There's no way in hell we can pay off 16 trillion in debt, and most of the rest of the world is in the same boat. The interest alone for the USA is approaching 1 trillion a year. Serious question; is it feasible to write off worldwide sovereign debt and start with a clean slate? Of course, new laws outlawing unbalanced budgets would have to be made for all nations getting bailed out. What would be the repercussions?? Didn't the old time Jews do this every 50 years? I'm very interested seeing the thoughts of ET on this. Rennick Greenspan out
"Debt forgiveness" is just a gentler way of saying "debt default". Although a significant amount of US government debt is owned internally (by other government areas), it means reduced wealth for non-US government holders of that debt. Then flow-on effects to the creditors of those entities. For example, one would assume that large holders of US government include US banks and US mutual funds. It is likely that many US banks would go bankrupt, with fairly obvious flow-on effects. A much easier way to deal with the problem is to have 5% to 10% inflation over many years / decades in order to reduce the real (inflation-adjusted) burden of that debt.
Gratz. This is the dumbest thread I've ever allowed to stay in this forum. I presume it will soon degrade and get moved, but still, an impressive accomplishment indeed. I'm reluctant to insult you so much as to assume you truly are serious, but just in case: Why not forgive *all* debt, public and private? Since money is just paper, why not hand it out on the street corners?
Why is it dumb you pompous jackass? I'm being serious, so I'd appreciate a respectful response. The alternative is sovereign bankruptcy since our debt continues to grow exponentially and is spiraling out of control. In a bankruptcy scenario what happens? Our military is enough to persuade any debt holder that doesn't want to cooperate. I did not include private debt since most of us have it under control.
That doesn't matter. The bigger issue is unfunded entitlement liabilities and those adjust with inflation. Especially Medicare, because if you think that doctors won't raise their prices in line with inflation for Medicare patients, you don't know doctors. So, even if (which will happen), you screw Social Security recipients, that doesn't solve even half the problem.
I believe that was concerning debts incurred attached to land ownership, an idea that gained an interesting foothold in radical politics before the turn of the (prior) century here (as per <a href="http://harpers.org/blog/2012/10/monopoly-is-theft/">"Monopoly is Theft"</a> -- Harpers)
That's where 5% to 10% inflation for many years can (partially) solve the problem. Social Security payments can be reduced / abolished.
Abolished? Diminish SS and we have huge problems. It would need to outpace inflation by 1%. How about set the price of gold to say $250,000 an ounce and exchange our reserves to pay off the debt?
Right, and people are just going to put up with COLAs that are 10% below the inflation rate. Also, my point was that Medicare payments go to doctors and those doctors are not going to just accept 10% inflation without getting compensated. You can't inflate away a promise to purchase services for people the same way you can inflate away debt.
That's how world wars get started. Japan owns large part of US debt as does China, now what if Japan tells party X that they can't pay back because of US default, all sorts of violent outcomes are possible. US military is very powerful but your mistake is to assume that the debt holders just accept and sit on their hands, an unlikely scenario.