Trump's desire to reduce the deficit. Can someone explain to me how this is a good thing?

Deficit spending does not "pull money from other parts of the economy". Taxes do not pay for deficit spending, period. I've already shown that all spending is paid for with bond sales which are simply "rolled over".

Here is a US Treasury statement. Look under "Issues". See where it says $95,648,584? Now look under "Redemptions", see where it says $94,225,757. See how issues exceed redemptions by about $1.2 trillion?

Cool huh?

Think of it like Monopoly. When you pass Go and collect $200, that money doesn't come from other players. it comes from the "bank". The bank in this case is the government and it creates money when it deficit spends.

First, the Fed controls rates and it raises them based on policy goals. The Fed targets inflation and it's raising money out of fear of inflation, which frankly I find totally unfounded because I think economic indicators show that the economy is slumping. I think we're already in another recession or will be by the end of this year. You heard it here first.

What is it you think we have to address? If you think you can bring manufacturing back here, you are deluded. If you support a free market, then you need to embrace the idea that we have been outcompeted for those jobs, that is, unless you think we should lower working standards, throw out child labor laws, let companies pay workers whatever they want, take away all benefits and allow companies to destroy our environment. Then, maybe, perhaps we'll be able to compete globally for manufacturing jobs.

Having said that, the trade deficit has real benefits if our Congress would create and spend the US dollars the world decides to hold (minus the export dollars US companies bring back in the country) back into the economy. The cumulative amount has reached about $10 trillion dollars.

Why do you think the US financial sector has grown from 11% of the economy to about 26% today? This is why banks are so powerful because, as a nation, we've been taught fear government so we refuse to let the government spend and the banking system increases its power. The greatest lie ever told was to make people believe that the US government borrows its money from private banks.




Look at government debt as a % of GDP. Now, look at private debt as a percent of GDP.

Our nation has been sold a bill of goods and it's not delivering. Instead of waking up, we're doubling down...making it worse.

Before I'm accused of believing that government solves all problems, I'm not saying that. An educated population controls government and solves its own problems using the tools available to it, but only once the population clearly understands the problem.

 

To anyone who thinks I'm full of crap. Who thinks debt is the problem.

Tell me, when will the government "run out of money".

Tell me exactly and tell me how you calculate it. Don't say "were almost there", or "It's so obvious dude!" That's not enough....Tell me exactly when the government will run out of money.

Conversely, tell me, if $20 trillion dollars is too much debt, tell me how much debt is the right amount. Again, no guessing, tell me exactly what the debt level should be at and why you think it should be there.

 

Do you have any idea how interest rates are set?

Rates have NOTHING to do with the debt. There will never, ever be the storm you predict, I'll tell you why when you answer my question.

 

I should be more grateful for the participation I've received in this thread. Thank you, everyone, for joining the conversation.

Ok, to your claim....

Question....

Do you have any idea who earns the interest paid on the debt?

As a percentage of GDP, do you know what we pay in interest on the debt?

Here, I'll save you the time....



Check it out....

Interest paid is FALLING not rising. The amount is the same, again relative to GDP as it was in 1945, 1974, and today. In the Mid 1990's it was more than 100% more and we made it.

Now tell me, of the $400-$500 billion dollars the nation pays in interest, who earns it as income?

Also, I've already pointed out that interest isn't paid with tax dollars, so you are mistaken. There is no choice between building schools etc and paying interest on the debt.

 

It's not a question of a little or a lot, it's a question of constraints on money creation and understanding when a little, when a lot or when none at all. There could be times when any level of deficit is bad. it just so happens that we exist in an economy where we can create more debt because we have fallen well below the level of debt that constrains us.

Now I asked a question in another response about what people believe the level of debt should be and I don't want to spoil it by explaining the real constraints just yet. I'll give it a day or so and revisit this issue in a new reply. If I forget, remind me and I will respond.

-Cheers

 

Awesome thread everyone, keep it up!!

 

Yes, because interest rates are at record lows, and we pushed other countries to liberalize their currencies.

1 out of every 100 units of production in the entire country being seized and basically burned for no reason isn't exactly ideal.

Government doesn't have a revenue problem, it has a spending problem.

 

And yet you failed to answer a reasonably simple question.....

Who earns the interest paid on US Treasuries (which are the measure of the debt)?

 

True Korea.

https://en.wikipedia.org/wiki/Kim_Jong-un

It's all like... connected, man.

