"The kids at home (well, ages 61 and 54) don't understand what this means:2) Creation and maintenance of a captive domestic audience that facilitated directed credit to the government."I'm obviously not Yoda, but I understood this as a reference to things like Japanese citizens who purchased JGBs with their savings even though there really isn't a rational reason to own JGBs. Similarly, Treasury rates went down when the S&P downgraded US debt during the last debt ceiling debates, and in some European countries (e.g., Denmark) government bonds have negative rates. I think all of these are examples of captive domestic audiences that don't really have better options than government bonds, and so they continue to pile in even though it doesn't really make sense. As a result, the governments are allowed to run up way more debt than they should be allowed to accumulate under normal financial conditions.
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