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They'll Never Pay Down the National Debtodysee.com/@mises:1/they%27ll-never-pay-down-the-national-debt:c?r=8T2xqWjtafHWYGxQBSsrbw1wQPm7sWRq
284 sats \ 15 comments \ @Undisciplined 23 Feb 2024 econ
Ryan McMaken and Tho Bishop talk with Jane Johnson about why the feds will never pay down the debt. Instead, they have two choices: rampant inflation or default.
This is a follow up to an article by Jane Johnson that I posted recently. In this video, they extend the conversation to what paying down the debt would actually look like, if it were attempted. That exercise underscores just how impossible this would be politically.
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63 sats \ 1 reply \ @kytt 23 Feb 2024
Of course they can't pay it back. At a basic level, this is how our monetary system works:
I'm the Fed. To begin this new economy, I lend you (create) $100 on the expectation that you pay it back with 5% interest. So you owe me $105. Where are you going to get the extra $5 if only $100 exists?
You can't. You're going to have to borrow it.
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100 sats \ 0 replies \ @Undisciplined OP 23 Feb 2024
That ignores money velocity. You don't have to find 105 unique currency units. Payment 1 can be 60, then after doing some work and getting paid you make another payment of 55. It doesn't matter at all that you reused some of the currency units.
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63 sats \ 4 replies \ @grayruby 23 Feb 2024
They just need to wait for bitcoin to hit 150M and then they can sell and wipe out the debt. Of course by that time the debt will be 300T instead of 30T.
I won't be doing 150 push ups a day until 150M
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50 sats \ 3 replies \ @Undisciplined OP 23 Feb 2024
I predict the debt hits 300T long before bitcoin hits 150M.
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30 sats \ 2 replies \ @grayruby 23 Feb 2024
Wow Bitcoin hits a little resistance at 52k and people get all bearish. Once we get past 52k it's straight to 150M. Some "influencer" on youtube told me that. Must be true.
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50 sats \ 1 reply \ @Undisciplined OP 23 Feb 2024
It's clear as day on this technical analysis chart:
https://m.stacker.news/17237
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30 sats \ 0 replies \ @grayruby 23 Feb 2024 freebie
Absolutely. Just have to check your flags, cups and handles, candles and then travel back in time around 850 years to check with an italian mathematician if you got your lines correct.
Totally reasonable strategy.
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30 sats \ 1 reply \ @0xbitcoiner 23 Feb 2024
There was a Prime Minister in Portugal who said: "Debt is not to be paid, it is to be managed." He was in pre-trial detention and awaits trial. I even understand what he meant, the unusual thing is that he is accused of 31 crimes, including passive corruption of a public official, money laundering, forgery of documents and qualified tax fraud.
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32 sats \ 0 replies \ @Undisciplined OP 23 Feb 2024
Truth is treason in an empire of lives
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30 sats \ 5 replies \ @siggy47 23 Feb 2024
We'll, if they inflate enough they can pay it back in nominal terms, right?
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350 sats \ 1 reply \ @freetx 23 Feb 2024
you joke, but in theory the Treasury could just print its own money and pay off the debt with that. (I mean that is sorta its primary job)
Its an interesting conundrum - that not many publicly talk about....but has the balance of power shifted between Govt and Federal Reserve?
Meaning that Congress has so forced the Fed to be complicit in its horrible fiscal policy, that its resulted in putting the Fed in a position where it may get rug pulled simply because its become mathematically impossible to pay back the debt.
Any attempts the Fed now makes to reduce fiscal insanity (by raising rates) only exasperates the problem....instead of high interest making gov borrow less, it makes them borrow more to service the high interest debt payment....
The old adage of "if you owe the bank a million bucks the bank owns you, but if you owe the bank a billion bucks, you own the bank" comes to mind.
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20 sats \ 0 replies \ @Undisciplined OP 23 Feb 2024
I heard that adage initially as "If you owe the bank $10,000, that's your problem. If you owe the bank $10,000,000, that's the bank's problem."
Aside from the phrasing difference, it's interesting to watch inflation update our adages.
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40 sats \ 2 replies \ @Undisciplined OP 23 Feb 2024
Yes, but "enough" is a catastrophic amount of inflation. Jane Johnson didn't get into the details in this video or in the article, but she brought up that she had started penciling out how much inflation would be required.
The takeaway is that regardless of the approach, this is a preposterous amount of debt with no feasible prospect of repayment.
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30 sats \ 1 reply \ @siggy47 23 Feb 2024
No doubt. I was half kidding, but I'm sure it has occurred to a few policy makers.
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120 sats \ 0 replies \ @Undisciplined OP 23 Feb 2024
I think the strategy will just be to attempt to "manage" debt service, until we hit some breaking point.
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