What exactly are the repercussions of having such a large national debt?

>US gov is way more in debt than having to tax 15%-20%.

US household net worth is 86.6 trillion USD.
>wsj.com/articles/net-worth-of-u-s-households-rose-to-record-86-8-trillion-in-fourth-quarter-fed-says-1457629307

US Debt is only 19.4 trillion USD
usgovernmentdebt.us/

To get rid off 100% a 22.4% one time tax would be required.
However, this might see unrealistic and also unnecessary. It's already sufficient to reduce debt by 50% to a very sustainable level which can be archived by just a 11.2% one time tax. Many people would be ok with this.
Probably even a 7.5% tax is already enough.

>Who is going to come and collect?

Wrong question. It's not about them collecting, it's about getting more money just to keep the system going.

When investors (banks, foreign govts, people) feel like the US won't pay pay it's debt, people will stop buying bonds, and since the government can only create new money by selling bonds, we won't have the money to keep running our country. Unless the fed just prints a bunch of new money and starts buying bonds, but in that case inflation would eventually catch up with us.

>printing money to get out of debt
I heard Germany did this in the 20's, and Japan got out of their own crisis in the 90's by printing loads of money to create inflation!

US household net worth is 86.6 trillion USD.
thats national debt.
Not private debt.
Take more from the people who are themselves in debt, and what happens again?

Not sure where you are getting a one time tax of 22.4% either. Is that assuming everyone has the same money in their accounts?
Most of the rich will dodge it the same way they do now: by exploiting loopholes in the system to shield most of their wealth.

And again, the key point is social contract.
Debt is intertwined with it. Doesn't the US have a history of not liking when self-righteous governments try to tax them for things unfairly?

This scenario is 10x worse in the more socialist countries in Europe as the people actually paying tax shrinks while the tax burden increases.

>It's not about them collecting, it's about getting more money just to keep the system going
This is true, but its also part of the problem.
Its like when you are talking to someone and put your foot in it - you should stop digging.
Finding more money without changing the system and the rules will just lead to repeats of the same shit.

But then again, the normies will just let it happen and the lucky rich will get even richer as they buy the huuuuge dip, if they survive.

>US doesn't pay denbts
>global financial system collapses
>lol who is going to collect though?!

Much of this debt is locked up in 30 year Treasury Bonds. Is 30 years not enough to pay that shit off? Hell, just sell some more T Bonds at the end of the 30 year span and pay off the bonds. There shouldn't be anyone on biz who doesn't know this basic info.

so if debt is such a severe problem what's to be done about it?

Nothing. The government owns a big money printing machine and can just print more to pay it off, Inflation doesn't exist because the poor are never allowed to get rich anyway so as long as the elites just keep hoarding it in their accounts it's basically like it doesn't even exist.

Pay it off. Literally what Germany is doing right now. Though they are like the only country that actually tries to pay their debt off.

Now that's an unfair picture.
Absolute debt means jack shit. It's all about the rate debt keeps increasing compared to increase in overall production in economy.

No one expects any of the countries to pay them off at any point, just to increase GDP enough to pay the interest before making a new loan.

However, as much as Piketty is hated here, he did bring it up that overall economic growth in past 2000 years has been closer to 0 than to 2% (which is inflation that most central banks aim for), which asks the question, what stops us from slumping back to 0 growth era?

Rich people don't just have a large number in a savings account.

This fucking boars.

> Japan got out of their own crisis in the 90's by printing loads of money to create inflation!
Japan printed money in 2008 you uneducated nigger. Throughout the 90's they stubbornly fought inflation and refused to stimulate the economy. The result was a 20 years depression right before the 2008. Then yes, they thought "we really fucked up" and starte printing, but it was too late.

>depression
I meant stagnation

Germany secretly prints 70 billion euros a year, and they are not counted in their national balance. They have also spent the decade before the crisis modernizing private companies through the intensive use of public money, which has made the division between rich and poor spike more than pretty much any other euro country. This board is full of good goyim.

According to Veeky Forums, lenders should never suffer losses and be accountable for their shit choices, take from that what you will

A sovereign nation taking debt is not a bad thing itself. The issue is that if it is defaults its debt, it will depend on higher interest rates to receive more debt.

I assume that OP is referring to American debt. That is not a problem for now since the US dollar is the global reserve currency. All the US needs to do is print more money if bond-holders sell their bonds (aka quantitative easing). The PIGS crisis of the early 2010s happened largely because the PIGS were dependent on the ECB printing more Euros, which didn't happen.

