The U.K. gilt or bonds are yielding more than Germany at the current moment. Fitch says the U.K. is becoming the second most indebted sovereign behind the U.S.
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japan is the most indebted sovereign on any measure. there are lots of countries with more debt than us….
also, a large chunk of our debt is owed to ourselves (ala social security). I believe that many other governments keep their retirement promises off balance sheet, and if thats true our situation is actually pretty good.
that is what i thought, but the article says otherwise
And there you have it, an article that gets it. Channeling a little MMT, the author is…
The US will never have that terrifying moment when China doesn’t buy our bonds, it makes no difference. Everything folks tend to read and panic about – china not buying bonds, hyperinflations, the US becoming greece – is inapplicable to an nonconvertible fiat currency when the issuer of that currency owes only in its own currency.
All that bond-sales do in such countries is drain reserves. Thats all the US bond issues are – reserve drains. We don’t need to sell bonds to fund government, and our “debt” isn’t really debt at all, rather, its us offering people the option to earn interest on the dollars they hold -vs- not earning interest.
For curiosities sake, in a situation like that – where the entity paying interest does so purely voluntarily – what do you think that interest rates will eventually gravitate towards?
There is no evidence that I’m aware of contradicting what MMT teaches. The other schools, based on gold standards and stuff, keep getting everything wrong. Hyperinflation and dollar collapses and fantastically scary stories about what happens the day china doesn’t buy our bonds. pragcap.com and moslereconomics.com are two very nice blogs that can help people begin to understand how economics functions.
And hwy eurobonds won’t save europe, fiscal union won’t save europe, ONLY THE CREATION OF AN ENTITY WITH AN UNLIMITED CHECKBOOK CAN. And, like in the US, UK, or Japan, that entity must deficit spend somewhat essentially all the time (i.e., create currency).
Not to be one step more complicated, but the Fed doesn’t print money in the US, Congress does, by deficit spending.