 

Was that an attempt at levity? I guess I missed the joke.

 

Yes it does. Period. There is no magic money pot. Everything costs. Everything is paid for. Your magical thinking is so much silliness.

Yes, and those bonds are sold for a price. And that price is money that were it not given to the Federal government, would be available to other sectors of the economy.

If not redeemed, and money is paid, in the form of interest to the bond holder who chooses to rent his money to the Federal government. We have had a doubling of debt while interest rates have dipped far below their long term price. Interest rates will revert to mean and the debt payments will most certainly crowd out other discretionary spending.

Yeah right. We can just print it! Humans have been coining money for 5,000 years, and the current crop of clowns thinks they are the first ones who ever thought "let's print a bunch of it!"

Sure, and if the Government creates more "hours" in a day, I'll have more time! All they have to do is decide that instead of a 24 hour day, while, we will pass a law that segments the day/night cycle into 25 hours rather than just 24 and we will all have an extra hour! K-L-E-V-I-R!

The Fed doesn't even control Federal Funds rate. It does control the rate at which it itself is willing to lend money. And there's also Open Market Operations. Both of which influence interest rates, but they do not control them. Because the Fed only controls their own lending rate, which gives them good influence upon short term rates, but the longer term the rate is for, then the less and less influence the Fed has.

For example: The solid blue line is the Fed funds target for the period covered; the asterisks are the effective Fed funds rate for each day; but that is only a weighted average of all Fed funds transactions for the day, the dispersion of which is shown by the vertical black lines. And this is when the Fed is doing a good job of hitting its target.

The Federal Funds rate is the rate at which the banks lend to each other in order to be able to meet their reserve requirements. In this it's very like the overnight Libor in sterling in London. But the point is, that it's the rate the banks lend to each other: not the rate at which the Fed does anything. And what the Fed is doing is using those Open Market Operations to try and influence it during the day and or week. Which it usually does very well, but do note those huge variances there.

So, the Fed simply does not "control" interest rates. They are market determined. The Fed influences, but does not determine. Only a fool starts any economic or public policy by the statement "the Fed should lower (or raise) interest rates". They can't. Within certain limits they can indeed influence them but there are those limits.

It is, its been on life support since the 2008 crash struggling to overcome the forces of deflation, currently, in my opinion, in a false dawn.

Not hardly, many have been predicting the entire time that ZIRP and QE would not work. And the massive wealth transfer that has occurred from the aged, who have lost a good trillion or so, or capitulated into the market chasing yields while P/E's are at nosebleed levels.

Sometime for fun, check out the relationship between age and wealth accumulation. Nearly every chart that screams about this or that could just as easily produce the same distribution normalizing for age. After a lifetime of work, most Americans have accumulated more assets, but what they cannot do, is go out and accumulate them again. So when they are not earning the interest they planned on, everyone is in capital preservation, struggling not to spend so they don't outlive their money. Our pension funds are massively underfunded or venturing into far too great of risk in search of returns. Rates have to go back up, and the chance that they will be able to pull this off without toppling the whole thing, well, I'm not betting on it. By the early 20's we should be on the far side of what's coming and rebuilding our economy on a sound floor of real productivity growth.

We'll see.

We'll see.

Blithering nonsense.

Hysterical hyperbole.

Clearly you are not in the trades. Google "hiring bonus for tradesmen". Here, I'll do it for you.

https://www.google.com/webhp?source...q=Hiring+bonuses+for+construction+tradesmen&*

Do not doubt it. I live it. We live in a nation with its infrastructure crumbling and finding 20-30 year olds with strong backs and basic mechanical skills, when our schools have curtained high-school shop classes for for twenty five years? $80,000/yr by the end of the first year and do you know how many plumbers, HVAC and skilled construction workers are pulling down over a hundred thousand a year? Look around your social circle, what percentage of them drive pickups? Set a goal this year, work to expand them into your social world and listen when they talk about their lives. Do this, and the rest of the year will be a marvelous journey for you, as you meet your fellow countrymen. They are well worth knowing.

