TheLostBigBoss
Banned
It's funny watching people instantly jumping down Trump's throat on something he's kinda technically right about
Well, half right
Well, half right
Trump: U.S. will never default 'because you print the money'
- Thread starter shawnbuddy
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SwordStruck
Member
Printing money, particularly enough money that we would need to pay off the debt, would devalue the currency. It would not work.
PopcornMegaphone
Banned
People REALLY don't understand fiat currency.
But this is literally what we've been doing for a very long time. Unless you mean pay off the debt in one literal fell swoop, in which case I fail to see where he said we should do that. He said we should never default on the debt. That's not the same thing.
Zaraki_Kenpachi
Member
Except it can't possibly happen suddenly overnight. Also, yes we could very easily pay it back because we don't denominate debt in our countries' currencies.
The key is what currency your debt is in. If the US debt was held in Euros then they would have to buy up enough Euros in order to pay it back. However, the debt is in US dollars, mostly in the form of T-Bills, so the US can simply print more dollars to offset it. It's generally a terrible idea but it does exist as a last resort.
Think it was around this time that Trump also publicly attacked the pope on the campaign, whom he just met in person.
These things deserve to remain in public conscious As a reminder that our president is both a complete idiot and a total shitstain. Not that we don't get daily reminders already, but nothing truly changed in office.
These things deserve to remain in public conscious As a reminder that our president is both a complete idiot and a total shitstain. Not that we don't get daily reminders already, but nothing truly changed in office.
Printing money doesn't create value. Printing enough money is basically defaulting. (Some complications and details involved.)
At some point people start refusing to lend a country more money. The US defaulting or basically defaulting would be really bad.
PopcornMegaphone
Banned
It's not defaulting. Printing a ton of money would create inflation but it isn't defaulting.
Skellig Gra
Member
Printing more money while drastically cutting taxes is a horrible horrible idea. To say we could never default on our debt is naive, look at Greece.
We are printing money both literally and philosophically every day. It is not defaulting.
TheLostBigBoss
Banned
I mean, he's not wrong, we could literally pay off our debt by just printing money.
That's not including the catastrophic effects it would cause on the dollar and international relations, but Trump is technically right, which of course is the best type of right!
Carpe Libertatem
Member
It's actually crazy to see people jumping on him for saying we should never default on the debt because the U.S. prints money.
The opposite position (that the U.S. can default) is used as a tool to create fear and push for austerity measures/budget cuts. His position here is completely at odds with core GOP beliefs.
The opposite position (that the U.S. can default) is used as a tool to create fear and push for austerity measures/budget cuts. His position here is completely at odds with core GOP beliefs.
PopcornMegaphone
Banned
Greece is different because they don't control their own currency. That's a huge difference from the usa
Zaraki_Kenpachi
Member
Greece's only problem is it's not denominated in it's own currency. Did the US start taking out loans in Euros?
Holy shit no. Printing money does not also mean default. We print more and less money over times due to what economic conditions we want to promote/curtail. When we've had expansionary monetary policy, it did not mean we defaulted all those times. People really need to learn economics.
To say we should look at Greece is missing the biggest piece of information on what happened in Greece: Greece did not have monetary sovereignty.
And again, you're looking at what he said as prescriptive in a worst case scenario sort of way. We are and have been printing more money for a very long time. It would not be new.
It's still not a great idea regardless of how long we've been doing it.
TestOfTide
Banned
Don't forget that in modern economics, Debt to GDP ratio is more important than the actual debt number. So the better way to deal with government debt is to just boost the economy.
SwordStruck
Member
Printing this much money would actually be hyperinflation, and by the time you print enough the currency would be drastically devalued to a point where it wouldn't pay off the debt.
OG Shaka Zulu
Member
"He's right you know" - Morgan Freeman
TheCochese
Banned
I thought this guy was in business.
John Dunbar
correct about everything
comparing usa to greece is what's naive.
all american debt is in dollars, and usa decides how many dollars there are. usa will never have to default unless they choose to.
that's not to say it would be a good idea, but there's nothing stopping them. pay the debt, devalue currency, fuck everyone they owe money to.
