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View Diary: Mint the Coin vs the Debt Ceiling (26 comments)

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  •  I think you are confused. (0+ / 0-)

    And it is understandable. We have been laboring under a bad economic model for more than two centuries. Under the current model cancellation of debt is of benefit to the debtor and a detriment to the creditor. Under the MMT model, we can, if we wish, erase the debtors debt, but keep the creditors assets. Both sides of the equation are unharmed. True, the debtor gets a larger benefit, but the creditor is not harmed.

    Now, this might make one think that such an arrangement would be inflationary, but that it is not the case. Right now we have many creditors with lots and lots of cash and other assets which they are just sitting on. Cash can only go so far. So let the creditor keep his assets. He will continue to do what he does today--sit on them.

    But if new goods and services are created by the billions of people who now are free to use their brains and their energies productively, then the creditor with lots of cash will be enticed to spend some of it on the new things. This is not inflationary, it is expansionary and the world economy will grow immensely. Life will be beautiful.

    Might and Right are always fighting, in our youth it seems exciting. Right is always nearly winning, Might can hardly keep from grinning. -- Clarence Day

    by hestal on Tue Jan 08, 2013 at 05:55:11 AM PST

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    •  The readiness of the government to provide (0+ / 0-)

      risk-free asset storage and pay interest to boot is one hell of an expensive service provided by We the People. We have to create $360B per year in new money to provide that service to savers - why not tell savers to find another place to keep their dough and put the $360B into jobs? Same money, much better economy. And with a better economy there will be other great places for people to store their savings.

      •  My guess would be that it is never in the best (1+ / 0-)
        Recommended by:
        Old Surgeon

        interest of the economy to take money out of the private sector until the economy has fully recovered from recessionary footing.

        "When in doubt, do the brave thing." - Jan Smuts

        by bunnygirl60 on Tue Jan 08, 2013 at 10:47:49 AM PST

        [ Parent ]

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