dennisbmurphy
2 min readMay 17, 2022

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Comparing French government debt in the 1700s to the USA current debt is a false equivalence. French debt was due the need to pay for wars in an era of commodity backed hard money (gold and silver). Further, France could have lowered their debt with taxation but refused to tax the wealthy nobles and couldn't tax the peasants because it would cause unrest. In short, France had no effective means of taxation to raise money. Add regional corruption to the mix and that is why France had problems. Gold standard or commodity based money makes nations a currency user.

USA debt is not like debt in a hard money economy. We have a solid system of taxation (if skewed to give breaks to the wealthy and corporations). Further, we are not on the gold standard which allows the USA, as a currency issuer rather than a currency user, to control our money.

Also, debt itself is NOT the problem. Debt on one side of the ledger is a liability for one party but on the other side is an asset. If you buy a house with a mortgage, it is liability for you and an asset for the bank until you pay it off. Student loan debt is (usually) an investment in one's future but is a liability for you and an asset to the lender until paid off.

Looking at the debt, 2/3rds of it is owed internally. Some of it, such as the 12% of "debt" the government owes the Federal Reserve is essentially a ledger transfer- a made up figure which could literally be voided as if it never existed. It's an accounting technique.

34% of debt is internal to other US individuals and institutions.

The government debt owed to Social security is 14%- and I consider this the most damaging aspect of the complaints about the debt- Because people falsely equate government debt with household debt, rather than fully fund Social Security and pledge to back it no matter what, our politicians consistently feel the need to ensure the SS trust fund doesn't go bankrupt. To do this they raise the deduction, raise the retirement age and lower the benefits paid. They mostly do this to generations not yet close to retirement age. Every year in deferred retirement age costs that upcoming retiree 7% of the benefits.

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dennisbmurphy
dennisbmurphy

Written by dennisbmurphy

Cyclist, runner. Backpacking, kayaking. .Enjoy travel, love reading history. Congressional candidate in 2016. Anti-facist. Home chef. BMuEd. Quality Engineer

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