Start by reading carefully what i wrote. Not by assuming you are correct and i am wrong. On 1, all those nations you mention have real debt because they were forced to issue debt in other nations' currencies. They do not have sufficient sovereignty over their own currencies to avoid this! 2., i very carefully distinguished the monetary union from the trade union. 3., your incorrect understand of the debt of Nations like the UK the US , Japan etc. Leads to your general misunderstanding of "national debt". I'm beginning to lose patience with you once again. You seem to have a learning disorder which i can do nothing about. The economic literature on this topic is voluminous; yet you seem to have read none of it even though i took time to point you in the right direction. Monetary Theory is an area of specialization for economists. It can be somewhat complex. It takes time and serious study. Your understanding of these topics is the same as the man on the street or the traders here. It's conventional but quite incorrect. At the present time i suggest you go back and read over and over again my point "3" in my post above until every word sinks in and is clear to you. This summarizes succinctly and correctly the situation as to money issued by the great Nations that have complete sovereignty over the money they issue.
You keep rejecting what I said, the UK has its own currency and so does Romania, Hungary and Turkey. They have all entered into economic crisis since the research was performed. You say that I do not understand what debt is, when the nation itself terms government debt as its own debt. There is an office in the United Kingdom called the UK Debt Management Office that issues and manages government debt. The very existence of the office means that there is government debt to be issued and managed. However you classify this acknowledged debt, as soon as it rises above certain levels economic crisis is highly likely. I have explained to you and I have provided you with empirical data that proves that as soon as a nation's debt level and deficit levels reach certain amounts no matter whether they have their own currency, issue debt in their own currency or are part of a unified currency they will enter economic crisis. This has been proven with my research and you seem to ignore it. It could be that you reject that economic crises are occurring and that they accompany high government debt levels. Are you saying there was not a Global Financial Crisis and a Euro Crisis? The nations that entered these crises has high government debt and high deficits. In terms of government debt the Euro Crisis is more linked to the government debt levels. Are you saying there was not Euro Crisis or economic crisis in the United Kingdom? There was a time when the UK could sell its Treasury Bonds and they could not issue more debt, the resolution can at the issuane of Index Linked Gilts and short term Treasury Notes not QE as you claim. Read the report below it is from the UK Debt Management Office. It states that there has been an increase in short term Treasury Note issuance since the inability to issue long term Treasury debt arose a decade ago. This has made the UK government debt more vulnerable to interest rate changes. REad pages 172 - 175 of the paper linked to below, it explains the increased interest rate exposure, risk and price of government debt. I have come to the conclusion that MMT's view of economic crisis is to ignore that they have happened. https://obr.uk/frr/fiscal-risks-report-july-2021/
I thought i had made sufficiently clear that own currency is a necessary but NOT SUFFICIENT condition. The reason you're having so much trouble with this is you know practically nothing about money theory. You should stop jumping to conclusions in a field you know nothing about. Read and study first. Then express an opinion. A place to start is with what i wrote. You still do not understand even that. I mean how many time have i had to point out that these countries you've mentioned in addition to issuing their own currency also issued debt in another nation's currency!!!! Please let that sink in before responding.
Part of your misunderstanding is coming from not realizing that what the Great Nations like the UK, Canada, the U.S., Australia, Japan, etc. call debt is not actually real debt. But this is far to complicated to try and explain here. You must study modern money theory to be able to understand what's really happening when these countries with very deep sovereignty over their money appear to be borrowing to finance deficit spending. Read some of the literature I recommended to you.
Here's a question through this whole God-awful shitty mess that has not been asked, and I ask you piezoe since you seem to have confident knowledge in MMT and MMM etc... Who does the USA owe this debt TO? I.E. Who is going to come banging on our door and repossess our country's whatever?
They have a very strict definition of what debt is and there is an office the UK called the Debt Management Office. When the officially recognised and defined government debt rise above certain levels or the deficit rises above certain levels there is economic crisis. This is seen across Europe in the research I have conducted and it is conclusive that high debt and high deficits lead to economic crisis. You are choosing to ignore the economic consequnces of high debt regardless of whether new debt can be issued or not. I understand your point that the government can just generate more money to pay debts but that brings economic crisis with it.
I am not challenging your observation that agencies of even the Great Nations and their numerous politicians treat government debt as though it is real debt, and even define it as though it had all the same characteristics as private sector debt. Certainly that's what the Congressional budget office does in the United States. So it surprises me not one bit that the UK Debt Management Office does this as well.* You have accepted as correct that governments with deep sovereignty over the money they issue, can issue more money as they need it. If that's the case, why would governments take on debt by issuing bonds if they didn't have to? And why do governments tax if they can create all the money they need? If I remember correctly, these are questions you yourself raised before. These are the questions that the work of the MMT economists have already answered for us. But it would be a worthwhile intellectual exercise for you to try and answer these same questions for yourself though it might take a lifetime, just as it took the MMT economists, to do it satisfactorily. Presumably you would start by fully accepting, as I believe we both now do, that 1) Governments with deep sovereignty over their money can create as much money as they see fit; 2) They tax, and 3) They issue bonds, but always in their own currency and never in another nation's. How is it that our textbooks in economics, our politicians, and even some of our Central Bankers, could have not correctly understood government issued money? That's a less important question, but an interesting one in its own right. Thinking incorrectly about today's money is very bad indeed, because it causes us do all sorts of very stupid things. The nonsense about raising the "debt" ceiling going on in Washington as I write this would be a prime example! In my previous posts I explained why these select few governments that meet all the specific requirements necessary to have very deep sovereignty over the money they issue can grow their total net deficits without limit, and too, they can grow there so-called debt almost without limit -- this gets into a discussion that takes us too far from the important points. So I'll not go there. You say: When the officially recognised and defined government debt rise above certain levels or the deficit rises above certain levels there is economic crisis. This is seen across Europe in the research I have conducted and it is conclusive that high debt and high deficits lead to economic crisis. You are choosing to ignore the economic consequnces of high debt regardless of whether new debt can be issued or not. I maintain this statement presents an incorrect picture with respect to those nations that have deep sovereignty over their money and must grow their total net deficit virtually without limit as their economies grow. Even these nations can experience financial crises, but it will not be because they have too much "debt", though high "debt" will be correlated with these Nations economies regardless of whether they are in crisis or not! For these nations, it will not be true that there exists a certain level of "debt" (bonds issued) above which there is economic crisis, because these Nations , unlike most other nations, have no real debt. Even though they are said to have debt because they issue bonds denominated in their respective currencies, they are able to support the currency they issue with their productivity to an extent that renders them effectively "debtless", that is to say they can purchase the debt they have issued to whatever extent they might desire. ___________________ * I include only the Great Nations that have very deep sovereignty over the money they issue. All other nations, can, and usually do, have real debt. The nations of the European Monetary Union, for example, have real debt in that they issue debt in a currency (The Euro) they do not have full sovereign control over. Nations like Turkey, Hungary, Romania, etc., though they have their own currencies, do not have sufficient sovereignty over their currencies to prevent them from having to borrow by issuing debt in foreign currencies. These nations too, have real debt.
