@Jeremy we are nothing but a nation of debt at this point lmao

But muh federal reserve

I wouldn't go as far as saying that. We do have a large national debt, but it won't be defaulted on.

Debt has a different meaning everywhere you go.

Whether or not the debts owed are toward efficient investments justifying the former is the question.

By definition the debt cannot be paid back

Debt is based off principle and interest and every dollar in the money supply is principle

Of course it can be paid back, but no one in their right mind would want to.

Lol.

No it cant, since if the principle was paid off, no money would exist, so where dies the money to pay the interest cone from

We're not at that point, yet. We've still got another 50 or so years, that is, before we're unable to make payments toward the principle.

nah imo we are I mean literally everything around us is cajoling us into going into debt you got the government grants and shit skyrocketing the cost of higher education which people pay for decades on end then there's cars and shit and at the end of the day in our current paradigm I think Americans are just being bred as financial slaves

Ergo, the amount we owe is mathematically more then we can wver have

Better than muh universal college and healthcare tho

money comes into existance when loans are made, either by the fed to the government, or by a bank to an individual or business

money is destroyed when said loans/debts are paid

so if everyone paid their debts, including the government, no money would exist

yet there would still be the looming interest we'd be liable to pay for

this is where austerity measures come into play

the now defaulted loan, the backers of the central banks then ask for resource concessions as a means of paying on the interest

Debts are important but a bloated factorization of it is objectively damaging

It's more complicated than that, as you have various tools available to the Fed in the form of open market operations and inter-bank loan rates, the federal funds rate, etc, which expand and contract the money supply. The idea is not to have any shortages or surpluses.

this is what I learned straight out the book "Modern Money Mechanics" which is published by the federal reserve board of governors

You also have the money multiplier, a regulation banks are subject to.

the 10% reserve requirement?

that what you refering to

or something else?

So, what they have on deposit, they're allowed to loan up to 10x that amount.

A reserve requirement would be your securities.

true, but when they take in say $100, they don't isolate $90 and loan that out

what they do is create 900 dollars out of thin air, from the reserve of that $100

No, they're just allowed to loan up to that amount to minimize liability.

the money in essence "comes into existance" upon creation of a loan

There was actually a court case on this with Jerome Daly

To some extent, but think about how most people take out loans, especially businesses and so on. I know it sounds rather Keynesian, but up to this point for every dollar of debt we've taken on, approximately 8 dollars of productive value have been added to the economy. Think about a local store down the road that may have initially taken out a $100,000 loan, but has a marginal revenue of about half a million, perhaps more. What if they want to expand, in doing so taking on debt, in which the opportunity cost is justified, as there is no more of an efficient allocation.

I'm just using that as a rough example, but most debtors do not take on debt without accounting for opportunity cost - it's behavioral economics 101.

So, the expense accrued over time must be justified.

The question is whether or not the scarce resources are allocated efficiently, and in private markets that is the case.

at this point I dont think we're actually debating just stating different facts

everything we're saying is pretty much demonstrably true

It really doesn't matter whether or not what you're saying is true, as it leads one to the same conclusion, regardless of how you get there. Public debts, on part of excess government expenditure, is a negative in my view, supported by the observation of inefficient allocations and corruption, with heavily unionized labor fitting nicely into both, while simultaneously preventing private markets from ever arising in place of where government operates, losing out on growth potential and expanding State power, even though further debt further solidifies our ability to borrow more. Technically, we can expand our national debt limitlessly, unless everyone decides to shoot themselves in the foot and collapse their own economy, or speculators enter the market, which would likely happen inevitably, but we're far off that mark. It'd take another century of borrowing before this would occur, and that's implying the economy doesn't grow over that period of time.