More frantic horse ****. We are so careful in this nation with our environment, that a construction service company won't even wash their fleet on their own asphalt parking lot without directing the run off into a clarifier that separates road grime from the water run off, before the water run off goes into the drainage system, which of course at some point ends up in our waterways, why? Because if we all don't take good care, we live in a **** pile, and we don't do that. All waste oil and solvents mush be properly stored, with secondary containment, and transported and disposed of by a certified waste hauler. Why? Because we take pride in what we do, and we take pride in doing well. Meanwhile the globalist clowns happily assure us that we would be way better off importing all these goods from other countries, where you know what they do with the half empty barrel of solvent they no longer need in India? They dump it off the dock and pour it out on the parking lot. Have you been to the Far East lately? Holy crap. Don't breathe the air and for damn sure, don't eat the fish. When you see Pacific Salmon and you are thinking "Oh, probably from off the coast of Seattle" better check, because if its Eastern Pacific, and off the coast of China, I wouldn't eat it. So you think about that when you stand up and pretend you have done something valuable for the environment by driving our jobs out other nations that treat every river like its a sewage line. All you have done is taking jobs from us, who treat the environment with respect and replaced them with the dirties pigs that ever walked the face of the earth. China is filthy dirty, we really should do as little business as possible with them, unless and until, they start working one some decent environmental policies. You really should think about the effective result of some of these positions you take. You state them with a great deal of condescension, but really they are rather dumb as hell.

We compete fine, and quite frankly, we are so blessed with resources, that we really don't need to approach international trade with an air of desperation. We need one on one agreements where we mutually benefit, and where we don't, we probably really don't need the trade.

You are probably talking about the petrodollar pump that has been in place for the past 50 years, Saudi Arabia was the cornerstone of that system that has been in place for about 50 years and worked rather well for about 30 years. That's coming to an end with the breakdown of US/Saudi relations and the rise of our domestic energy industry. If your long range macroeconomic outlook includes the Petro Dollar Economy, well, I'd give some serious consideration to rethinking that.

I certainly agree with that.

All we need is a free will people, pursuing their own dreams and respecting the property rights of others. The role of the government is only to step in and regulate when one person's pursuit of their dreams and desires bumps up against another doing the same. We don't need a insulated group of master planners substituting their dreams and insisting we all follow theirs. Now, if you can talk someone into following our dream, that's fine, but when you resort to force, you have crossed a line, and just because someone hung a tag on you labeled "government" doesn't make it any less of a trespass.

 

I agree with Trump's move this time,
I think the nation already bleed so much that it's not even improving the economic status.

 

Bonds are an anachronism, a holdover from a time when the US dollar was backed by gold. Today the US dollar and bonds are Both liabilities of the US government and assets to the US private sector.

There is nothing"magical" about being able to create your own currency.

We can talk more about this in a follow-up post. This response is already going to be really long.

People that purchase Treasuries (TSY's) do so because they wish to save in the safest investment in the world. If bonds weren't available dollar holders would save in some other vehicle. Some might even save in foreign bonds. Either way, savings is a drain. It effectively removes money from circulation.

And no, savings does not increase loanable funds or affect interest rates.

Yes, the government can create it (printing is anachronistic, most money isn't printed). However, there are constraints on money creation. Do you know what they are?

Yes, strictly speaking, that is 100% right. The Fed manipulates rates. However, since 2008 with the advent of QE, the Fed has added trillions in excess reserves. Since it has traditionally manipulated excess reserves via OMO in order to manipulate rates it had to find a new way to set the interest rate floor. Today, as I'm sure you are aware, the Fed uses the IOER (Interest on Excess Reserves) as a way to create a rate floor. The Fed has been selling off billions in assets it acquired as part of QE programs and will probably return to the old method between 2018-2023, but lots can happen between now and then.

Sure, there are variations in rates, I acknowledge that. It's a sign of a healthy economy that the rates vary somewhat from the Feds target rate. There are other market variables that banks take into account that I believe account for fluctuations. However, if rates begin to rise it is because there is a demand for reserves at a particular price. The Fed does not control the price of reserves, but it can manipulate the supply if it wants to see lower rates. Indeed, QE, for all of its failure as a policy has proven the Fed can drive rates down via manipulation if it so chooses.

Well, I can't argue vagaries on what the Fed is or isn't capable of, however, I will agree that the Fed's QE program failed. It failed because the Fed believe in Freidman's "Loanable Funds Theory". That is, increasing the level of reserves will increase lending. QE has proven LFT is categorically wrong because increasing reserves does not increase a bank's ability or desire to make a loan, it only changes the price at which loans are made.