That being said, high levels of debt are a sign of unsound fiscal policy. It means that the public sector and/ or the support the Government gives to industry are bloated. If it is only the former, the long term solution lies in reforming the functioning of public offices and welfare. If it is only the latter, it means that the local industry is noncompetitive and that the State should stop propping up local industries with a comparative disadvantage and facilitate the transfer of resources to local industries with comparative advantage. Of course, none of this will happen in the United States unless the BRICS go ahead and create their own reserve currency.

Excellent answer.

>Do you know of any sites that talk business and markets etc, but are actually reasonably informed?

Financial Times and the Economist are informative. FT goes into a lot of detail, while the Economist is mostly blurbs.

Used to have an FT subscription, great investment overall. But it's expensive and you can't get a print subscription unless you're in a major metropolitan area.

last time my country failed to pay its debts, the French invaded and half a decade of war ensued

>lowest interest rates of all time
>debt is evil :----DDDD

Spotted the retards

>Paying it requires the current generation to get taxed 100% their entire lives and have their kids pay of the interest - Interest rates being at the physical lowest point ever right now, which will NOT last forever.

Assuming the money gets thrown into a pit and burned, you are correct.

If you get any sort of return on investment, the increased economic growth should pay for itself.

>we should be more like Germany, the country with negative yield bonds

Austerity is destroying the European economy. Deal with it.

How can i position my portfolio to protect me from this kind of scenario? Gold and real estate are the only two things I can think of. The peanut gallery side of my brain says gun and ammo.

>first hyper inflation
>then default on debt
>devaluation of dollar
>war?
>nwo?
>global dictatorship for generations?

Deal with it.
>will we, or just let it go on?

>Interest rates sit at this retardedly artificially low level
>bond and all long term cap investments sit at shit levels
>Fed instates negative interest rates
>Run on the banks

All while:
>US continues to run a deficit
>National debt balloons
>Interest payments on the debt grow to be larger than US national tax revenue
>US can't make payments
>Helicopter money comes in
>Large Banks, Gov Contracted Orgs., and those sitting on Capital Hill get the first taste of the cash and buy up resources
>Double digit inflation ensues
>Prices rise to meet higher costs of resources
>All of your cash savings is wiped out
>Wages rise only at single digit rates
>Average consumer buying power goes down
>We fucked

I totally agree with most of what you said with the exception of Rogoff and Reinhardt's statement that growth stalls at 90%+ debt to GDP ratio.

I've read their article and not the book, but I presume it's mostly the same. The link is at nber.org/papers/w15639

They mostly made some excel mistakes, cherrypicking results and weighted some data wrong.

>The influence of RR’s research came from their straightforward, intuitive use of data
to construct a set of stylised facts characterising the relationship between public debt levels and GDP growth for a range of national economies and a range of time periods. However, this laudable effort at clarity notwithstanding, RR made significant
mistakes in reaching the conclusion that countries facing public debt levels in excess
of 90% of GDP will experience a major decline in their GDP growth rate. The key
problems we have identified with RR’s work, including exclusion of available data,
spreadsheet errors and an inappropriate weighting method, significantly reduced the
measured average GDP growth rate for countries in the >90% public debt/GDP category.

>Moreover, as we show, there is a wide range of GDP growth performances at every
level of public debt among the 20 advanced economies that RR survey.
In the aftermath of the public debate generated by the posting of our April 2013
working paper, RR did acknowledge their spreadsheet errors. They also recognised
that, in fact, there is no clear public debt threshold beyond which GDP growth will fall
off sharply. At the same time, RR have not addressed other crucial problems that we
identified with their papers.

But still, public debt is an issue, anything post 80% is mostly shit. Still, there's no real threshold for when growth plummets though

>Who is going to come and collect?

.

Good post

But it is too simplified.

Japan is an example of the developed world's future.

They literally cannot pay back their debt, but their 10 year yield is negative!

Why? How can a country monetizing its debt have negative yields?

Because debt/GDP isn't all there is to debt.

Central Banks, Big Banks, consumers, haven status, and government pension funds all have an effect as well.

The difference is that, although there is not much chance of a collapse in Japan, they have no ability to make major reforms and their central bank is now powerless. They simply don't have a functioning debt market/bond market, and their country is becoming more and more government run.

