tag:blogger.com,1999:blog-5465015914589377788.post5886963876932752228..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: The Deficit Myth - Modern Monetary TheoryMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5465015914589377788.post-79748251354850854072021-10-01T10:39:27.486-04:002021-10-01T10:39:27.486-04:00Hi AnatoliN,
To be clear, the author wasn't a...Hi AnatoliN,<br /><br />To be clear, the author wasn't advocating for the government to wipe out its debt by creating more dollars. Her point is that the government could easily do this if it wanted to. We sometimes hear that the government is "broke" but this is impossible for an entity that can create new money at will. I don't know what would happen if the government were to pay off all its debts (bonds, treasuries, etc.) with newly created dollars, but inflation is certainly a possibility.<br /><br />Both dollars and government bonds are just conjured out of thin air. The only difference between one and the other is that bonds pay interest and come with the promise to replace the bond with dollars when it matures.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-46549872390257879202021-10-01T10:28:44.134-04:002021-10-01T10:28:44.134-04:00Michael, thank you for the summary.
I do not comp...Michael, thank you for the summary. <br />I do not comprehend several points made by the author though, wonder if you could express your opinion on these:<br />1. "This means the government could wipe out the national debt in seconds". Imho, this can be achieved by manufacturing more money and transferring it to lenders. Such move will create a hyper-inflation and immediately cause a need for a bigger debt.<br /><br />2. "Governments typically choose to issue bonds (treasuries) to cover deficit spending, but such bonds are really just a different kind of money conjured out of thin air." Imho, bond is an IOU, modern money has nothing behind it; how are these the same?AnatoliNhttps://www.blogger.com/profile/07937984526970646627noreply@blogger.com