03-07-2021, 01:09 PM
(03-07-2021, 11:07 AM)David Horn Wrote:(03-07-2021, 07:59 AM)pbrower2a Wrote:(03-06-2021, 11:18 AM)David Horn Wrote:(03-05-2021, 04:16 PM)pbrower2a Wrote: As a pattern, public debt tends to be paid off in a 1T. The government has wartime assets to sell, living standards improve enough so that people end up in higher tax brackets, and such new spending as there is tends to have revenue attached in the form of taxes.
Public debt is not increased in a 1T, but no debt actually gets paid. Instead, growth and inflation reduce the impact of the existing debt.
After the Civil War, public debt really was paid down. Every budget surplus to some extent pays down debt.
The last real attempt to pay-off the debt was under Andrew Jackson, and it triggered the worst depression experienced at that time (and pretty bad even by modern standards). Paying debt means removing capital from the economy and that typically triggers a collapse.
Another fellow who went to desperate means to pay off public debt was Nicolae Ceausescu. Such created great hardships and sparked a revolution against him. After he was overthrown and executed, the new Romanian government went to the IMF for aid. Ordinarily the IMF orders countries with trouble to pay off public debt at great public pain (shock therapy), which implies privatization of about anything possible. The IMF ordered the Romanian government to take on debt to solve its problems.
Of course what I mean by paying down debt and what you think I mean may be very different. Any partial pay-down, even if it is running a short-term budget surplus or the privatization of state assets, however modest, is paying down debt. If you are a giant public utility and you have a $100 billion debt at 4% interest and you are getting a 7% return on investment on the super-leveraged assets... you are doing very well.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.