The national debt is out of control. It should be repudiated. Or at the very least liquidated the way it's done in bankruptcies.
Posted by Architraz Warden (Member # 4285) on :
While I agree paying interest on debts held between various government entities is silly, there is no way you can repudiate the entire national debt... "Let the chips wall where they may" is a fine attitude to take, but I'm betting the foreign nations that loaned that money / wrote those notes would not be happy with the largest nation (economically) sudden rendering the debts they owe null and void. While I doubt any would take up arms about it, embargoes could hurt and it'd be hell to raise money from other nations for a century afterward. Liquidation would be a whole other specter as well.
And if this was written in 1992, the author would have loved the last decade and a half. 4 trillion in debt seems so insignificant now... We're running up another trillion per year now! And while the debt is a big problem, the briefly mentioned federal social services are becoming the larger gorilla.
Posted by scifibum (Member # 7625) on :
Would repudiating the debt also obviate the need to obtain similar debt in the future? If not, it seems like a terrible idea. (Fool me twice, I won't get fooled again.)
Posted by Mucus (Member # 9735) on :
Its not just foreign nations, after all, the majority of debt is AFAIK owned by your fellow Americans. Since its a safe investment (repudiation notwithstanding), I would think that repudiation would wipe out a fairly hefty amount of retirement savings in people's pension plans and 401ks.
Posted by fugu13 (Member # 2859) on :
Not to mention the balance sheets of most of our banks, at the moment. They don't usually hold much in treasuries, but right now they have lots due to the flight to quality.
Posted by King of Men (Member # 6684) on :
quote:Would repudiating the debt also obviate the need to obtain similar debt in the future? If not, it seems like a terrible idea. (Fool me twice, I won't get fooled again.)
Ah, but in Libertarian-land, this is a feature, not a bug. The government ought not to borrow, therefore if the government can't borrow, that's excellent:
quote:Apart from the moral, or sanctity-of-contract argument against repudiation that we have already discussed, the standard economic argument is that such repudiation is disastrous, because who, in his right mind, would lend again to a repudiating government? But the effective counterargument has rarely been considered: why should more private capital be poured down government rat holes? It is precisely the drying up of future public credit that constitutes one of the main arguments for repudiation, for it means beneficially drying up a major channel for the wasteful destruction of the savings of the public. What we want is abundant savings and investment in private enterprises, and a lean, austere, low-budget, minimal government. The people and the economy can only wax fat and prosperous when their government is starved and puny.
Posted by Samprimary (Member # 8561) on :
You can't repudiate the national debt. It is a mostly infeasible idea. It sounds like something that Lew Rockwell would throw out to be ignored by competent economists. It will not even be considered outside of very extreme bodies of libertarian thought.
I'm not even sure the idea seems sane enough to get prominent consideration even among anarcho-capitalists, and that's saying a lot. Minarchists are right out, etc etc.
Posted by King of Men (Member # 6684) on :
Nations have done it before, as recently as Argentina in the nineties. It may not be a great idea for solving all our economic problems, but I don't see where it is so inherently unthinkable as to just be thrown out with "You can't do that".
Posted by Samprimary (Member # 8561) on :
Oh, I know it's possible and I don' think that it's a 100% infeasible technique, I just think that it's such the wrong approach to our own problems and so inapplicable to the situation that it's not going to receive much of any sort of serious consideration among economists.
Posted by HollowEarth (Member # 2586) on :
We'll probably take the, oh just inflate until its small again approach.
Posted by fugu13 (Member # 2859) on :
Repudiating debt is definitely an option open to nations. However, it would be remarkably foolhardy when we have so little (yes, you read that right; I don't think our current volume of debt is a good thing, but there is no denying that compared to debt burdens many nations have reached, and sometimes overcome, ours is quite small -- as a percentage of GDP, of course).