>US household net worth is 86.6 trillion USD.

Nigga if you start taxing these houses their net worth will plummet. Also, US households have a lot of debt themselves.

This is simply an idiotic propisition.

America has safe debt because it is a safe haven and the world reserve curency and lender of last resort. If we sneeze, other countries get a cold.
Nothing more.

Bullshit

Japan stimulated the fuck out of their economy 1990-2005. And they did ZIRP.

>negative bond yields are bad

If i understand you correctly you think that these lowest interest rates of all time will last forever.
You realise that when they go up the debt goes up too right?

Debt isn't evil, its useful. But the excess and flippant "Nothing bad will happen" is how all the recent financial downturns have happened. Whats the definition of insanity again?

You're misunderstanding national and personal debt.
Personal debt does work that way.
National debt doesn't, as by and large the state doesn't make profit due to most of its loan not being for investment but to pay for services provided to the public. (Texas seems to be a model for the future though)

Also, the government gains tax as GDP, this is not wealth. You have to trust the government to wisely distribute that wealth for the betterment of all.
Do you trust your government to do that?

They get power and influence from their method, and take power from the corporate banks.
Why would they give up that power?
When has any government willingly given up their power for the betterment of the people?

Real estate is too risky, its at or close to being at its peak. New generations and immigrants can't afford it, but the older generations won't sell for a loss. Its why Arabs, Russians, and Chinese are buying up land in major Western cities.
This is already creating tensions and can't last forever.

Gold is usually safe, so is the Swiss Franc, but in a bad economic downturn both could end up bad choices. I'd look to silver and probably food commodities though. Basic infrastructure companies and security providers too.

I'm not an expert on trading though.

Most US debtors are bondholders, senpai, and they can't just force people to pay. Moreover, the US can literally print money because unlike Greece who had to pay back their loans in Euros, the US chose its own currency to finance their loans.

Well economists generally agree on it, just not the actual specifics. It makes sense, at a certain point, in realistic conditions where interest doesn't remain 0, debt payments will eventually eclipse GDP generation. Wealth creation (which increases tax revenue) is second to GDP in government eyes, which is *highly* flawed - it just creates the perception of them doing something and it "working", even though no-one is really better off.
Factor that in, (especially with the influx of immigration) and growth *will* stall; we just don't know exactly or roughly where.
I mean shit, we've had the 'target' of 2% growth (down from 3%) for years and we've not hit it.
We're already closer to 0% according to a lot of economists.

you're right it is far far more complicated. I don't understand it all by a long shot.

What i have noticed, is that central banks and governments have made *huge* gains in power and influence, and that is rarely good, for business, or people in the long term.

But because this is so hard to explain to people who actually understand economics, its impossible to get it across to normies. And so the problem will only get worse as monopolies on power are formed without opposition.

I'd argue the rise of both the far right, and candidates like Sanders are the consequence of the system failing the silent majority, and its them getting their own back.
To me that signals DEEP divisions that are unlikely to be reconciled.

It's resulting in /pol/ seeping into real life and its both scary and mesmerising.

Life will recover, just like markets do. But it looks bleak for the younger generations, who are perhaps the least prepared of any generation for what the future seems to hold.

> politicians who know it's not bad

What the fuck do a bunch of lawyers know about economics desu?

This.

Major investment houses (whose job it is to make money for clients) are saying that one of their big worries is world governments not using the last 7 years of low rates to deleverage.

One of their biggest worries is politicians thinking that the current environment gives them free reign to buy votes with debt, rather than say making a few infrastructure investments and focussing on deleverging the rest of their debt that will become unpayable for future generations.

Gold desu, I only say this because when investment funds with $100billion in FUM start talking about the same things gold bugs do and consequently add an allocation of gold to their portfolios to guard against policy mistakes and overleverging maybe it's time we listened.

> US Debt is just a number.
> Who is going to come and collect?

This is true. There is government debt (think Europe), private debt (think yourself) and US debt.

The outstanding US debt represents the faith the world has in the US and the USD. The money really is worthless because it can never "come home" to actually purchase stuff. So it just sits there as "reserves" of countries.

On day it will go poof. Timing is tricky.

I'll just leave this here.

Great post on the debt btw, spot on.

nothing

just print more money lol

>I'll just leave this here.

Go back to /r/economics fag

This thread is one of the reasons I browse even 95% of all content ist bullshit and scam.

