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0 pointskaonashi12y ago0 comments

> That says nothing about how much you fuck up the economy by doing so.

It says a great deal about the possible effects of deficit spending.

If you owe a foreign currency and have a catastrophic decrease in output, you're going to have problems.

If your debts are denominated in your own currency and have stable output, then increasing net financial assets to the private sector can prop up aggregate demand to keep the economy operating at full employment.

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SilasX12y ago

That sounds great, until you realize that "the printing money" can have consequences worse than default, which is why we have actual examples of defaults by nations that had debts denominated in their own currency.

Hence my point, to which reiterating how cool it is to print your way out of debt is non-responsive.

kaonashiOP12y ago

Russia had foreign denominated debts and a collapse of real output. Try again.

http://pragcap.com/the-russian-default-what-happened

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