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"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

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