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Comment by chmsky00 | Hacker News Reader

What’s great is fiscal debt is just a meme we talked ourselves into believing matters.

Economics of real property is one thing, but fiat economics can be ad hoc manipulated in whatever direction the politi-sphere needs.

Debt at this point is used to put economic uncertainty in the masses.

Cheney even said the quiet part out loud; “Deficits don’t matter.”

It’s impossible to prove a negative; all future people need to do is ask “What debt?” and legislate it away.

France did this once before. We don’t owe the dead.

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You're right we don't "owe the dead," we owe "current owners of U.S. Treasury bills."

> we owe "current owners of U.S. Treasury bills."

Two ways:

1. The brutish way: legislate that all T-bills are now worth 1/10th of their nominal value. Potential risk: riots and capitols set on fire. In practice, this was done in history many times without much consequences.

2. The "boil the frog" way: let inflation run hard for a decade, until a 100$ T-bill buys you a nothing but couple of big macs. This has been happening for the better part of a century.

Let’s not devolve into thought ending reactionaries. I’m aware of the negotiated reality.

My point is it’s not a law of physics, but a social contract to be negotiated.

We owed pensions to people and took those away, so it’s not as if society has a very good track record of paying what it’s owed, so don’t get too hung up on those words meaning something forever.

You might take continuous iteration of our social contract as seriously as code; as we can see letting it accrue technical debt and bit rot is not so great.

You are claiming that defaulting on sovereign debt would have no consequences?

> You are claiming that defaulting on sovereign debt would have no consequences?

First, at the sovereign level, it only has consequences if the lender has more guns than you.

Seconds, most "debt" in OECD countries is not owed to sovereign entities, but to the countries population themselves, who if push comes to shove will just have to accept that their bonds are worthless if it is ever legislated to be thus.

>> who if push comes to shove will just have to accept that their bonds are worthless if it is ever legislated to be thus.

Yea, the history of the world is full of populations just accepting their governments new policies to screw them over..

There are never any consequences to that, the people just shrug and say them the breaks and go about their day

<<sarcasm>>

> <<sarcasm>>

Which is why it is much better to achieve the same goal via inflation, where after a couple of decade a 100$ T-bill isn't worth a cheeseburger.

Of course a full stop of social norms today would have consequences.

My point is it’s a social contract not a law of physics we cannot hope to bend.

Our embedded memory and experience need not be the one we pass on.

No nation ever defaults on sovereign debt, not in the age of Fiat (aka fake) money..

They just create more of their fake err fiat money to cover the debt, sure it is worthless but they "paid it off"

See: the 1 Trillion Dollar Coin....

That isn't true. If a country makes a habit of printing too much money, then creditors will start to insist on only loaning it money denominated in other currencies. And once it starts doing that, the country can be forced to actually default on its debts:

https://www.forbes.com/sites/francescoppola/2017/11/14/venez...

Inflating or not paying creditors makes the currency worth less.

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