Returns are relative to inflation. Rates have been low, but so has inflation. The real problem would be low rates and high inflation, which we aren't seeing.

I don't mind the speculation on what you believe I have or have not experienced, but I'd appreciate it if you'd put your assertions about what you think I know into the form of a question.

Now having said that, I'm not really how your response to my statements regarding our nation's inability to compete on a global stage in manufacturing has anything to do with what I said.

Oh, and for the record, I am close with people in the trades.

Again, you seem to have misunderstood (or I wasn't careful in my wording), but I didn't mean to imply that the US isn't careful with the environment as a nation. What I was saying is that other nations, like China, are not. Taking care of the environment, workers, children costs money making it difficult to compete for jobs in other nations that lower costs by sacrificing those things.

I totally agree we do fine with resources. We also do ok with labor. The problem is that we are afraid to spend dollars.

It makes little difference what oil is priced in, US dollars or paperclips. All that matters is your nation's rate of exchange into whatever the currency is that's needed to purchase the oil you need. China now buys oil from Russia in Yuan. Good for China. It can do this because it's economy is massive and stable.

The only reason the world deals in Dollars and Pounds before it is because the US economy represents the world's most stable economy AND there is a MASSIVE supply of US dollars in the global market making it easy for nations to attract dollars to buy the oil they need in a single currency against which other currencies are weighted.

The only real advantage for US buyers is they save the small relative costs of having to trade into and out of a foreign currency to buy oil.

Nice to find points of agreement. I'll take it.

Ok, so that sounds very libertarian to me, yes?

The problem with that idea is that what is good for the individual isn't always good for the group. There are lots of social experiments that prove this. When people are allowed to pursue their interests in the context of a group without fear of reprisal or punishment from other members of the group, it quickly becomes a race to the bottom, which is ok in a vacuum. The problem is, we don't live in a vacuum. We live in a world of competing interests and when everyone in a group pursues their own interests, it's detrimental to the group.

Russia is probably the best modern day example. While Communism has it's own problems, China has proven that you can operate under that moniker and be reasonably successful, though I don't want to argue the specifics of China's success, not the least of which is it's 1.4 billion people. But Russia is a nation of 143 million people and a country rich in natural resources yet it has a GDP around $1.2 trillion ($8.838 per capita). France on the other hand has 66 million people and 2 times the GDP (5 times the per capita). I will assert that Russia is now really just a State run Cleptocracy. Putin is one of the wealthiest, if not the Wealthiest man on the planet despite never having held a job in the private sector.

You can call it hyperbole, or crap, but Russia is an example of what happens when people operate in their own best interest and sacrifice the good of the group (despite the claim of "Communism"). Russia's only strength lies in the 7,800 warheads they own.

 

Rates are set by the ability of the fed to back stop the finance banks who have run up hundreds of trillions of dollars worth of interest rate swaps

 

The state ... every state ... does not only take money (taxes), but it also has obligations what it does with this money.
Each state has running costs for all its state organizations and these costs must be covered by revenue. The state also has its obligations to buy and build things, which are also financed with revenues. And last but not least, it has to use its financial resources so that it can serve the well-being of the country in a targeted manner... For example, improve the economy, reduce the number of unemployed and all the like. Not to be missed are also unpredictable things, which cost the state money ... for example, help after natural catastrophes such as Hurricanes, etc.

Is the money enough for this? Mostly not and then a state takes up loans ... which is ultimately regarded as a budget deficit (the government expenditure is higher than the government revenue). The fundamental questions are, however, how far can a state spend more than ingestion, and how long and when can a state do so?
A private person can also take a chalk if he has higher expenses than income, but we all know that we really need to live on the money we deserve ... and loans should be the exception. Also, our creditworthiness is limited. Is this also true for states? The answer to this is different for each expert. Some say that it is not comparable, but I realize that it is limited to verifiable.
Of course, a state has much more complex things to consider than a private person, even more complex tasks and duties, but even if you include all that, a state actually has to make money with its money, and only in the really justified case take loans.
Even if it seems unlikely for many, a country can lose its creditworthiness, and there are enough examples ... Greece and Argentine as the last among the more well-known and not unimportant states. Here, too much loan and too high deficit was over a long period of time, and the deficit led to a state slump at Argentine, and has only been prevented by others in the case of Greece until now due to EURO issue.
In how far the US could meet I leave open times, but I see as rather unlikely. But the last five presidents (and even more so, and the presidents before that too!) Have done their best to increase the probability!

