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this post was submitted on 26 Jul 2025
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Not for the US actually.
How so? The way the system currently works in practice is that the government cuts productive spending in favor of paying interests.
Because the dollar is the global reserve currency and the government creates this currency arbitrarily and in any quantity it desires the US does not need to collect revenue in order to spend money. You're thinking of this as a household budget where you save a bit on the food budget to pay off your student loans, but the money comes into existence by the US spending it, and when the US collects it as tax the money functionally disappear. The purpose of taxation for the US is limiting the money supply, and that is why it's deflationary because the whole world has a demand for dollars.
No I'm not thinking about a household budget here, and I understand how fiat currencies, and the global reserve work. What I'm explaining to you is that what actually happens within the system is that the government will use this as an excuse to do austerity. You're describing how a fiat currency could work under a different financial system as opposed to the capitalist system that's actually in place in the US.
No. You seemingly dont understand how fiat system works because instead of talking about money supply and money demand you are acting as if the US has a finite amount of dollars and it needs to collect revenue to service debt and might have to cut services to service said debt. What you are saying is wrong. You are not "explaining" things, you are wrong on a fundamental level.
Nowhere am I saying anything of the sort. Perhaps try reading what I actually wrote and then address that?
Ok then what are you saying. Because you are disgreeing with fairly basic explanation of monetary politics, I.e. supply and demand of money, and countering with something about the US having to spend less because they have too much debt to service.
What part of what I wrote is unclear to you?