Debt is GOOD, Deficit is GOOD

Correct.
Government debt should be used for productive reasons. As long as there are unemployed people willing to work and produce goods or services, than its good to create debt(money) to pay those people and maximize the production of *real* wealth.
The ideal amount of debt is just enough that the production of the country is maximized (everyone who wants to work is working).
If debt is created just to give money to people for doing nothing, than that will only create inflation (BAD debt).

There will always be 'bad debt' because the combination of fiat currency and democracy always means:

1) There is a tool for sociopaths to gain more power.
2) There is always a tool for greedy voters to gain more resources

it's not a gulf. A government with its own sovreign currency can arbitrarily choose how much money to print, or how much to tax people, they have complete freedom in that sense.
If they want to decrease the money supply, or limit inflation, they can raise taxes.
But they don't *need* to raise taxes, it's an arbitrary choice.

a tool can be used for good or bad, it all depends on which people control that tool. Of course a government can go to war or give money to niggers if they want to, it all depends on the government. Your point is completely unrelated desu.

you never addressed the central problem:

how can this system be sustainable if money is debt on which interest must be paid?

Currency creation is proportional to population size.

The problem is the higher the population the lower the quality gets.

A dilution of source on a grand scale.

Tread lightly young fool.

>it all depends on the government

ALL governments are inefficient
ALL fiat currencies collapse at some point

Fiat currency is the biggest scam ever invented

On the long term, interest rates will tend to zero as the economy reaches its full potential, in fact they are already getting closer to zero in advanced economies.

The problem you are referring to, is more about the private sector debt than the public sector debt. The public sector can always pay interest cause they can print money out of nowhere. If anything that could result in some inflation but that's okay.

Now in the private sector you can have a problem, because if the public sector is not injecting money in the economy, people won't be able to pay all the interest on their private bank loans, true. In that case more and more people work for banks to pay back their loans by working or giving their assets to banks.

This is why the Jew media wants you to believe that government debt is bad for the people. If the government decreases debt than currency will be worth more, so the already rich jews will be even richer, and people will not be able to pay back their loans cause there's not enough currency injected in the system, so the jew bankers will be able to either obtain all their real assets or enslave them to work for them.

The jewish bankers propaganda has worked well enough that people believe that government debt is bad for them, cause "it is the debt of all of us". On the contrary, government debt equals the savings of private citizens and the amount of money in circulation, and its very good to have a lot of those as long as inflation isnt too high

A few problems

1. Government expenditure is always more wasteful than private expenditure, therefore the less money spent by government the better.

2. With fiat currency, fractional reserve lending and central banking, the money supply is continually expanding, giving the appearance of unlimited money. This gives governments illusion that their wasteful spending is not in fact destroying real value.

3. Another way to look at this problem, governments have too much influence as a single entity. As your graph shows, government debt raising affects everyone else. This is the central planning problem. If governments are mistaken in their debt raising, it affects everyone. If a single private enterprise raises too much debt, the problem is contained.

Destroying money is not necessarily bad. As it is, too much is being created. Neither destroying or creating is ideal.
But since so much was artificially created, it is is inevitable that it will be destroyed. The problem was in the artificial creating in the first place.

I saw a senator handwave this in an interview and he said that we're always going to have enough to pay the minimum payments. So their plan is to always extend the debt and use their taxes to literally buy more money via huge loans, and the banks and federal reserve ensure that the U.S doesn't ever default because they would lose their goose that hatches the golden egg.
The economy is apparently propped up this way, so we can and are always spending a huge amount more than we'll ever take in, and we can keep doing that for a long time because we have so much guaranteed tax dollars.
The goal of the federal government is to increase control over state governments using this fiscal wizardry which is a blood deal with the banks to give them money forever to fund whatever nonsense the fed thinks is a good thing to spend on.
It's brilliant because the banks get a set profit, the U.S gets their free money, and everyone gets more money pumped into the government sector.
The OP is right in my mind. The federal reserve and their collusion with the banks are the only ones who can actually pull this off because the U.S cannot be allowed to fail. Notice that european states do nearly the same things but are unable to continue supporting the system, because the U.S has such a successful and subtle tax system that they always have the money to give to banks and the banks don't care about the interest because they know that all the money in the world is right here.
This is roughly how I understand their current system, if anyone knows where I'm wrong I'd like to hear it.

Another big problem. Possibly the biggest.

The question is, what do governments borrow against? The borrow against future revenue.

Where does their revenue come from? Tax, in other words stealing from people.

But, in a democracy, people could vote for lower taxes, right?

But in borrowing money the government is assuming that revenues will remain adequate to service the debt, or perhaps even that revenues will be able to be raised (taxes raised).

As an aside, even if inflation is used to pay the debt, by reducing the real value of the principal owing, this is still a tax on people as it reduces the buying power of money.

To continue my thought, governments are assuming future taxing when they borrow. They are assuming the outcomes of elections that haven't happened. They are assuming public support.

Or is it really that they intend to compel people to service these debts regardless of whether there is democratic support?

I think we know the answer here, and the truth is that public debt is reliant upon government coercion. In other words, if we reduce public debt we increase personal freedom.

good points, in fact i think government deficit spending should be limited. Otherwise you could reach a point where everyone is employed by the government, and while it may go great if you have perfect planning, communist countries have shown that central planning like that is really hard and its not nice to have a single point of failure.

