But the government doesn’t face the same constraints as the private sector (which is why it could bail out the private sector in 2008-2010). Once you recognize that U.S. assets are huge, that U.S. debts are also private wealth, and that the debt will, as always, just need to be serviced and never be zeroed out, then today’s debt shrinks into the manageable problem that it is and not a source of panic. (Paying down the national debt—in effect, deleveraging the government—would be disastrously deflationary; that’s a topic for another article.)He is wrong about zeroing out debt, we do it about once a generation This author has no history. In 1972, we zero out some liabilities, in 1932 we did it, and going back again and again, we zero out debt, this guy is clueless.
He gets inflation and deflation mixed up. When did we have inflation? After the Nixon shock, when we zero out a bunch of gold liabilities, Since then we have been getting disinflation, until now, with the except of medical and housing, we are in a outright deflation.
Nothing can service debt indefinitely at a positive interest rate, it is mathematically impossible. Debt result in interest payments, which result in a net infinite flow of cash from the economy to the currency banker, that is less money in the economy.
The claim is that Uncle Milt fouled everyone up on this as hr supposedly claimed that borrowing too much causes a price rise. Complete horseshit, borrowing too much causers a slight price distortion, then we get a down turn. The helicopter is necessary to maintain price stability.