I realize “MMT Reply Guy” is just about the most annoying role one can take on. But it does matter that the federal government is the legal issuer of US currency, and cannot “run out.” So if we’re currently at (or at least near) full employment, with low inflation and “normal” interest rate levels, then the current state of the federal budget is sustainable by definition. What makes a budget position unsustainable is that it throws that equilibrium of macroeconomic conditions drastically out of whack. The size of our interest payments—whether measured in dollars, percent of budget, or percent of GDP—is simply irrelevant.
I realize “MMT Reply Guy” is just about the most annoying role one can take on. But it does matter that the federal government is the legal issuer of US currency, and cannot “run out.” So if we’re currently at (or at least near) full employment, with low inflation and “normal” interest rate levels, then the current state of the federal budget is sustainable by definition. What makes a budget position unsustainable is that it throws that equilibrium of macroeconomic conditions drastically out of whack. The size of our interest payments—whether measured in dollars, percent of budget, or percent of GDP—is simply irrelevant.
Not an economist, don't even play one on the internet, so my anti-MMT priors should be appropriately discounted.
That noted, glad to hear from you.
I still haunt the backrooms and corridors occasionally. :)