Think of it as some kind of natural selection.

for the US?
none, nobody would dare to try and force the home of the USD to repay their debts, not even china or the EU.

>If i understand you correctly you think that these lowest interest rates of all time will last forever.
>You realise that when they go up the debt goes up too right?

This is an argument against all debt.

In reality, when interest rates are low and you get a better return on investment you should borrow. And when you get a better return by paying off your debt, that's when you should worry about paying it off. There is no economical reason to pay off the debt in 2016.

>National debt doesn't, as by and large the state doesn't make profit due to most of its loan not being for investment but to pay for services provided to the public

Again, you are assuming that these services to the public provide NO economic value or return on investment to the economy.

You are also making the assumption that all national debt goes towards paying operating expenses rather than capital expenditures or other one time costs. Capital expenditures can REDUCE OPERATING DEFICITS. Guess how capital expenditures are funded? That's right. DEBT.

Some of y'all mentioned Bank of Japan and it's struggle against stagnation.

Governor of BoJ, Harukido Kuroda said in july that "there is no need and no possibility for helicopter money". Which is intriguing. In 2014, right before he increased the monetary stimulus, he said that the trend of inflation is improving. And he expressed his disapproval on negative interest rates before he approved them. If anyone needs sauce I'll try to dig them out, since it's something I remember from the announcements.

I seriously wonder what the fuck Japan is planning in September. Hold on to your asses lads.

>Harukido Kuroda

meant Haruhiko Kuroda, the nip surnames all look the same to me

>negative yield
>negative interest
>negative money

Ma nigga, are you really that stupid?

>"Hey lets take a cut of their income to pay that debt even tho we know its not enough and we'll just turn it into a huge Auschwitz."

Essentially what you're saying, yes?

>Financial Times and the Economist are informative.

Especially when all the market data is skewed.

Wow. To be so misinformed.

The number 1 debt holder is not China. They only own about a third of the debt.

Most of the debt is owned by the Federal Reserve.

Its weird but they loan the money to themselves.

Anyways... Keep in mind the US dollar is backed by the the world's largest army, nuclear weapons, and the world's largest prison system in it, which you will go if you don't pay your taxes in US dollars? (Huh neat system I guess)

So the US can never default unless it goes full retard in Congress because it can just print more money.

Inflation doesn't happen because they way it does this is the reverse of Weimar which just printed money to pay for expenses.

Where the US prints money, and lends it out at interest to be paid back at a later date which makes the lender give up money in the process resulting in less inflation other wise.

Its a devious system but it works.

It could go on forever as long as congress doesn't go full retard.

>US dollar is backed by the the world's largest army

Like espionage, social engineering, coups and straight up beheadings arent part of human history. Shit will hit the fan, I'll just sit a few rows back

How would you know about the secret printing? You're just making stuff up.

>Its weird but they loan the money to themselves

Thats not weird at all - its the reason our money printing hasnt led to hyper inflation

All the new money is sold as bonds

youtube.com/watch?v=CAYkmutzcrU

Funny thing. Debt is not really a problem for the US. As long as the USD is a world reserve currency it will always be demanded, and the US can run a trade deficit as long as they want

This guy is right.

Do you know why?

Public debt is always "sustainable" in that the government will never be unable to meet its obligations (if it issues the currency) which also means it doesn't even need to "borrow" in the first place. But, as they almost always do, we should be aware that the only difference is some corporate welfare in the form of interest payments. (No, selling bonds is not any less inflationary than monetary financing of deficits.

Now let's see, when has the US National """"""Debt"""""" ever been paid off? Right before depressions and major recessions. Well golly isn't that a coincidence?

The fact is deficits are literally (and I use that word for its literal meaning, not as some lazy millennial expression) the net saving of the entire private sector. If the government is not running a deficit then either the domestic economy is exporting more than it's importing (which all countries can't possibly do at the same time), or households are eating into their own savings (unlikely), or they're piling up their own debt.

Public debt is infinitely more stable and helpful than a mountain of private debt like we now have. All because of an obsession with
>muh public debnts
>muh surpluses
>muh sound finance

holy shit dude stop putting yourself in shame.

Exactly what is happening in argentina.

We've twelve years of an increasing deficit, decreasing GDP, dollar clamp and energetic emergency (jesus, we used to export hydrocarbons, and for the lack of improvements on production we're now importing).
We've been taking both public and private debt alongside money printing and we came to a point that we were left with no reserves.