One can also say quite simply:
If you as a state do not have the money for something, then leave it or save it elsewhere to have - point!

The US economy has to be boosted, among other things, to reduce unemployment. This can only be done with state aid ... means the state issues money and / or waives income (taxes) for it in core.
OK ... should you then also take up loans to pay for it or it is not more useful in other places to save ... is it for example necessary 10 aircraft carriers to have + more under construction, all cost billions USD in the Purchase costs and also a damn lot of money to hold them in daily service? Can you possibly munch at 2 or 3 aircraft carriers instead of many billions of new credits and deficits? Of course, one can say now that military defense is also a government task and one should not endanger the security ... and nobody asks that has a little brain in his head. The construction of new ships also creates new jobs or secures existing jobs ... at least temporarily until they are all finished.
Everything is correct and you can see that the thing is complicated, but every state has the duty to deal economically with the revenues ... but this obligation is unfortunately ignored.
And if I now start with the money wastes all over the world in every state ... when, for example, the new toilets of an office are ten times as expensive as the new toilets in "Ritz Carlton" or if the new computers at another office costs each three times as much as the same computer costs in the shopping mall 3 blocks away... Then there is a lot of savings potential to money for important things, instead taking new loans that will be still paid back our great-grandchildren with their taxes in hundred years!

 

"Put the wrenches away, the economy is organic!"

"The economy is not a class you can master in college. To think otherwise is the pretense of knowledge."

Good lines from rapping Hayek. I doubt that you can dismiss the Hayek arguments based on having fiat currency. Hayek was around yet after the gold standard was ended.

 

"The Fed's ability" is virtually unlimited.

 

So the gov can just borrow as much as it wants, till the end of time, and nothing can ruin the party?

 

You probably know Hayek better than I. Do you think that Hayek supported the idea that inflation is always a monetary phenomenon?

If yes, then I'd say I can dismiss Hayek (or Austrians who believe it) based on the fact that they have not updated their understanding in light of the change over to a fiat currency is it is no longer true. Saying that inflation is a monetary phenomenon is like saying that all crashes, car, plane or train is a phenomenon of velocity. While true at some level because you can't crash unless you're moving, this revelation does little to evaluate and judge the cause - effect relationship. Same goes for money and inflation. An idea (inflation is a monetary phenomenon) that the Austrians I have spoken too seem to believe.

As far as trying to master economics, all I'm doing is stating how our economy works. I've made no judgments about how it should or shouldn't work, rather I'm simply understanding people's understanding of it. That's not to say I don't have my own opinions it's just that when I support a position from a political point-of-view, ultimately the question arises "how are you going to pay for it?" So, I don't argue politics, rather economics.

 

First, let's break this into two separate ideas.

1) Can the government create as much money as it wants? -Yes

2) Are there any constraints on the creation of money by the US government? -Yes

Fact, That there is nothing that prevents the government from creating as much money as it wants (except self-imposed rules).

To your question, "[can] the gov can just borrow as much as it wants, till the end of time, and nothing can ruin the party?"

Two things.

1) The government doesn't "borrow" in order to have money. The government creates money and sells IOU's

2) No, the government cannot create as much as it wants till the end of time without "ruining the party".

Think about it like this.

There is a difference between what is possible and what is prudent.

So you need to understand that the government isn't limited in the creation of dollars in any literal sense since 1970. Before 1970 the government promised to back every dollar in circulation with a certain amount of gold. The government created a rule that said in order to spend $1 you have to create and sell a bond for $1. The spending added $1 to the economy and the bond sale removed it.

But today we aren't constrained by gold. Going off gold backing changed the constraint on money creation. I keep asking if anyone knows what it is and no one seems to know, which is, of course the real problem.

 

I don't know any of the intricacies of Hayek's theories or models. What I do understand of him is that he thought that know-it-all economists who thought they knew it all and could engineer the economy like a machine were conceited and bound to fail. His approach seems to have been bottom-up rather than top-down, which means allowing businesses to fail and not bailing them out, and not attempting to design an economic machine that would replace the organic, natural economy.

 

Yes, you are correct, however, I've been talking about the Federal government, not the state governments. Though I am to blame for not making that clear. Thanks for pointing that out.

The government issues money, the states use it.

Think about it like a game of Monopoly.

