Quote:
Originally Posted by The Horror
Like I said, national debt is relative. There isn't really a general sweet spot. Japan's is more than twice their GDP and they're fine. Singapore is another highly capitalist country with more debt:GDP than the US and they're fine.
Of course what matter is the reasons for debt. Debt that increases consumer spending power is good debt. Debt to fight endless wars, on the other hand, don't create anything in return, and so forth. But increasing the debt to save billions on healthcare or student debt interest or reboot infrastructure is a more of a blip on the radar than it's made out to be.
Japan actual "real" national public debt is much much LESS than more than twice it's GDP.
There are accounting "problems", similar to the US with the significant difference between "federal debt" and "federal debt held by the public" except the gap is a lot bigger in Japan.
Government and pseudo-government institutions own a lot of japan debt themselves.
54% of japanese debt alone is held by the BoJ lol. 5% by public pension funds
https://www.statista.com/statistics/...pe-of-holders/
That means that out of the approx 260% of gdp of debt, the actual debt (money not owed to themselves) is like 90% of GDP. They literally have 170% of gdp that the government owes to the central bank (that it fully owns) and public pension funds (that it owns).
Meanwhile the USA doesn't book all future social security payments as PRESENT debt, does it?
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Now as for the "blip of the radar", lol. It's not only about "well actually increasing debt a little won't matter too much" (because that's fairly true), it's about generalizing that and claiming that among *all possible uses of that money* the one you chose is *better than everythign else*, because otherwise we can literally justify any expense (including war, which is mainly income of american companies and american individuals remember).
So when you cancel debt you have to claim that there is nothing else even better you could have done with that money, otherwise you are in the same boar as the warmongering or simply anyone wanting their pet project funded. You sure 100 bln toward students is better than toward research? or infrastructure? why? you sure you can fund all? infrastructure is crumbling badly, and there is actual inflation meaning every choice crowds out another choice in *real resources* sense. You don't have enough skilled people to do everything you would want to do. You have to accept tradeoffs.