> Debt is part of capitalism, just like steel is used as building material. Talking about debt in moral terms as good, bad or whether there is a right amount (for whom?) isn't productive.
Of course. If I spoke of debt in absolute terms, I didn't mean to.
> Speaking about government debt, right now Eurozone countries have to pay very low interest rates; once they rise too much or full employment is reached, Krugman has said many times that he will advocate restraint.
The problem is Krugman tries to have it both ways. Back in 2012 when borrowing rates were MUCH higher, he STILL criticized austerity.
When economies are good, governments should spend more, because, why not? And when economies are bad, governments should spend more, because, it's the only way out. I've never seen him advocate restraint on government spending.
If you can recall evidence to prove that wrong, I'd genuinely love to see it.
> There is still huge demand for US government bonds (mostly in the USA, thats why "money we owe ourselves".
Agreed. But this won't last forever. Let's take China for example, one of the largest foreign buyers of our debt. They have to buy large quantities of it because they're pegged to the USD. What happens when they decide to remove that peg? I doubt they'll warn us.
Of course. If I spoke of debt in absolute terms, I didn't mean to.
> Speaking about government debt, right now Eurozone countries have to pay very low interest rates; once they rise too much or full employment is reached, Krugman has said many times that he will advocate restraint.
The problem is Krugman tries to have it both ways. Back in 2012 when borrowing rates were MUCH higher, he STILL criticized austerity.
http://www.nytimes.com/2012/09/28/opinion/krugman-europes-au...
When economies are good, governments should spend more, because, why not? And when economies are bad, governments should spend more, because, it's the only way out. I've never seen him advocate restraint on government spending.
If you can recall evidence to prove that wrong, I'd genuinely love to see it.
> There is still huge demand for US government bonds (mostly in the USA, thats why "money we owe ourselves".
Agreed. But this won't last forever. Let's take China for example, one of the largest foreign buyers of our debt. They have to buy large quantities of it because they're pegged to the USD. What happens when they decide to remove that peg? I doubt they'll warn us.
Remember what happened with the Swiss Franc?