Can the US just "print money" to pay all the federal budget?
First of all, the debt is not debt in the traditional sense. It's a legacy of the times when the money supply was fixed to a commodity. That has not been the case since 1971.
That doesn't explain anything. You have to compare today's debt economy with that of the 19th century, or up to 1930, when the only debt was war debt, which was then paid down in the years following the war.
We changed this beginning with the 1930s, when we began running up debt in order to goose the economy rather than to pay for war.
Why did the country do OK up until 1930, but then have to change and begin running chronic deficits in order to goose the economy? From 1930-1970 we did this, gradually increasing our dependency on these annual deficits, with no abrupt change in 1971. We departed from this trend in the late 1990s, returning to zero deficits for 2-4 years.
Why did the economy not require the chronic deficits up to 1930, and in the late 1990s, but did require them after 1930-1995? It has nothing to do with the change in 1971. We were already running the chronic deficits BEFORE 1971, and we stopped doing the chronic deficits for a short time in the late 90s. So how can a change in 1971 explain this?
Now it's a reserve management operation, a way for our trading partners to earn interest on the dollars we pay for imports, and corporate welfare.
There's no need for us to provide a way for our trading partners to earn interest on dollars.
You're not explaining why we had to start running these chronic deficits beginning in the 1930s, but not before. Or why we were able to do without them in the late 1990s.
There is no issue with repaying the debt. It never has to be repaid. It's money we owe ourselves.
That's babble. Bond-holders have to be repaid, and they are repaid. You cannot explain this by throwing around slogans such as "it never has to be repaid" or "we owe it to ourselves."
Give us a no-nonsense reason why we had to start running these on-going deficits every year beginning in the 30s.
Like Jason, you have no understanding that a dollar spent into the private sector is an asset to the private sector and a liability to the govt. Collectively, these liabilities are the national debt. If the govt taxed back all of its spending every year, the private sector wouldn't be able to save any of it.
Do you have figures showing that there were no private savings in the late 1990s when the gov't "taxed back" all of its spending?
And likewise do you have figures to show that there were no savings in the U.S. prior to 1930, except during the high-debt years when they ran deficits to pay for war? I doubt that you have data on which to base this savings theory.
It's not true that the gov't must run up chronic deficits in order for there to be private savings. There have been private savings in years when the gov't ran surpluses. If perhaps those savings were somewhat less than in the deficit years -- then so what? Who says how much exactly the private sector must save? Who are the overlord barons who presume to dictate this?
Selling exports is another way to accumulate savings, but we buy more than we sell. So, again, deficits are necessary to satisfy the savings desire of the private sector.
You keep repeating this slogan. But you don't have any facts to prove it. You are just seeking an excuse to justify chronic deficits. Where are the facts to show that no country ever balanced its budget without also losing all its private savings?
Currency issuing govts are not like households or businesses. They create the money they need, ex nihilo. They can never run out, they can always pay bills due in their own currency.
Of course they can run up inflation 1000% per year (or per week), like Germany in the 1920s. This is not how the U.S. is paying its bills. There are some manipulations to modify the money in circulation by small measures, but this only makes sense to stabilize the inflation rate, or maybe push interest rates up or down 1/10 of a point -- but not to pay bills such as for funding defense or welfare etc.
No matter how large ten gazillions, whatever. It's just a number.
You're not getting this from any responsible source on economics. No economist is saying the gov't can run up bills tens of gazillions or trillions or billions and it doesn't matter because the gov't can simply create the money they need ex nihilo.
The US cannot be forced to default, not by foreign powers, not by the bond markets.
There are ways the US could default. It will not simply "create the money they need, ex nihilo" to pay it. That might be worse than default.
The quotes (or misquotes) in your "show" text are being misused by you. None of those persons proposed that the US might ever resort to 1000% inflation to pay its bills. Just because it's technically possible doesn't mean it's a practical possibility. Default is more practical, or the lesser evil, than massive inflation.
"The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default." Alan Greenspan
“In the case of United States, default is absolutely impossible. All U.S. government debt is denominated in U.S. dollar assets.” Peter Zeihan, Vice President of Analysis for STRATFOR
“In the case of governments boasting monetary sovereignty and debt denominated in its own currency, like the United States (but also Japan and the UK), it is technically impossible to fall into debt default.” Erwan Mahe, European asset allocation and options strategies adviser
“There is never a risk of default for a sovereign nation that issues its own free-floating currency and where its debts are denominated in that currency.” Mike Norman, Chief Economist for John Thomas Financial
“There is no inherent limit on federal expenses and therefore on federal spending…When the U.S. government decides to spend fiat money, it adds to its banking reserve system and when it taxes or borrows (issues Treasury securities) it drains reserves from its banking system. These reserve operations are done solely to maintain the target Federal Funds rate.” Monty Agarwal , managing partner and chief investment officer of MA Managed Futures Fund
"As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational." Federal Reserve Bank of St. Louis
“A sovereign government can always make payments as they come due by crediting bank accounts — something recognized by Chairman Ben Bernanke when he said the Fed spends by marking up the size of the reserve accounts of banks.” L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City and a Senior Scholar at the Levy Economics Institute
If you want to critique the money system, you need to understand it. And you don't.
Do you understand it? or only pretend to?
How about making a small step toward establishing your credibility on the above by citing for us the published sources for the "show" quotes. They sound like talking points from a Sri Quackananda sermon. Or taken out of context. It's difficult to imagine a Federal Reserve Chairman saying seriously that the US can just print money to pay its bills.