Zaraki_Kenpachi
Member
How much is "this much money"? Are you saying the national debt because I don't know why we would pay off debt that's not even due yet.
Skellig Gra
Member
My point is that its more than a political problem to pay off a loan. If you owe trillions of dollars to a foreign entity at some point you won't be able to cover it even if you print endless amounts of money, especially if you have cut off the flow of incoming tax revenue.
Pai Pai Master
Banned
This article is a year old...
Trump is correct here.
Also, the German Hyperinflation is a different animal than the US. We don't have a dynamic that will allow that.
Germany had hyperinflation because they were printing money to pay back a debt owed in a different currency. So the more they printed, the more marks were needed to equal one unit of currency that the debt was owed in. So it had a reinforcing effect that increased inflation over time.
The US owes all of its debts in US currency. If the US owes $100, you are only getting $100, whether that $100 is worth 1,000£ or 1£
Also, the German Hyperinflation is a different animal than the US. We don't have a dynamic that will allow that.
Germany had hyperinflation because they were printing money to pay back a debt owed in a different currency. So the more they printed, the more marks were needed to equal one unit of currency that the debt was owed in. So it had a reinforcing effect that increased inflation over time.
The US owes all of its debts in US currency. If the US owes $100, you are only getting $100, whether that $100 is worth 1,000£ or 1£
That's not how hyperinflation works. The US is currently printing money. Hyperinflation occurs when there is a DRASTIC loss in confidence in the country issuing the currency such that they would basically collapse at any second.
This here.
The fact that people bring up Greece and Germany shows they have a fundamental lack of understanding in the actual situations that happened.
This kinda amuses me even more - he was saying this shit and he still won
SwordStruck
Member
Well, in 2016 the US had 215+ billion USD in a 'due status'.
Print the money and don't tell anyone, then you pay them..lol.
Crinkle it all first though...don't want it to look fresh off the press. Show up with your slightly used looking 100s in a giant suitcase.
I mean, if they don't know it's "new money", you just pay the debt and carry on X-D
May have to cook the books somewhere though.
Crinkle it all first though...don't want it to look fresh off the press. Show up with your slightly used looking 100s in a giant suitcase.
I mean, if they don't know it's "new money", you just pay the debt and carry on X-D
May have to cook the books somewhere though.
Incorrect. If they printed off that much money they could absolutely pay off the debt. It would cause inflation elsewhere.
Edit: in this thread you can see much of GAF has either never taken macroeconomics or didn't understand much of it.
Skellig Gra
Member
Yeah real hilarious.
TheLostBigBoss
Banned
You can if you control the currency the debt is owed in.
There are obvious real and catastrophic ramifications for doing so, but it's actually possible.
Skellig Gra
Member
Fair enough, technically possible, but the act of doing it would destroy the entire economy/country so calling it a political move is a bit of an understatement.
Zaraki_Kenpachi
Member
No, you'll always be able to cover it. That's the point of fiat currencies. You can argue with will have other less desirable effects but it is literally impossible to default, that is 100% true. Also, trillions to a foreign entity is meaningless and has no basis on anything. Most of the debt isn't held by foreign countries so you're going more for shock value of a trillion dollars than it being meaningful.
Ok? One, that's a small amount and why would we print all cash for that when we largely roll our debts? Two, do you really think that $215bn would sink the US and destroy it as a country?
TheLostBigBoss
Banned
SwordStruck
Member
One could argue that printing a significant portion all at once to pay off the due balance would cause a lack of confidence in the US dollar.
many places
Member
Lmao I'm done
shawnbuddy
Member
It's interesting to see different perspectives on this. I just assumed "print more money" is a bad idea.
Enter The 36 Chambers
Member
I remeber being 15 in my first economics class and someone asked why dobt we jusy print more money.
SolarPowered
Member
So much for having to worry about food, shelter and healthcare.
Checkmate Democrats
Checkmate Democrats
Funky Papa
FUNK-Y-PPA-4
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