Comment by haberman | Hacker News Reader

Comment by haberman | Hacker News Reader

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It seems to me that "deficit scaremongers" are more worried about scenarios like Greece and the Weimar Republic, not "slower economic growth."

I think it's a good-faith concern. As much as I believe in data, the ability of the US to borrow cheaply enough to finance deficit spending is entirely up to the whims of investors. People are fickle. If the shit hits the fan and investors lose confidence in the USA for whatever reason, the deficit spending we currently rely on could become many times more expensive, and unsustainable.

EDIT: Downvotes? I doubt most people are even aware of this 90% number, but everyone knows about Greece. If you ask an average tea partier, I am willing to bet they are more concerned about Greece than exceeding 90% debt/GDP. If this is nonsense, refute it (I'd like to hear, and believe, that refutation).

Comparing the US, a huge resource-rich country with its own currency, to a tiny resource-poor european country that does not control its own currency is complete and utter nonsense.

To pay back its debt all the US government needs is dollars, and hey, look, the US government controls the supply of dollars.

To pay back its debt, the Greek government needs euros, and, oh, the ECB controls the supply of euros. Oops.

If you say the US can't print money because it will cause inflation - well, in the current climate you'd still be wrong, but let's address one issue at a time. The bottom line is that the US and Greece are fundamentally different, and comparisons between them are simply wrong.

Fair enough on the fact that the US can print Dollars -- that addresses the Greece argument, but not the Weimar Republic one. Why is the inflation concern invalid?

As part of the war reparations, the Weimar republic had to pay back debt demoninated in gold and foreign currency. Same problem as Greece (or Argentina, to pick another case). Wikipedia has a good write up.

I think it's a good-faith concern.

So do I, but I also think it's wrong. As for the inflation concern, Weimar Germany was the loser of a highly economically destructive war on awful armistice terms. Even with the long and arguably inconclusive wars the US has been involved in over the last decade, its position as the #1 world power isn't really in question.

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