Comment Of The Day: Debt Edition

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Dave Wing · Top Commenter · Butte, Montana

The United States does not have a debt problem. Individuals, households and businesses can have debt problems. That is because these entities are not able to create their own currencies out of thin air and give such currency to their creditors in payment of their debts. Countries like Greece, Spain and Portugal can and do have debt problems because they no longer have a sovereign, fiat currency. They gave up their currencies when they joined the Eurozone and now must pay their debts in Euros.

Countries like the United States, Japan and England possess their own currencies that are not tied to gold or any other precious metal. They can always pay their debts.

Any time the U.S. wants to, it can create more money. In fact it does this all the time. Under certain circumstances, this could lead to inflation. But those are not the circumstances that we have now. We have severe unemployment and underemployment in this country and underutilization of factories and other productive assets.

Viewing our current economic situation in terms of a debt problem or a deficit problem results in this country not doing exactly what it should be doing which is to spend massive amounts of money on our neglected infrastrucure or in expanding broadband access or in (fill in the blank________). This would put people back to work. Their lives would improve. New taxes would be paid by newly employed workers and, guess what, the deficit would start to shrink.