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Comment by JDiculous | Hacker News Reader

Government debt denominated in one's own currency is not really a serious issue because governments can print their own currency to pay it off. Yes this can result in inflation, but the inflationary effects are vastly overstated. Most of the inflation happens at the point of spending.

I recommend reading up on Modern Monetary Theory (MMT)

http://neweconomicperspectives.org/2014/01/diagrams-dollars-...

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MMT says that printing money has no effect if you give it to certain people. I’ve yet to hear of a real-world example where a major economy doubles or triples their monetary supply with no negative effect, which is what MMT will have you believe (“don’t give it to the banks - give it to poor people in Idaho!”).

If it sounds too good to be true then it is.

The US M1 Money Supply has tripled since 2000 according to the St. Louis Fed: https://fred.stlouisfed.org/series/M1SL

There have not been issues with high inflation.

The problem is that once the debt is repaid you have to provide something in exchange for that money. If it's good and services, fine, we can produce a lot of these. But if that's land and factories, the country will be owned by foreign investors pretty soon.

Not sure if it's a good thing.

MMT is economics for morons

What is the less moronic theory that I should read up on instead?

The Fed increased the monetary base by 5x during the Great Recession. Where's the hyperinflation?

Is it really not serious? Is there a possible chance that countries that we get our debt resolved from can just start buying US land and US businesses? Isn't there a reason more and more US companies are re-incorporating in the bahamas or other locations? The net effect of the last 20 years of economic policy will likely be felt... suddenly - when a decision is made by the new owner.

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