[ExI] Repudiating the national debt

Dan TheBookMan danust2012 at gmail.com
Tue May 17 23:31:39 UTC 2016

On May 17, 2016, at 4:18 PM, Rafal Smigrodzki <rafal.smigrodzki at gmail.com> wrote:
>> On Tue, May 17, 2016 at 4:28 PM, Dan TheBookMan <danust2012 at gmail.com> wrote:
>> What do you think would be likely to happen if the US national debt were repudiated? What are likely good and bad outcomes? Do you think John's sort of meltdown scenario is likely?
> ### The most prominent outcome in my mind would be the US Govt losing the ability to continue mortgaging our future to feed today's parasites. This would not be bad.

I think they would simply lose the ability to borrow for a time, but shift over to relying on taxation, inflation, and direct confiscation to cover some of the shortfall. Some of these other means have restraints. If you tax or directly confiscate too much, the tax base tends to get riled up. If inflation gets too high, you risk strong cycle behavior and other distortions.

> I could imagine the following: Patriots are, miraculously, elected to high offices in sufficient numbers to effect a repudiation of the national debt.

Patriots? Please define. Do you mean nationalists? I doubt folks that despise and fear foreigners mind duping them into financing national debt. So such types would naturally have an incentive to be against national debt repudiation.

> Rather than trying to suck life out of the flesh of our nation to maintain the cancerous growth in Washington, they would rather let the monstrosity wither. They would refuse to increase taxes to cover the expenses, they would slash the budget by 80% and let it go down in (figurative) flames. Repudiating government debt would be like pouring salt all over the (figurative) ruins - a long lasting lesson to creditors that lending to an illegitimate government is not just morally wrong but also a sucker's bet.  

Doubtful. Nationalists usually want a big powerful state that caters to their whims -- their cultural, military, and economic agenda. Thus, my guess is they wouldn't want to really curb the central government's power or scope. They simply want it run by and for them.

> Vote Trump! Screw the debt!

If Trump were to do this, it would not be by intention.


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