“Sovereign Default” is an Oxymoron With Fiat Money

Again, there is no risk - none, zip, nada - of default by the US (or any other currency sovereign nation) on their government bonds.  This does not mean that these governments can run unlimited deficits of unlimited amounts without any consequences.  It means the consequences don't include default on government bonds.  If the government … Continue reading “Sovereign Default” is an Oxymoron With Fiat Money

One More Time, the Government Is NOT Like a Household or a Business

Ron Dzwonkowski of the Detroit Free Press ran a column today urging people to participate in various "town hall" discussions to help figure out the US can deal with it's "deficit" and the "debt" that must "lead to collapse". Mr. Dzwonkowski adopts the posture of  "reasonable, practical man" - not that of an ideologue.  In … Continue reading One More Time, the Government Is NOT Like a Household or a Business

Europe Update: Strikes in Spain, UK Austerity, ECB Bond Purchases

European leaders (read banker-types) insist on austerity (read lower real wages and services for middle and lower classes) in the midst of 10% and rising unemployment.  Dangerous mix.  The one good sign is that the ECB is actually buying govt bonds, including Greek bonds, despite it's public hard-line position.  From Calculated Risk: Europe Update: Strikes … Continue reading Europe Update: Strikes in Spain, UK Austerity, ECB Bond Purchases

Links on Post-Keynesian Theory

We can't inflate away government debt. From Joe Wiesenthal at Clusterstock and Sorry Tim And Ben, Inflation Won't Solve The Debt Problem As this chart shows, instances of declining debt-to-GDP rarely coincide with periods of inflation. If it did If it did, we'd see more dots in the lower right-hand quadrant.

Interesting Stuff – Good Stuff This Week

Bruce Bartlett (a Republican) does a pretty good job defusing myths and fears about the federal debt at  What is the National Debt? He still misses how a deficit is necessary to ensure an adequate money supply without forcing the private sector to go into increasing debt, but overall good job.  No monsters here, so … Continue reading Interesting Stuff – Good Stuff This Week