I Still Believe The National Debt is a Big Problem

The Book’s Arguments

Essentially, the book argues that government debt is unconditionally sustainable in currency issuer nations. The criteria it lays out for this is r<g, meaning that the debt is sustainable if its real interest rate is lower than the growth rate of the economy. I accept that premise, but qualify that it fails to include current deficit spending, which is part of the real world.

Interest Rate Control

The central banks, it is argued, have complete control over the interest rates, r, and thus, can always keep the debt sustainable. The book argues that central banks in currency issuer nations have:

Interchangeability of Different Colors Dollars

The book refers to Treasuries as yellow dollars and ordinary dollars as green dollars. It makes several claims to the effect of

Softer Arguments

There is also a tonal disconnect that I have with this book.



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