tag:blogger.com,1999:blog-2277215496195926573.post2967887588687940480..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: National debt is not deferred tax. Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2277215496195926573.post-86137040104286219302016-10-26T03:02:31.187-07:002016-10-26T03:02:31.187-07:00'They' will steal from you in one way or a...'They' will steal from you in one way or another...! :-) Also agreed.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-21220915289936414122013-12-22T14:56:38.448-08:002013-12-22T14:56:38.448-08:00Yes, Auburn makes a good point about the word debt...Yes, Auburn makes a good point about the word debt. Logic doesn’t count for much compared to using the right words and having the sexier sound-bites than the opposition.<br /><br />Re your last paragraph, MMTers have always recognised that the debt (aka “private sector net financial assets”) may at some point exceed private sector savings desires i.e. the amount of those assets that the private sector wants to hold. And in that case demand would tend to become excessive, which in turn would call for raising taxes and unprinting the money collected. And as you rightly say, raising taxes (or cutting public spending) can be politically tricky. I.e. REVERSABILITY is a potential problem with fiscal policy. However, the real value of the debt shrinks at the rate of inflation each year, so there’s a certain amount of “reverse” automatically built into the system, which is handy if one wants to regulate the economy via the sort of mix of fiscal and monetary policy favoured by MMTers (rather than relying just on interest rate adjustments, which is what Scott Sumner and others favour). <br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-58424374310439357632013-12-22T14:32:35.285-08:002013-12-22T14:32:35.285-08:00John Redwood said pretty much the same thing recen...John Redwood said pretty much the same thing recently too. lat time I looked he'd let one of my comments through but not the other.<br /><br />I'm not too keen on the idea that we should argue that National Debts can be repaid by inflation. The neo-liberals accuse Keynsians of wanting precisely that.<br /><br />As Auburn suggests "debt' isn't a good word. It suggests that countries like the USA and the UK haven't paid for goods imported from China for example. If that had happened they would want to send us any more stuff! They are happy sending it to us and we are happy to pay for in $ and £ which they are, in turn, happy to keep on account in Central Banks.<br /><br />The problem for the economies of the UK and the USA , may, one day in the future, be the accumulation of assets rather than the debt itself. That should be tackled , not by inflation, IMO , but by the imposition of taxes. The political and economic need for which need to be justified and explained.<br /><br />PeterMhttps://www.blogger.com/profile/02052432715870196512noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-33471168015441585052013-12-22T07:11:55.768-08:002013-12-22T07:11:55.768-08:00Ralph, might I suggest you use the phrase "fu...Ralph, might I suggest you use the phrase "fund their expenditures by issuing T-bonds" instead of using the inapplicable neo-liberal term "borrowing". No reason for us to ever mention the words "borrowing" and "debt" when referring to the mechanisms by which a sovereign Govt creates and spends "money" or financial assets. Have a good holiday Ralph, and keep up the good work.Anonymoushttps://www.blogger.com/profile/15433129947896088098noreply@blogger.com