[mindslight]

> This present issue has been caused by decades of bad fiscal policy by both parties

So I completely agree with this statement, but I completely disagree with the metric you've chosen to illustrate it.

"National debt" only exists due to the martingale of the Federal Reserve neutering the government's own monetary sovereignty. If we need to have an inflationary currency, then the new money should be spent by Congress on deliberate public goals - it's another tax.

You can tell "national debt" is a dodgy metric because it combines two very different things into one scary-in-the-context-of-household-finances thing. The portion of "the debt" that is Treasuries held by the Federal Reserve is the lesser bit of monetary creation that was actually spent for public goals, in spite of the fake "fiscal responsibility" narrative. It is moot as far as debt goes - nothing actually happens if it compounds to infinity.

The other portion of "the debt" that is held by private/foreign owners is the government functioning as a bank account of last resort, and could very well just be at the central bank instead.

What we currently have is a dog and pony show to pretend that we don't have this centralized fountain of money, in order for the financial industry to keep getting the first cut of low interest loans (which have mostly gone into bidding up the asset bubbles).

[jameslk]

This is basically a modern money theory view (correct me if I’m wrong)?

It relies on discipline in the government to prevent inflation, e.g. raising taxes and cutting spending. But this is a similar problem to what we have already. There is no discipline, just short term thinking due to bad incentives.

http://www.thomaspalley.com/docs/articles/macro_theory/mmt_r...

[mindslight]

Perhaps, from the bits I've read? I have arrived at it coming from an Austrian/conservative economics perspective. It's clear that we have had profligate monetary creation for decades without corresponding high across-the-board price inflation. My older self is also willing to accept the orthodox response to Gresham's law whereby a deflationary currency would be quickly replaced with a different inflating one. So then the question becomes what are we spending the new money on? Presently that is mostly subsidized low-interest loans.

If your concern is discipline, then it's easy enough to imagine a department similar to the Fed that comes up with a figure of how much new money to create for the right amount of average price inflation, with much discretionary spending by Congress being set in terms of that figure. That would surely be more responsible than the current system where one political team talks in terms of a pretend "fiscal responsibility" that only hamstrings Congress but doesn't actually affect monetary inflation.