Re: Federal debt ceiling

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Libertarian666
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Re: Federal debt ceiling

Post by Libertarian666 » Sun Oct 01, 2017 3:50 pm

Simonjester wrote:
Xan wrote:
Maddy wrote:
I'm not taking a position here; simply asking for clarification of what yours is. I've simply recognized (as I thought everyone does) that by creating money out of thin air, the value of all remaining money is diluted. That's generally regarded as a problem for anybody who has saved or whose earning capacity can't keep pace with the rate of inflation. Is that proposition being challenged here?

So I'm still not sure what you're saying. That the national debt doesn't matter to the ordinary citizen because the system will collapse due to other structural problems (war, famine, plague, etc.) before the confiscatory consequences of burgeoning debt (either having to pay it back or having to inflate it away) ever take place?
I only mentioned "the system may collapse" in the context of "if it does collapse, it won't be because of debt". I'm drawing the distinction between my position and a hypothetical Pollyanna who says things will go on forever no matter what.

So no, I'm not saying the system will collapse before the consequences of debt come home to roost. I mean, I guess I sort of am, trivially. What I'm really saying is that I don't believe those consequences exist. The debt ITSELF is not itself a problem. The government overreach it represents may well be.
+1 if money gets created and the debt that accompany it are representative of an economic reality, services and goods that exist and for which points on the score board are needed to account for and to be a means of trading.. then the total number of points needed to represent it is irrelevant. war famine and plague and demographics would be a big rapid change to the relationship between the two.(points needed and economic reality)
the more subtle and insidious potential cause of collapses is government creating dollars to "fix" problems they themselves create by spending on programs that kill economic activity and the creation of services and goods, and then exacerbate by doubling down on those same programs with their "fixes"... and a good chunk of government spending does seem to do just that...
As the founders of the Austrian school of economics pointed out many years ago, so long as there is enough money to facilitate commerce, adding more money does not in itself improve overall well-being, even if it is real physical money that has other uses. In that case, uses for the physical substance will be aided (e.g., gold used in technology) but the addition of money as money has no benefit. In fact, the new money disturbs existing price relationships and therefore makes economic calculation less efficient. Fortunately, in the case of mined money such as gold, the new supply is almost never enough to cause serious problems with price relations, so this is not a large effect.

However, in the case where the new money is counterfeit (unbacked paper money), then there is no limit to how much can be created. In this case, the historical record shows that this power will inevitably be abused, resulting in serious and prolonged interference with price relationships and with economic activity. And this is true even if we assume that this enormous power will be used for good ends, which it almost never is.
boglerdude
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Re: Federal debt ceiling

Post by boglerdude » Sun Oct 01, 2017 7:49 pm

"so long as there is enough money to facilitate commerce"

How is this amount determined
Simonjester wrote:
i am not the topic expert by any stretch, but i believe it is largely determined on the bank created debt side of the equation.
the confounding factor is government created debt/spending.. (students of MR please correct me if i have that wrong)
Libertarian666
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Re: Federal debt ceiling

Post by Libertarian666 » Sun Oct 01, 2017 8:15 pm

boglerdude wrote:"so long as there is enough money to facilitate commerce"

How is this amount determined
Is there anyone who can't do business because no money exists to allow a transaction?

Needless to say, the answer to this is "no" in any advanced country, including those that were on the gold standard.

Furthermore, if there is indeed not enough gold to facilitate commerce, then gold mining is VERY profitable due to the great demand to use it in business transactions.
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