The national personal debt could be paid in no time at all by just, 1. creating extra cash, 2, buying back your debt, and 3, counterbalancing the inflationary aftereffect of this by raising fees. Mike Norman lately advocated a debts removal idea here and here which is much the same as your debt removal idea I set out here.
Essentially the idea is “create new money and buy back your debt”, or “pay it back with printed money”. Mike argues for this idea on the grounds that cash and govt debt are extremely similar in nature. Thus there would be little inflation caused by paying off the debt with printed money.
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That is, govt debts is essentially a form of money. The latter point holds true in that both monetary base and govt debt appear on the liability side of central banks’ balance sheets. The main point is also true in that govt debts near maturity is essentially exactly like cash or financial base.
However, the two are different for the reason that govt debt will pay interest, whereas financial base pays little or nothing. ” the private sector will keep. Two “by the ways”. At this time, two incidental points need making. First, I’ll assume a closed overall economy for the moment: that is, the assumption is that debts holders do not take the money they acquire because of this of the buy back out of the country.
Second, this informative article is no more than “thinking about paying off your debt aloud”. Ideally, a sizable variety of factors have to be quantified before getting into a quick “pay back the debt” policy. And identifying, never mind quantifying all those factors is way above my pretty little mind.
Why pay off the debt? An obvious and incredibly poor reason behind paying off your debt is as follows. One part of the government / central bank’s liabilities (the part that will pay interest) is called “debt”. In contrast, the portion that pays little or no interest (the monetary bottom) is not commonly called “debt”.