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View Diary: Insolvency, tax cuts, military spending and social security (188 comments)

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  •  Foreign-denominated debt was the killer (1+ / 0-)
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    upstate NY

    More precisely, they imploded because the debts were denominated in gold or foreign currency. Such a debt can go to infinity measured in domestic currency. Germany had no alternative.

    Responding to Sparhawk - of course "foreign investors ... What they want is stuff."  is true But the point is that the foreign investors have no legal claim for "stuff" if they hold a fiat debt. MMT economists support a JG which would put an economy on a labor standard - in effect making the foreign investors have the right to be provided with the produce of quantities of unskilled labor in the domestic economy.

    In normal situations, this is the perfect anti-inflationary way to balance creditor & debtor rights. MMT policies would be very deflationary in the USA - see my reply to Sparhawk in another thread.

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