Topic: Everyone says US can't raise debt ceiling forever. Why? - page 3. (Read 5130 times)

But that's the beauty of it -- the debt is denominated in the same stuff [$], no matter how much that stuff's worth

The current system cannot crash.  Worst case, you might have a political madness that causes lenders to charge your government more.  And really, I don't think the system is doing much to keep the poor alive.  

Even if it can always be repaid, it is still risky because what it is repaid with may be worthless.

And if irresponsibility crashes the current system, they will be the ones who die.

Without getting into details (which is done over and over with neither side budging from their beliefs), how do you see the endgame?  What, exactly, would be a likely scenario if the dollar collapses?

Same fallacy again in the same thread 

Its nothing like a credit card limit.  Owners of credit cards don't own money printing presses.  The government does.  If it all goes wrong, they can print more money.  That's why its a safe investment - it can never fail to be repaid.

Agricultural policy is nothing to do with the debt ceiling.  I bet if we sat down over a beer, we would be in 100% agreement about the madness of agricultural policies worldwide.  For example, Irish farmers are paid _not_ to produce milk as it loses money.  Imagine if ballet schools could do that  

The point I was making about the currency is that there is no real risk of it crashing and even if it did crash, life would go on just fine.  And while I appreciate you want to help the poor, they are going to be screwed no matter what system we have.

Not sure how this is a currency-related problem, other than those who have more of [whatever currency] are typically wealthier than those who do not have it.  Not implying that currencies couldn't be created [inflationary currencies] which would close the gap between the haves and have-nots, simply that [an eventually] non-inflationary currency would only exacerbate the schism.

Ignore the debt ceiling which is just a charade the government puts up and focus instead on the debt. All the debt is earning interest. As the total amount of debt rises, eventually the interest on the debt will cost more than the country takes in in revenues from taxes. At that point the only way for the government to pay that interest is by borrowing more money (also known as running a ponzi scheme) or by printing more dollars. Printing more dollars results in inflation. As the rate of inflation goes up, people demand higher interest rates to offer more debt, and so a vicious cycle begins where you need to print even more money and you enter hyperinflation. One thing that could shake up this fiasco is if people start to demand debt denominated in something other than USD. Then the government would not have the option of just printing more money to pay back the debt.

The debt ceiling is like a guy with a credit card saying "I am not going to go more than $1000 dollars in debt", then when he hits that and still wants to buy stuff he says "I am not going to go more than $2000 in debt", he can keep going on up as long as he wants until he gets to his credit card limit set by the card issuer. Then it doesn't matter where he puts his own limit, he could say "I am not going to be more than $8000 in debt", but if his limit is at $2500, he will never be able to get to his debt ceiling, he will have to stop at $2500.

For my illustration, i define inflation as rising prices.  In other words, "how many kittehs can a dollar buy.  If your definition of inflation differs, please state it


I find that your claim that *my* having a Nobel Prize in Economics explains my ignorance a bit lulzier.  Re-read what you have written

I never said that the currency crash would cause that, just that it has already happened, at least in the US.  Family farmers can't compete with government subsidized corporations.

Yes, eventually things will work out.  But in the mean time, millions of people who were already struggling will starve to death since their meager income is all they have to offer.  But, you won't understand that since your arguments boil down to "I have assets, I'll be fine, fuck everyone else".

you are not being logical now.  A currency crash does not cause family farmers to disappear and become corporations.  Corporations doesn't refuse to sell their products because of a currency falling in value.  And food in the market does get sold - even if only for bartering.  And none of this is affected by lifting the debt ceiling.

So you belive the value of the money is dependent on the existing goods. This is not correct, the value originates from the minds of the individuals and their reservation demand for money.

Krugmann has this prize, and he appears to know nothing at all about money.

Except that the food supply is now controlled by corporations, not family farmers.  Even when times are good, those who are at the bottom of the income ladder frequently go hungry.

If the currency crashes, there remains the same amount of food in the market.  No-one will go hungry.  If need be, people will use barter until another currency emerges.

No.  To give you an illustration, imagine there's only one dollar and only one kitteh to spend that dollar on.  The kitteh is worth a dollar.  If another kitteh appears (our kitteh was preggers), each kitteh is now only worth *half* a dollar.  Deflation.  Print another dollar?  Each kitteh is now worth a dollar again.


I have investigated that myself, and i'm not sure how my holding a Nobel Prize in economics would "explain my ignorance."  Your logic seems a bit flawed.

Fuck shoes, let's turn into birds.

Except history shows that money is a confidence game, and confidence can evaporate quickly.  If shoe prices fall, oh well, your feet are still covered.  If the currency crashes, now you can't eat.

"Better" is pretty subjective here.  Bitcoin detractors can come up with a laundry list of why bitcoin's *worse* than fiat.  Though i don't agree with them, cheerleeding & blinding ourselves to actual problems is not helping us much.

More money is inflation. Price rises will necessarily come, when the new money is dispersed. Appearantly, there is a lag - maybe years.


You really should investigate this yourself. The Fed lends out non-existing money, partly to the government, partly to the banks which deposit it back to the Fed but use that as collateral for lending to businesses and individuals. However it is used, as long as debt is a part of the money supply, more debt means inflation and eventually reduction of the value of the money unit. This is basic. Are you a holder of the Prize in Economic Sciences in Memory of Alfred Nobel by chance? If so, that explains your ignorance.