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It seems to me that "half the world's armed forces" is a result of being able to print money, not a cause.

That could absolutely be true, but what difference does it make? I’m asking genuinely. To me that’s the how we got here, not what we do next.

Chicken or the egg right? Pre WWII we were hit with a massive depression like everyone else. As the war effort ramped up and the rest of the industrialized world was taking it on the chin we conveniently got to reap the economic benefits of having a totally mobilized workforce, without, y'know, all our manufacturing hubs getting Dresden'd. Surprise suprise, we win the war and don't incur heavy infrastructure damage AND get the benefit of a suddenly energized economy, so we do what we do and keep the party going. Stick our noses in Korea, get in a massive arms race with the Soviet Union, fight a couple proxy wars with the Soviets. Well turns out the Soviets are light weights and can't hold their liquor and bow out early. Now we're the only ones with a ginormous army and can subsequently print our own money. We got away with it because everyone that we kept close were highly incentivized not to call us on it, on account of the soviet's nasty habit of rollin up to a place and makin it the quality of life equivalent of an Andy Dick comedy special.

Andy Dick got clocked by some random guy on Bourbon St the other day who calmly picked up his water bottle he’d put down on the way out - a clear sign of SVR training

Why should the US be borrowing for economic activity? What business does a government have choosing winners in the marketplace. The US already has one of the most efficient capital markets in the world.

The government should on being the best administrator of markets possible. They should never be taking part unless there's a ton of evidence it'd be the best option compared to alternatives or simply a moral obligation, like health care and (more so in the past, before parcels) the postal service.

Otherwise they need to go away and focus on bettering and updating the regulatory and tax regime. Not "bringing jobs" or generating economic activity, or w/e else via directly putting money and management themselves. The former is the only way they can really improve the economy. By letting the millions of highly capable do what they are already doing, while efficiently dealing with externalities that the markets and courts can't handle.

To be clear your question turns an Econ question into a poly sic one.

It’s well worth asking but it is a completely different domain. From an Econ perspective this is pretty clear. Borrowing when things are cheap is more efficient than when they are expensive.

Also as a side note, you present lots of opinions as facts in your argument (even if they are opinions I might find agreeable).

Your argument has nothing to do with borrowing. The same “choosing winners in the marketplace” argument can be made for government spending money it raised as taxes. Whether the money the government uses to “choose winners” came from taxes raised, or property sold, or fines levied, in the past or in the future, has little to do with the question of whether governments should spend money and “choose winners”.

> That may matter to you as an individual but governments get to print money.

No, governments (unless Zimbabwean) don’t get to print money. They get to borrow money, and pay back previous loans with newly borrowed money.

>No, governments (unless Zimbabwean) don’t get to print money.

Well, this is patently false on its head. The Treasury Department and Federal Reserve certainly print money.

>They get to borrow money, and pay back previous loans with newly borrowed money.

What? Money has to come from somewhere - you can't borrow a thing that has to be produced if no one can produce it. When you hear comments like "The world economy grew 3.1% in 2018" that's measuring monetary output - for it to grow new money plainly has to be created

You don't physically print much money these days, but what the US Federal Reserve, and other similar central banking systems in other countries do, is draft new liquefiable accounts (US Treasuries are a popular one and in line with the current discussion) that then adds them to existing reserves that the other banks have with the Fed - if the Fed buys a bond from a bank, it just credits the payment to the reserves that bank has at the Fed - it does not debit an equal amount from elsewhere. Then the banks themselves continue to print money - they only need to keep 10% of their deposits in reserve and can lend out the other 90%, of which ends up in other banks as deposits, which then only need to get 10% of that value, and can lend out the rest, etc. So if the Federal Reserve creates $100B in new assets and loans them out, the nominal monetary increase in the economy could be as high as $1T.

One of the fundamental pillars of the modern world economy is the fact that both central reserve banks and regular banks can print money. Without this the world economy looks almost entirely different.

> As it turns out inflation is not directly connected to the issuance of new money, although it does contribute

Are you saying that because of QE? If so I don't buy it. QE is an ongoing experiment. We'll see.

It depends on where the newly issued money goes. Newly created money being used to purchase financial instruments (e.g. corporate bonds) has no reason to cause inflation. Quite the opposite, actually (increased investment increases productivity and decreases prices). Which is exactly what we’ve been seeing for the past decades (speaking long term).

You don't seem to understand that if a broke USA can't pay its debts, its biggest problems aren't getting invaded militarily but economic. Even if it defaults on foreign debt, a) new debt is going to be insanely expensive which is bad in the long-term; b) to avoid defaulting on domestic debt (and likely destroying the domestic economy in doing so), taxes would have to go through the roof... which would also be like taking a wrecking ball to economic growth.

Interest on the debt in 2019 is equal to about 60% of the much maligned defense budget, to put it in different terms.

Re: return on debt, that's really not a strong argument when you consider where the budget actually goes. About 75% of the 2019 budget goes to entitlements (of which the majority goes to retired persons who receive more in benefits than they ever paid in) and military, neither of which really seems like they're going to bring in significant returns to justify the debt.

Sure, there are probably some programs where this argument makes sense but my impression is that most large-spending proposals from progressives are more motivated by lofty idealism designed to motivate the voting base than policies where the cost of debt vs ROI is being carefully considered.

That said, irresponsible spending on Washington is definitely a bipartisan sport these days. And as an incumbent politician, why not? You reap the electoral benefits of lavish spending on the voting public, and neither you nor voters in general care much to think any longer-term than the next election cycle.

>>"to avoid defaulting on domestic debt "

Logic tell us that there is not reason whatsoever for the only issuer of dollars defaulting in a debt denominated in dollars.

Alan Greenspan (ex-chairman of the federal reserve) will confirm it (video):

https://www.youtube.com/watch?v=q6vi528gseA

Yeah it's not physically possible when you control its issue and redemption. It's like American Airlines defaulting on it's AAdvantage miles.

The effects of hyperinflating away the debt aren't really much better