tag:blogger.com,1999:blog-22301740.post4799289589535203899..comments2024-03-26T09:49:07.212-07:00Comments on The Scratching Post: Roubini on Greece (and Spain)K T Cathttp://www.blogger.com/profile/10259428595745509790noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-22301740.post-13955846524451223752010-04-30T23:47:59.286-07:002010-04-30T23:47:59.286-07:00I agree that the U.S. national debt ought to be re...I agree that the U.S. national debt ought to be reduced sometime, but there is no need to panic on account of its present size. The U.K. national debt just after WWII (and after the Napoleonic wars over 100 years earlier) was over 200% of GDP. That was not a huge problem. The U.S. and U.K. national debts are nowhere near 100% of GDP yet. See graphs at the bottom of this F.T. article.<br /><br />http://www.ft.com/cms/s/0/5a3d3438-d933-11de-b2d5-00144feabdc0.html<br /><br />Also I don’t agree that a fire sale of government owned assets is a good way of reducing national debt. Assets that are best left in government (or private) ownership should be left in government (or private) ownership, regardless of the state of the national debt.<br /><br />Jeff Burton wants to know if we can continue to print money to pay off the debt. My answer is that I don’t see why not. Paying off the national debt is easy: pay it off with a combination of money printing and extra tax. The former is reflationary and the latter deflationary. Thus the debt can be paid off while adopting whatever deflationary/reflationary stance is regarded as appropriate.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-22301740.post-32743928253408348192010-04-30T13:51:38.179-07:002010-04-30T13:51:38.179-07:00Anon, the panel had two opinions that differed fro...Anon, the panel had two opinions that differed from Nouriel's. However, the only opinion that counts is the one of the investors and it looks like they think Greece is insolvent.K T Cathttps://www.blogger.com/profile/10259428595745509790noreply@blogger.comtag:blogger.com,1999:blog-22301740.post-25930195734133139962010-04-30T13:24:56.861-07:002010-04-30T13:24:56.861-07:00I've been scanning Greece news (http://www.soc...I've been scanning Greece news (http://www.socialnews.biz/tag/Greece) to see whether other pundits take Roubini's view. There seems to be quite a split of opinion on this. Hard to judge sentiment.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-22301740.post-8529652517963832482010-04-30T12:50:24.262-07:002010-04-30T12:50:24.262-07:00Jeff, I think it's all a matter of your invest...Jeff, I think it's all a matter of your investors having confidence in you. That $1.3T blast of money was a one-time deal. If we reach a stage of insolvency where we have to have a steady stream of freshly minted unbacked cash to pay our bills, people will start selling off Treasuries and interest payments on our debt will rise faster than we can print.<br /><br />Right now, we're benefitting from the turmoil in Europe. Our Treasuries are in demand as people flee an uncertain Euro situation.K T Cathttps://www.blogger.com/profile/10259428595745509790noreply@blogger.comtag:blogger.com,1999:blog-22301740.post-32902336424024675522010-04-30T08:31:32.090-07:002010-04-30T08:31:32.090-07:00One quibble with your otherwise excellent summary....One quibble with your otherwise excellent summary. We <i>already</i> printed money to pay our debts. The Federal Reserve balance sheet ballooned 1.3 trillion to sop up toxic mortgage debts, and to purchase treasury debt. The question is, will we <i>continue</i> to print money to pay our debts?Jeff Burtonhttps://www.blogger.com/profile/18068021849429001560noreply@blogger.com