In an ideal world, most people are employed by the private sector, but unemployed people who are willing to work, are employed by the government for a super low wage (lower than market wages), so as soon as they can they will tend to go to the private sector rather than working for the public sector. It should just be enough to keep people out of povery and maximize production and consumes

>Fiat currency is the biggest scam ever invented
Cryptocurrency falls in this category as well no matter how many times you multiply your debt note digit stack.

Interesting, but there has to be a downside

You'd like Mark Blyth. Check his Youtube lectures.

youtube.com/watch?v=go2bVGi0ReE

50% of the population doesn't pay any taxes

1 in 5 people are on foodstamps

1 in 2 Americans gets some assistance directly from the government ever month

lel, you think these people are gonna vote for less taxes

only way you stop the gov from stealing your stuff is to hang them all in the town square

always how it has been, always how it will be

i think you are missing the point. The government debt is NOT meant to be paid back. It will never be paid back. Its just the total amount of money that the government decided to print so far and put into the economy. It is not a debt that ever needs to be repaid, we can keep taking on more debts infinitely.
Paying back the government debt, would mean removing all the circulating dollars through taxation. No government would ever do that cause it would mean collapsing the economy, its an absolute nonsense.

This.
Domestic debt is great.
Foreign debt is generational suicide.

>well yea, according to modern monetary theory, the value of fiat money is only due to the demand for it, and the main demand for it is taxation. The government creates demand for its currency by taxing in the currency and putting you in jail if you dont pay taxes. So there will be demand for that currency.
Explain then why there isn't a correlation between a nation's tax rates and value of a nation's currency then

the downside is that the budget deficit (aka increases in government debt) should always be used to finance productive activities that create real goods and services, so real value.
If they are wasted instead, you will still have more money in the private sector, so in a nominal way people will be "richer", but that additional money in the system would not correspond to additional real value created, so there would be some inflation and the money actually loses some value.

You want to insert just enough money in the system (government debt) so that everyone who is willing to work is working and the production of real goods and services is maximized.

>Domestic debt is great.
yes. That is equal to the amount of savings of the people (the money in their bank accounts)

>Foreign debt is generational suicide.
can be, but not necessarily. If you sell debt denominated in your currency to other states, they are taking on a big risk. For example, the us has imported a lot of *real* wealth from china, while giving them us debt (=dollars) in exchange. Now china has a lot of dollars but is also exposed to a lot of risk. If the us chooses to devaluate a lot, chinese would have lost a lot of "real" value (they gave the us real goods in exchange for worthless pieces of paper LOL).

In general it is a very bad idea to contract debt in a foreign currency. For example third world countries who contract debt in dollars, or even european countries who contract debt in euros, having no control of the currency (its effectively a foreign currency to them).
Those are the cases where its a REAL debt, and it can become a problem to pay it back, cause its denominated in a currency you don't control.

>Paying back the government debt, would mean removing all the circulating dollars through taxation

The dollars go to the debt owners who will then spend them on other assets. The money will keep circulating.

it's not the only factor. A fiat currency value is due to demand and supply.
Taxation is part of the demand, so increasing it puts an upward pressure on the value of that currency (hypothetically, if a state puts taxation to almost 90% it woul remove a ton of that currency from circulation so its value would increase, especially if people HAVE to pay those taxes or they'll be expropriated of their assets or put in jail).
So while it is correlated, it is not the only factor that defines supply and demand of a certain currency. Other factors are import and exports, speculative investments, and the supply side (government deficit and private bank loans).

So wait, this means that raising taxes would be the best way to solve everything.
It's literally eat the rich because our spending is too much. Once the government eats the rich, what happens then?
We slash public services to balance the system and the poor suffer, but the government is fine. We raise taxes and the rich suffer and the government is fine. Taxes would be the only solution if I'm understanding him right, which implies that we would need to keep raising them because there's no way we would lower public services ever again.

nope. Let me see if i can explain this on a Veeky Forums balance sheet:

first year, the government does a 1$ deficit spending, so government debt is 1$, and private sector savings is 1$

GOVT. | PRIVATE
-1$ 1$

second year, the government taxes 1$ to balance its budget:

GOVT. | PRIVATE
0$ 0$

on the first day the government has given the private guy 1$ (or a 1$ bond if you prefer). On the second day, it has taken that bond back, so now it owns all of its own debt and the budget is balanced (but there is no more money in circulation)

You're given the option of dinner at one of two restaurants. Both restaurants have food that tastes the same and possess the same nutritional value. They also cost the same amount. However, one of them takes half of the food from the plate once its set down on your table, the other only steals a few french fries. Which meal is more valuable?

hahaha that's a nice comparison.
Tbh though, that would only be true if a state only taxed the wealth in their own currency, but it is not like that.
Even if you convert your wealth to a foreign currency, you will still be taxed in dollars, so there's no escape from it (unless you get a different citizenship). Since there is a lot of friction in people escaping their home country and getting a different citizenship, then this doesn't happen that often.
But it's true that there is some point of no return. I would assume that if taxes are raised too high, people would either start a revolution or evade taxes entirely or move out of the country etc.

I'm not saying that trading other currencies is the option. Why not just make less money as its marginal value decreases with more work? Why not just stick it into savings instead of spending more to afford higher sales taxes? What you're describing can work short-term during recessions, but it's not how the economy functions during most healthy times. What created value during the booming economy throughout much of the 1800s? What creates value in China's free market zones?