The U.S. National debt is largely held by domestic taxpaying entities and is used as a means of ensuring a stable and continuous money supply, the purpose of which is to guard against (immensely destructive) deflation of the dollar. Much of the debt is also routinely bought up by the Fed, as a means to inflate the value of U.S. debt, and thus serves to create artificial wealth for the Federal Government to spend, by increasing the buying power, through means of inflating demand for of G-bonds.
The distribution of Government debt to foreign entities serves to ensure international tranquility as it serves to tie the fortunes of National economies (example: the exchange of debt between the U.S. and Japan). Such may be utilized to ensure a global tranquility (through means of yoking otherwise unfriendly nations together by mutual economic dependence) and ensure the continuity of the U.S. dollar as the primary accepted world currency.
Few serious political factions in the U.S. would seek to bring an end to such a prosperous system, as such would hasten the demise of western civilization.
From the article: "No one says that paying off the debt caused the depression. The bubble was going to pop sometime. But the result was that we had to kiss a debt-free U.S. goodbye. The country never came close again."
So what was the point of this article in relation to paying off the debt being a "baaadddd idea"?
The U.S. National debt is largely held by domestic taxpaying entities and is used as a means of ensuring a stable and continuous money supply, the purpose of which is to guard against (immensely destructive) deflation of the dollar. Much of the debt is also routinely bought up by the Fed, as a means to inflate the value of U.S. debt, and thus serves to create artificial wealth for the Federal Government to spend, by increasing the buying power, through means of inflating demand for of G-bonds.
ReplyDeleteThe distribution of Government debt to foreign entities serves to ensure international tranquility as it serves to tie the fortunes of National economies (example: the exchange of debt between the U.S. and Japan). Such may be utilized to ensure a global tranquility (through means of yoking otherwise unfriendly nations together by mutual economic dependence) and ensure the continuity of the U.S. dollar as the primary accepted world currency.
Few serious political factions in the U.S. would seek to bring an end to such a prosperous system, as such would hasten the demise of western civilization.
The problem wasn't getting out of it. It was the following decentralization of the currency.
ReplyDeleteFrom the article: "No one says that paying off the debt caused the depression. The bubble was going to pop sometime. But the result was that we had to kiss a debt-free U.S. goodbye. The country never came close again."
ReplyDeleteSo what was the point of this article in relation to paying off the debt being a "baaadddd idea"?
No, no, simpletons like us are too dull to understand. Laci is far to intelligent to be constrained by logic and reason.
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