This is true. Ultimately it's a hidden tax.
They borrow money, and then inflate it's value away.
The tax is only on savers. It's a subsidy on borrowers.
The end-game is the currency will default. This is fact. Every currency in the history of man always has eventually. So the game is to live as large as possible, default, do it again.
IMO, people who think the debt is objectively a 'bad' thing are way off base.
The US has some of the smartest economist in the world doing things on purpose.
The concept of paying down debt in a recession is what causes depressions. Anyone who tells you we should have paid down the debt over the last 3 years doesn't understand economics.
Even now, if we started paying down the debt today, because we're still so fragile, it would likely cause ANOTHER recession. Back to back.
Don't listen to the idiots on TV. They're trying to trick you.
The debt isn't a big deal right now. Jobs are.
Some good points but things are not quite that simple (IMO). Debt cannot continue to grow at a greater rate than GDP (it can grow to "infinity" interestingly enough) indefinitely. The debt is not a big deal right now - this is fact based on the extremely low rates on our 10 yr treasury, etc. The problem, however, is there is no guarantee this will continue - in fact, there is a guarantee it will not.
When the market decides to charge our government higher interest rates, more and more government revenue will be allocated to pay interest. This is not fantasy, theoretical, or debatable. We are borrowing money to pay interest on borrowed money - fact. It rarely takes more than 12 months for the system to collapse once "Minsky moment" is reached (usually used in a different context but the concept is still valid here). If anyone is remotely interested in sovereign debt (everyone literate should be at this point),
please read “This Time is Different” by Rogoff. You’ll know more about sovereign debt than 99.99% of the population if you read this relatively short book. We could be one week or five decades from the Minsky moment. Frankly, educated people's apathy toward the debt problem is a bit confusing to me given the situation in Europe. If it were not for the ECB and Germany's incredible "generosity," Spain, Italy, Greece, etc. (~4 trillion of global GDP out of a total of ~60 trillion) would be in
complete chaos. Chaos you and I are probably not willing to endure. Greece has already declined to a barter economy making long term investment all but impossible.
Due to our good fortune, the U.S. does not need to "fix" our debt problem within the next 3-5 years. We do, however, (IMO) need to lay out a credible plan to do so. Once the yields start spiking our government will have to act very quickly to enact a credible debt plan or it’ll be the end game. How much faith would you put into that occurring? They haven't put a budget together in 3 years.
Let me add a small but potentially critical side note - the Federal Reserve has flooded the financial sector will trillions upon trillions of dollars to shore up capital levels and try to increase the velocity of money.
The vast majority of these funds have flowed directly into treasuries for a variety of reasons (more detail upon request). My educated guess is a maximum of a couple dozen humans really understand the impact this is having on our treasury market. It is totally possible, if not likely, >66% of treasury buying is “artificial,” i.e. the demand is not what it appears. I hope that is not the case. Lastly, we do have many intelligent economists working on this issue but they are not in control! Few economists agree with how Congress is handling the issue and true economists like Bernanke (I have a soft spot for Ol' Ben despite my frequent criticisms because he wrote several of my undergrad text books) have repeatedly stated they cannot compensate for indecisiveness/recklessness by Congress.
