Oh Dear: More Debt Silly Stuff

What is it that we text each other? OMG?

Well here’s an OMG moment, one that illustrates why we will not be having a very edifying debate about debt.

Our esteemed Senator John Conryn, a Republican from Texas, wrote this last week:

 “It may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country, rather than plod along the path of Greece, Italy and Spain,”

I know, the split infinitive grates on me too. But that’s not only what causes educated eyebrows to be raised. It’s the comparison with Greece, Italy, and Spain.

This is so tiring, but here we go.

The US can never, ever, not at all, not once in the entire history of the universe and beyond, go down the path of those European countries. Perhaps Conryn doesn’t realize this. Maybe he’s just being sly and using political hyperbole for effect. Or maybe he just likes to mislead people. Whatever. We know better.

The US will not go down that path, not because Congress gets a sudden case of austerity, but because it owns its own printing press. Duh. Whenever it runs out of cash, the US can simply print some more. So it will always be able to pay its bills.

Always.

Unless, that is, the dimwits and charlatans like Conryn order a default by refusing to pay up against said debt.

Greece, Italy, and Spain don’t have their own currency. They use Euros. They don’t own a printing press. They don’t issue debt in their own currency, they issue it in someone else’s. While this may appear trivial, it is massively huge.

Look at the big countries who own a printing press: the US, UK, and Japan. Look at the interest rates they are paying on their debt. Next to nothing. This is despite having rotten economies and piles of debt. The markets don’t seem to worry. Why not? Because there is next to no default risk. That printing press re-assures everyone.

So any time you hear someone blather on about comparisons with Greece et al just smile and move on. The person making the comparison is either ignorant or is a member of the right wing extremist attempt to slash entitlement spending through the backdoor claim about our imminent fiscal demise.

It’s rubbish either way.