Now a decent political party has taken over, they need to raisie incredibly high our taxes in order to atleast keep holding our situation.

But the 90% per cent of the population is going "hur dur I hate this president why don't you raise the salaries insted of the tariffs".

You know what's the sad thing about debt? The government that takes and expends it, (Or in the case of our country, they wasted it on propaganda and buying masses of voters), isn't seen as the bad guy, but the political party that has to fix the fucking deficit does.

the fun happens when we can no longer pay off interest let alone principal

>National debt doesn't, as by and large the state doesn't make profit due to most of its loan not being for investment but to pay for services provided to the public. (Texas seems to be a model for the future though)

Most retarded thing I've ever read.

Every dollar someone saves from being covered via the government for healthcare, education, food, etc. is a dollar that can be invested, saved, or spent on another part of the economy.

If the government pays for my EpiPen I can use the money saved to buy a car or invest in a stock, thus creating growth in the economy.

And this is coming from an anti-welfarist. The argument against government allocation of resources is not that public services are an inherent sinkhole but that central planning poorly incentivizes good investments and favors instead essentially what amounts to bribes to politicians leads to the government propping up bribing rent industry and letting necessary productive industries die.

>You know what's the sad thing about debt? The government that takes and expends it, (Or in the case of our country, they wasted it on propaganda and buying masses of voters), isn't seen as the bad guy, but the political party that has to fix the fucking deficit does.

Yep. Populist party takes over promising utopia, spends like no tomorrow and leaves the country in massive debt, and then fiscally-aware party has to come in and end the gravy train and gets hated and so next election Populist are re-elected and run any progress made right back into the ground.

Rinse and repeat until you're Venezuela-tier.

Democracy is a meme.

The vast majority of U.S. debt is owed to the U.S. government. Then the U.S. public and it's corporations. The third most owed is finally to outsider nations such as China, Japan and the Cayman Islands.

Politicians won't tell you (not literally you) this because you're too stupid to research it yourself.

>Government borrows a foreign currency
>Can't control how much interest it must pay on that debt
>Runs into problems
This is not surprising, but it doesn't apply to sovereign governments that are smart enough to not borrow in currencies they don't issue (why do you think Japan has had no problems with 230% Debt:GDP?).

>Most retarded thing I've ever read.
>Every dollar someone saves from being covered via the government for healthcare, education, food, etc. is a dollar that can be invested, saved, or spent on another part of the economy.
If you stopped assuming you were always right, you'd notice if the government is paying for that stuff (which I don't think is necessarily bad) it means most of its revenue would be going towards paying for public services, and thus not making profit.

The government doesn't primarily make products, or provide services for profit. They do their thing for the benefit of the state and the people. Thats how its supposed to be, but as you point out in your next post ()
Fiscally responsible parties aren't popular, and the gravy train gibsmedat parties get in again and fuck up the problem.

The USA is the most insulated nation from an international debt crisis, but if a majority of nations suddenly run on the dollar, 2 things happen: they run to the dollar, and dollar value goes up, or they run away from the dollar, and the dollar value go down.
Neither of these will be good outcomes in the extremes you'd see them present; hyper-inflation, though probably directly manageable for an economy like the USA, indirectly, with its trading partners suffering, it would face reduced economic spending and faith in the dollar.
OR, prices rise and inflation occurs - this would knock on affect foreign nations who would no longer be able to afford exporting things to america. Living costs would also increase, and people would likely lose jobs as cost of labour would increase.

Debt isn't bad, evil, or wrong. But over-leveraging debt is. And the governments and central banks of the world "stepping in" to regulate the markets "optimally" will only be bad for the consumer and businesses alike. Its also a step towards socialism, which to date has only ruined countries, save Nazi Germany, which is never coming back.

>Public debt is always "sustainable"
Tell that to Greece.
Or Venezuela.
Or any other developing economy who is being destroyed by the western developed worlds aim to *increase* inflation.
Policies seeking to increase inflation caused the prices of everyday goods like bread and rice to rise, which have caused riots, fuelled the Arab Spring (though it was not the only reason), among other things.
It works for us in the west, kind of, but its a short term fix to a long term problem, that has long term issues, such as weakening the overall world economy.
China is no longer the cheapest place to make goods - Mexico beats it by 20-30% and Chinas recent economic struggles saw inflation send the price of pork through the roof - which they were more worried about than their falling stock prices as pork is a staple food in China.

