No idea what you talking about .
When you borrow 100$ , the banks “creates” 100$ of new money .
That is one of the way money supply go up .
It do not already exist .

Now if the government borrow 1 billions dollars , and next year with interest it owes 1.1 billions.
Government can just borrow again that 100 millions (interest) to pay down the interest .
By doing that it still creates “new money” .

+1

?
You said it yourself.
We are in debt monetary system …

So actually does if they don’t have the money to pay it.
Government pay too high interest by printing more money (through borrowing) and individual like u and me just go bankrupt since we dont have a “printing press” (the fed) when we can’t afford the interest on our debt .

Some case study referenced on Wikipedia shows that this is not the case. The banks almost always if not always loaned out money that they had, none of it was created

Where is the link ?
Bank don’t loan out deposits.
Banks uses the cash they have as collateral .
More cash a bank have , more loans they can create .


https://www.investopedia.com/article...central%20bank.
https://www.investopedia.com/article...make-loans.asp

no it creates new money, in the commercial bank system.

the deposit that gets accrued to your account is extra, new money that didn't exist previously. that's literally what fraction reserve banking is about.

other form of lending don't create money but commercial bank lending does.

National debts don't really matter.

Banks need governments to be funded. Countries need each other for global security. There's always a bailout somewhere if the rubber were to hit the road. Eliminating debt or even lowering the debt shouldn't ever really be a concern. You just don't want your debt rising faster than the money supply increases faster than others' debts are rising, as I understand it. Does that make sense?

(I'm not an economist, but I've had a minor's worth of econ training.)

if they didn't matter it would still be about "who gets the freeroll" of increasing from where you are till it matters, think about it.

It might be the case that up to 120% of gdp (say, hypothetical), debt doesn't matter, and you are at 60%, who gets to spend the insane amount to reach 120 and live better than usual ? that would still be a "treasure" to spend either all today, or through the generations right?

If you lower the debt someone later can get into debt again and live better than he could otherwise no?

And of course debt does matter "at some point" , otherwise you can get everything to everyone for free just going into infinite national debt right? given that's not the case, there are some actual limits somewhere, which means you have to decide who gets the bounty and who payes the receipts for it.

Boomers decided they should get everything and everyone else after them should pay for it. Others might disagree.

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?

///

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.

The lingo is the problem ... reserves aren't given, money isn't given on a loan, all was created.

When you take out a loan, you're taking out your own personal printing press, capable of printing the amount of the loan, that the bank created for you, at a fee of current rates for the loan.

It's the central banks job to determine what these presses should cost and how many presses the banks can make.

for bank loans yes

I think you’re just taking the words too literally. You’re correct that the debt will be paid by members of a future generation to members of that same future generation, but that doesn’t really address the point that critics are making.

The point is that there are members of a future generation who are going to have to participate in paying back debt that is being incurred today. The fact that there are other members of that same future generation receiving debt payments doesn’t change that.

If I have my taxes raised because of decisions my grandparents made, I probably don’t care that a few of my high school classmates are receiving payments from my tax dollars.

check the bold again, are you sure? interest will be paid on the debt in 2045, do you think working people in 2045 will be paying it to working people? or to people on average far older than them?

It's current people benefiting, the rich of today financing that, and future workers paying the older rich of today one generation down the line for that.

You btw are paying payroll taxes your grandparents didn't pay in the same amount, to pay for their healthcare and pension

Spaghetto



Anyone alive today who started paying taxes before 1987 is stealing you money