Why would the rest of the world finance us (the citizens of the United States) to sit around and watch Netflix all day? Put another way, someone has to buy the debt we are issuing. Today our debt is sold to savers in China, and to other hard working individuals across the world. We have no means of paying back the debt we are issuing, so we are monetizing the debt through a mechanism known as QE, otherwise known as a printing press.
If we are debasing the savings of hard working people, why would they want to continue to lend to us? We could raise interest rates, but with the levels of our national debt, servicing the debt would become impossible. So that isn't an option. If trust is lost in the dollar as a reserve currency, we will become very poor very very fast.
It won't matter if we print more money, or if UBI is 1,000 or 1,000,000 per month. The dollar will have less value.
It's better to focus on improving productivity and making stuff. There can't be consumption without production.
Oh, you're one of those people that worries about the value of the US dollar like it's not entire world's reserve currency already or a measure of American "strength".
I think what he means is if you give some one $1000 for free, they will only do a job that pays say $2000.
Because people want more salaries, it costs more to produce/service a thing. Therefore you have to sell your products/services at a higher prices. Now the $1000 you gave for free is less valuable.
Now come to think of this if your $1000 is less valuable. How much is $26 trillion worth debt valuable now? The people to whom the debt is owed are screwed.
Also once you do this you will have a hard time raising money next time when you need it.
Basically. Things like UBI aim to be the 'perpetual motion' equivalent of economics. The fundamental problem seems to be you can't pull anything out of nothingness.
Its status as the world reserve currency makes the US dollar very resilient right now, but what happens if or when that stops? Do you think it will always stay the reserve currency forever and ever?
Let's not forget how the US dollar became so strong in the first place. It probably wasn't because we gave a lot of people money to do nothing of value, and it wasn't because it started its life as a reserve currency from the very beginning.
This is just ignorance. Almost all US treasury bonds are owned by hedge funds, and most of the rest are owned by governments. Retail investors are a tiny share. Whether the hedge funds and governments continue to buy them is not related to how many hours of Netflix Americans watch. US govt can honor its treasury bonds because we have a productive economy. Consider the total assets of the United States, valued at over $200 trillion vs our tiny debt of $20 trillion.
Why would the rest of the world finance us (the citizens of the United States) to sit around and watch Netflix all day? Put another way, someone has to buy the debt we are issuing. Today our debt is sold to savers in China, and to other hard working individuals across the world. We have no means of paying back the debt we are issuing, so we are monetizing the debt through a mechanism known as QE, otherwise known as a printing press.
If we are debasing the savings of hard working people, why would they want to continue to lend to us? We could raise interest rates, but with the levels of our national debt, servicing the debt would become impossible. So that isn't an option. If trust is lost in the dollar as a reserve currency, we will become very poor very very fast.
It won't matter if we print more money, or if UBI is 1,000 or 1,000,000 per month. The dollar will have less value.
It's better to focus on improving productivity and making stuff. There can't be consumption without production.
There is no free lunch.