Some countries see their debt being used as collateral in financial markets -- US treasuries, JGBs, Bunds, and to some degree Gilts, Swissy, etc. I think this is the point piezoe is alluding to. I generally disagree with MMT though some of what it says is an accurate description of how US treasury market's function. However, it doesn't explain the why (which is that other investors are looking for regulatory arbitrage, leverage, or seeking to reduce depository frictions, and treasury bonds -- because of the confidence in them and their liquidity -- are an elegant solution for many of those issues). When it comes to pension economics, I somewhat disagree with the solution, as generally speaking a big driver of poor returns (GFC and such too) has been a global savings glut. IMO, the problem is that there is too much savings and not enough good investments. This is where the gov't can come in to create massive projects to divert funds from excess savings into slightly higher yielding treasuries. If the projects can increase future production output then the new revenues and inflation generated by the project will more than compensate the interest expense. This is a fairly mainstream view in government, academia, and wall street. The challenge is getting incentives right -- in other words, it is all political.
Well, that's a fine question. I suppose I'm not the one to give you an answer you may want, but I'll take a stab at it, do my best, and hope I don't disappoint. I would argue that there is no debt owed to anyone by the U.S. Government, not at this stage of the Republic anyway. In Ben Franklin's day it may have been different. Did Louie give Ben money, or did we have to pay it back in beaver pelts, or something. Louie couldn't have been stupid enough to accept "Continentals" -- the note, not the dance? According to the MMT economists, both Fed Notes and Treasuries are liabilities of the government and represent different forms of money. Treasuries represent interest paying money, and the Fed Notes non-interest paying money. Neither represents a loan made to the government. The holders of U.S. Treasuries are owed non-interest paying money, but not because the Treasuries they hold represent money owed for a "loan" they made to the government, but rather because the Treasuries represent an interest paying kind of money they exchanged non-interest paying money for. The holders can receive interest, in the form of non-interest paying money. At maturity, they will receive back non-interest paying money in the amount of the non-interest paying money they exchanged for the Treasury in the first place. The MMT economists argue that these Treasuries are not issued for the purpose of raising money but to serve as both an interest paying store of money, needed especially by banks, and also as a tool the Central Bank uses to carry out monetary policy. It seems we have an English Vocabulary problem. We don't have a word for something that looks like an I.O.U., and acts just like an I.O.U. we got as the result of making a loan, but didn't. According to MMT economists, we just exchanged a non-interest paying form of money for an interest paying form called, wait for it, "an I.O.U." Apparently, because we don't have a word for these weird I.O.U.s, we just call them "Bonds", even though that word is already taken! This causes, not surprisingly, a lot of confusion. (It might be a fun exercise to come up with a special word for this weird kind of "bond." Any suggestions?) Without rehashing all the shit we have already gone through in these threads, I'll just reiterate some of the MMT that lies behind this MMT contention that there is no National Debt for Nations that can meet specific criteria. It goes back to the Government being the source of money, and as such, in principle anyway even if not in practice, the government can create as much money as it wants to. However, there can be no question that the government may not be able to issue as much "buying power" as it wants -- that's determined by other considerations, and its not the nominal amount of money but its buying power that's important. MMT economists make a big point of noting that the U.S. government always money funds it's deficits, it doesn't "appear to borrow money" until later, much later sometimes. A careful consideration of government finances would convince anyone -- whether MMT or neoclassical economist doesn't matter here-- that it would be impossible for our modern day government to function if they had to first arrange a loan before spending in deficit! When the Treasury auctions bonds to private sector, primary dealers, the Treasury is just grabbing back the money the Central Bank created for them that they already spent into the economy. Thus, according to MMT, Bond sales do not amount to borrowing anything at all like private sector borrowing, but instead represent exchanging an interest paying government liability for a non-interest paying government liability. You have a headache by now, so it is time to stop this chit chatting.
One contributor to too much saving is too large deficits and/or insufficient taxation. The U.S. may be experiencing both causes simultaneously. Interestingly, the Biden Tax gurus may agree with you. What they are proposing are modest tax revenue increases levied on high earners and corporate earnings. Taxing directly reduces deficits, so it provides a double whammy approach to too high a savings rate. It seems taxing aimed at high incomes has social benefits as well, which i leave to the imagination. I am strongly in favor of the Biden tax plan as I think it is just what Dr. Economy should prescribe for the current ailment. It will be coupled with large infrastructure projects.