You are correct that Public debt is more stable than private debt, but right now we have both.
Growth has been failing to meet the yearly 2% target for most of the developed world, though it is occasionally hit or beaten (USA hit highs of just short of 5% after the 2008 crisis)

Right now, its very likely that growth is being maintained purely by the 0% interest rate loans. These won't last forever. But very few nations or states are preparing their economy to be capable of weathering that inevitability with those 0% loans, or taking advantage by reducing their leverage on those positions to manageable levels should interest rates rise.

And of course the whole populist gibsmedat parties win as mentioned here , undoing the responsible and smart work achieved by those who understand the problem.

Its going to be 2008 all over again, where "no-one could have predicted this", though many did.

These aren't just my opinions - they're supported and formed from reading and speaking with several top economists, traders, and market analysts. They're not necessarily right, but i trust them over the media and politicians, wouldn't you?

Thomas Sowell pointed out that if you deposit 100 bucks in the bank, then the bank owe you 100 bucks.

Now, is the bank 100 bucks better or worse off?

His point is that national debt leaves room for much accounting technicalites. In general, he doesn't seem to think that it's a good thing. But it leaves a lot of room for interpretation.

>Tell that to Greece.
>Or Venezuela.
See: Japan, US, most other prosperous, developed countries all run deficits most of the time. It hasn't caused inflation above target (2-3% because deflation is much worse than a little inflation) and it hasn't even caused bond yields to rise.

Meanwhile the eurozone fucks itself around with a common currency that they still refuse to abandon.

Anyone who understands the difference between currency issuers and currency users knows why this situation is entirely predictable. Unfortunately we're still governed by people who, I'm sorry to say, share your view that government deficits & debt should be avoided.

The job of a currency issuer (national government) should be to maintain full employment and price stability, not to aim for a fiscal balance of +-x% GDP.

>Situation 1: The government spends $100 and taxes back $80.
>Situation 2: The government spends $100, taxes back $80, then sells bonds for $20.
We all should know that the government can't involuntarily default on its bonds, if it issues the currency. So the $20 of bonds vs $20 of cash or CB reserves is worth $20 either way.
Also, in either situation, the private sector has net saved $20. If the government ran a surplus then the opposite would be true.

I'm not usually a fan of Sowell but the thing you just paraphrased sounds like he skirted around an important basic truth.

>Unfortunately we're still governed by people who, I'm sorry to say, share your view that government deficits & debt should be avoided.
I don't think debt and government deficits should be avoided. At all. I'm just not deluded enough to think that the USA's policy to seek an increase in inflation is isolated to the USA.

The developed world increasing inflation has stressed the economies of the developing world.
It's literally starting to turn nations away from the dollar as a reserve, albeit just Russia and China right now, but the strain inflation puts on the developing world will drive them to Russia and China all the same.

In fact while the Fed thinks 0 interest rates will be limited to the US, traders and banks (the biggest recipients of those loans) are putting the money into developing markets - driving up prices in those nations and making things worse for the people there, thus turning governments against the US and the declining west.

Japan has put negative interest in an effort to boost spending, and do you know what has happened? People are buying safes (sales of safes went through the roof) and not putting money in banks.
At first the markets reacted to that news with delight at the prospect of more capital in the markets. But then it sunk in that if a developed nation like Japan is having to go negative, things have to be very dire indeed.

The thing is, they're desperately trying to artificially increase growth now, and that just creates bubbles. Bubbles burst, albeit eventually. Its turned economics into a political problem, and one of national security.

I agree governments should be focused on wealth creation, not balancing GDP, as that is proven to help an economy AND the people in it.

Inflation is lower than the modest 2-3% target that governments aim for. Low, stable, predictable inflation is considered ideal (although modern economies are slipping back into depression and policymakers still won't do what is needed).

Negative interest rates are just a tax on reserves in the same way as positive interest rates are a subsidy. I would do away with both - stop public debt issuance, let the policy rate sit at zero indefinitely, and use fiscal policy to target macroeconomic outcomes.

Actually the logic behind negative rates is baffling. First it was
>QE because more reserves will mean more lending and spending
and now it's
>negative rates because less reserves will mean more lending and spending
when in fact reserves are never the constraint on credit creation in the modern banking system.

I never implied that public debt is sutainable.
I'm against public debt.

Ugh, nevermind, I misread