this post was submitted on 07 Jun 2024
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Articles and posts like this really just exist for conservatives to shout that we need to stop federal spending and cut out "unimportant" things like Dept of Education, as described in Project 2025.
The problem is that debt is good. It enables us to pay for infrastructure projects and services. It doesn't work like a household budget...not on the scale of international economies...because money "in the bank" is money that's not in circulation.
When money is not in circulation, it's not being used to pay for goods and services....it's just...sitting there being hoarded.
You all complain about Musk hoarding a few hundred billions. Imagine if the debt were in the opposite direction and the government had $34T sitting in the bank doing nothing.
And anyone can buy Treasury debt. In fact, last year it was an AMAZING return on investment for anyone that bought into it and holds into the debt for a few years. One of the safest places anybody could put money to earn a return (behind a HYSA at FDIC insured banks).
This is why I think the velocity of money should be a key economic indicator. Money moving around and doing work is what makes an economy better for everyone. When it starts to pool in the economy it slows down and benefits only a few.
This is another thing I learned from "Making Money"
Fully agreed, the whole "Debt bad! Deficit evil!" trope is just neoliberal propaganda against public expenditure, which translates into a weakening of the welfare state
What about staying at 0? Why is debt better than no debt AND no surplus?
I'm not a financial expert, so someone who is please step in and correct anything that I say is wrong. I need to learn too.
It's because the government's debt is also a surplus. Government debt isn't like personal debt because the government debt is mostly through selling bonds that the government issues. Most of that debt is owned by American citizens, in one way or another, who buy those bonds. Most of that $34 trillion is money the government owes it's people, or at least the Americans who hold those bonds.
It's not really money you owe but it's money that is owed to you. Well actually the billionaire class who can actually afford to buy these bonds but hey, that's Capitalism baby.