dennisbmurphy
1 min readMay 14, 2024

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Powell has done a pretty good job as Fed Chair , but his take on the debt as "unsustainable" is due to being in a classic economists bubble The US doesn't really borrow money because the govt is the creator OF the money.

If one looks at our national debt, it is made up of three basic elements:

1. Debt to other govt agencies

2. Debt to bond holders

3. Debt to citizens via entitlements

#1 On the first, the govt owing debt to other agencies such as the Federal Reserve, which is effectively a govt agency and which itself holds 28%. Then there is debt to state and local govts.

#2 bond holders or private investors buy our bonds because the US is a safe haven financially

#3 social security etc.

Debt on one book is an asset on another.

Debt from budget deficits is only one outcome and not necessarily 'unsustainable' Debt to fix roads and bridges, advance medical studies, and even feed school children are effectively creating assets!

I suggest reading Stephanie Kelton's "The Deficit Myth" on Modern Monetary Theory (MMT). We are no longer on the gold standard. While Keynesian economic views largely answered more questions about the economy than did classic economics, both were largely dependent on a gold standard basis. Keynes wrote General Theory in the 1930s and classic economics is basically 1800's view of economics. MMT answers more questions better now.

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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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