The bank creates money and can never run out (seriously it's in the rules). The bank is the issuer. The players must have money in order to conduct transactions. The players are the users.

First I need to make it clear that I'm talking about the US government as a sovereign money nation and by extension the nations of UK, Canada, Australia, and Japan. These nations are examples of nations that are issuers of their own currency and denominate their IOU's (promises, debt) in their own currency and do not borrow resources, commodities or the currency of other nations in order to issue IOU's (bonds etc) or have the nation's dollar. These nations can never, ever, ever be unable to pay their debts. Why? because their debts are denominated in a currency they can create. These are Sovereign money nations that allow their currencies to float freely against other nations currenciesThe US, UK, Australia, Canada, and Japan are examples of nations that are Issuers of their own currency and can never, ever, ever be unable to pay their debts. Why? because their debts are denominated in a currency they can create. These are Sovereign money nations that allow their currencies to float freely against other nations currencies

Second, you need to separate the idea of the value of the dollar of the nation in question the ability of a sovereign money nation to be capable of repayment of its obligations.

As far as Greece, this is an issue that comes up in every debate I have, so thank you for bringing it up so I can address it. Greece does not issue its own money. Like States in the US or players in Monopoly, Greece is a user of the Euro, not an issuer. That is why Greece can loose its credit rating because its debts are denominated in a currency it cannot create. It has no ability to conduct monetary policy.

So, does that mean that sovereign money nations can just create as much as they want without consequence? NO, NO, NO, NO....NO. There is a real constraint. People and governments can choose not to accept the dollars of a nation that abused its creation power and suffer terrible economic fate, but if a nation denominates its debt in its own dollars, regardless of how little that dollar will purchase in the real world, the nation can still, very easily repay it debt. In other words, let's say on Monday it took $1 million dollars to buy a loaf of bread. Now let's say the government on that same day owed $1 trillion dollars in government debt. If on Tuesday it took $10 million dollars to buy a loaf of bread, the government still owes $1 trillion dollars in debt. Hell, if it took $10 trillion dollars to buy a loaf of bread, the government still only owes $1 trillion in debt. See where I'm going with this? The cost of the debt does not change based on the value of the dollar its denominated in. And it wouldn't make any difference if the government owed $2 trillion on Tuesday. The government creates the money the debts are denominated in. Again, the 5 examples of sovereign money nations can do this. Other nations have different constraints that don't compare.

You seem to believe, as many do, that the government has to make choices about building Aircraft Carriers or funding Education. Now, there are times when this is true., but the key is understanding when it's true and when it isn't.

Something I'll address in a post shortly.

 

If a natural economy is one where people are free to make any choice they want, then I would simply say that when competing against an economy capable of imposing certain obligations to the group, the "free economy" will always loose. This is a phenomenon of human nature.

There was an experiment run where people were broken up into groups or teams and each person in the group was given real money. It was explained that they could use the money they were given to help their group to compete against the other groups. The more money each player gave, they better chance the team had to succeed. They were told they were free to donate as much or as little as they wanted and that whatever they didn't donate they could keep, like for real.

In the first round of the game, most players donate about 1/2 of what they have and keep the other half for themselves. In each subsequent round, players often see other players giving less (keeping more) and therefore feel less compelled to give the same amount. After about 6 rounds players are giving about 10% and pocketing the rest. In the 7th round, a new rule is introduced where players can spend some of their money to punish those that they feel aren't contributing. In the 7th round donations rise to about 60% of what players have and after 5 more rounds, donations are usually above 80%. Now if there were 4 groups and only 1 imposed the rule that players could use their money to punish "free-riding" teammates, I think you'd find that team would consistently be the winner.

Now if the winning group was able to impose certain rules on all the other groups based on their wants and desires, I ask you, who is free?

Freedom is not something you are gifted from nature or god. It is something you negotiate from those around you. Just like in the game you agree to give up some of your freedom in order to make your group stronger and prevent other groups from taking ALL of your freedom away.

 

So we could pay our debt, but only by destroying ourselves with hyperinflation. Doesn't sound like much of a solution. Another thing I've noticed is that debts and deficits are downplayed by comparing them to GDP, but if GDP shrinks, the debt won't shrink with it. The whole scheme seems to be dependent on the economy growing until the end of time and the US maintaining hegemony indefinitely as well.

 

I would like the OP to comment on this chart.