Next time it might be constructive to give some feedback outside the first sentence of my article
When a false assumption in the first line makes anything after that moot there is little use in breaking it down further.
There is certainly a burden that debts bring, as debts must be paid. This can be done by printing new money, however this has significant effects on inflation, especially when debt is very high. The future burden then is caused by a decrease in the value of currency. This strategy has its limits, which we are seeing today.
Why would a government that can create as much money as it needs ever need to borrow its own currency back?? What would give its previous spending (excess reserves) any more or less value than current spending to make one more desirable?
Monetary inflation, across the board inflation caused by the total quantity of money in circulation, is not possible with a fiat currency. If government spending creates a resource or labor shortage those will increase in price individually, but the spending will not cause other commodities or labor markets to also increase in price until employment is at 100% and all resources are being utilized, a condition we haven’t seen since WWII.
The quantity of money theories are rooted in the gold standard, but even those were false prior to reaching a quantity of money in excess of the gold reserve in circulation. Japan has been trying to weaken its currency for decades to make its manufacturing sector more competitive. Its “debt” to GDP is now more than twice that of the US and it is still not able to hit inflation targets. Past spending has no relationship to a sovereign currency-issuing government’s ability to spend in the future.
We no longer “print” money. Accounts at the Fed are marked up via keystrokes, but I get your meaning, and reject it. Given that Treasury bonds require existing money to purchase and all (net) money in the system is the result of the government spending in excess of its revenue it is more accurate to say that deficit spending “funds” bond sales than the opposite. Borrowing and taxation should never be considered “funding” operations for the government, but only serve to draw down total reserves.
One simply cannot collect or borrow what doesn’t yet exist. The word “debt” triggers most people who project their household budget logic onto the currency-issuing government, but it is in reference to the “tax credits” (or gold when we did that nonsense) it owes to holders of its currency, not a mortgage on future productivity. It is past productivity that is unspent in the economy and not used to satisfy a federal tax obligation. It is an accurate accounting of the nation’s net (after factoring for private sector bank debt) financial assets since our founding. It is our national savings.
Money (units of measure to denominate commerce and contracts) and the debt that money represents cannot be held in the same sector without both being reduced to zero. For every dollar created by Congress still in circulation, Treasury (government) holds the debt and the Fed (private sector) holds the dollars. Likewise, the debt cannot be an obligation of the private sector or it would balance all the money to zero. Sans a gold reserve to defend, it is only a mostly irrelevant number that informs Congress of the total net money supply and allows error checking.
Treasury debt /bonds allow the Fed to manipulate interest rates upward and serve to stabilize the economy by satisfying the desire of the people to save, but never actually funds anything. We could have easily done away with bonds when we left the gold standard, but paying interest is no harder than creating money for any other purpose, so it’s moot. Until you can accurately describe what you are concerned over any points you make will be in error and only serve to confuse.
