Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0

"The U.S. is not like a household. It can never default."

This is one of the topics I'll be discussing in my upcoming response to Warren Mosler (the only MMTer that will actually engage me in discussion, heh).  

It's exactly like a household, just not one that any normal person would ever run.

If, for example, the Johnson household borrows from the Smith household in a contractual arrangement between the two, Smith would expect repayment.  As time went on, however, the Johnson household decided to stop payment and choose an alternative method.  Smith would of course protest, but let's assume the Johnson household hires some muscle to force the agreement upon Smith.

Now let's assume further that after a few years go by, a group of economists analyzed the situation and remarked that the Johnson household's new debt relationship meant that they could never default!

The U.S. government would be exactly like the Johnson household.

David in Liberty

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.