. Everyone should care about the national debt. It’s not coming out of the billionaires’ bank accounts, and multinational corporations will simply do business elsewhere. We don’t have the infrastructure to produce internally, and if our credit score degrades enough, we won’t be able to build it, either.
Yeah, you don’t understand money.
Then explain it to me.
You’re the one who said “if we can’t pay our debts we can’t trade.” That’s nonsense on its face. You need to explain that to me.
Meanwhile, I’ll waste cycles attempting to explain modern monetary theory on a phone keyboard.
Fiat currency is just numbers. Ones and zeros. The Fed(eral Reserve) can simply type these numbers into existence. That’s where the currency comes from. China can buy treasuries, but in a fiat system it’s unnecessary. Money comes from The Fed. The government could close the bond window tomorrow and it would just mean China would put its money in a bank account. Or, you know, spend it on things sold in dollars. Which is what currency issuance for.
Treasuries are a relic of the gold standard when currency was federally required to be tied to some quantity of shiny rocks. It was discarded because it artificially constrained monetary policy. E.g. during wars, the government couldn’t legally print currency, which is why there were all those silly war bonds.
Now the only constraint on issuing currency (really) is inflation. As we are about to find out, inflation is more than just currency issuance. Oil shocks, pandemic-induced supply chain crunches, and avian influenza outbreaks can raise inflation with any change in currency.
Right and as the fed types numbers in to appease congresses drunk spending, inflation goes fucking haywire and we’re all stuck with stagnant wages from 2005.
Billionaires and multinational corporations get MMT. Everyone else gets traditional economics.