Did you seriously think that Lindsey Graham would tell the truth about debt and deficits?
Did you think the soon to be retired Ron Paul would tell you the truth about the US currency? He's into the gold standard and Bircher-type monetary conspiracies.
Maybe Sen. Saxby Chambliss? Nope. He's into the Greece thing too. So is Michele Bachmann.
OK it's time for some truth telling. (I know this article came out in October, but it can never be posted enough.) Are you ready cause here it is via Forbes: No, The United States Will Not Go Into A Debt Crisis, Not Now, Not Ever
If there’s one article of faith in Washington (and elsewhere), it’s the idea that the United States might get into a debt crisis if it doesn’t get its fiscal house in order. This is not true. The reason why it’s not true is because we live in a fiat currency system, where the United States government can create an infinite number of dollars at no cost to meet its obligations. A Treasury bill is a promise that the government will give you US dollars–something that the United States government can produce infinitely and at no cost. That’s the reason why interest rates on United States debt have only gone down even as the debt has ballooned.
That’s the reason why Great Britain has very low rates on its debt despite having very high debt-to-GDP. That’s the reason why Japan has an astounding debt-to-GDP ratio and still enjoys some of the lowest rates ever. Investors have bet for so long that there would be a run on Japanese debt and have ended up so ruined that in financial circles that trade is called “the Widowmaker”. (Here’s a more detailed analysis by my former colleague Joe Weisenthal at Business Insider.)
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You don’t have to take my word for it. How about Alan Greenspan? He said (PDF): ”[A] government cannot become insolvent with respect to obligations in its own currency. A fiat money system, like the ones we have today, can produce such claims without limit.”
It's been so frustrating listening, reading and watching the travesty about debt, deficits and fiscal cliffs being played out and hardly ever a mention about the TRUTH.
Why am I writing this? After all it’s already common knowledge among economists, Fed officials, and an increasing number of sophisticated investors.Maybe so, but it’s still not common knowledge among politicians and among the general public. A lot of people still think that the US is under some risk of one day becoming like Greece, and it’s distorting our public debate.
It’s especially distorting it on the Right, where hysteria about deficits, and debt, and becoming like Greece has reached a fever pitch. Paul Ryan, especially, has framed his entire message on entitlement-cutting on the flawed premise that the US needs to cut its entitlement or it will suffer a debt crisis. This message, in turn, has infected broad swathes of the conservative movement (including very smart people in it), a movement that I consider myself a member of and want to see in strong intellectual health.
This is from a conservative my friends. Is it any wonder that more of them have not taken up his call of truthiness? A whole swath of Dems need to read this piece also. It's very easy to understand.
