The Big Scary Debt is Not What You Think
Channel: PEGS Institute
Date: 2024-03-27

A short clip from a longer video: https://youtu.be/mEwivQeD0Q8Or
Watch the full series to get the full perspective: https://www.youtube.com/playlist?list=PLMUzeMKhbl10X-XzH-6q4iU0Ysul7cC4c

Original description:
There is often a lot of alarm and anxiety when we talk about a country’s government debt, but as we will learn, this fear of government debt, sometimes referred to as public debt or the national debt is completely unfounded.  

When politicians and journalists talk about the government debt or the public debt or the national debt and the big scary number that we are often told is unsustainable, it is important to remember that this outstanding debt is not a debt to our children or our grandchildren. The government’s debt is simply factored into the Federal budget each year when bonds from previous years mature, meaning the bond holder has their investment returned to them, with interest. Paying off this so-called debt is as simple as crediting accounts at the central bank. So the next time a politician tries to equate the government’s debt with your own household debt by arguing the currency-issuing government ‘needs to tighten its belt’ and ‘live within its means’, you know that they are making a political decision not to spend and that it has nothing to do with their ability to pay for anything the Government could want.

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Sources:
The Deficit Myth by Stephanie Kelton

Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World by William Mitchell & Thomas Fazi

Podcast with Alan Kohler and Professor William Mitchell -  https://www.youtube.com/watch?v=9ldmpmVfSoM

Why Do Currency-issuing Governments Issue Debt? - Part 1 by Bill Mitchell 
http://bilbo.economicoutlook.net/blog/?p=45106

If You Think You Know What ‘Debt’ Is, Read On by Bill Mitchell http://bilbo.economicoutlook.net/blog/?p=24850

How the Reserve Bank Implements Monetary Policy - Reserve Bank of Australia - https://youtu.be/1bBizpkB8dU

Treasury, Reserve Bank of Australia and Money - Dr Steven Hail (Part 1) - https://youtu.be/70oxUtzdrec

Hail, S. & Joy, D. (2020). Federal Debt and Modern Money. Global Institute for Sustainable Prosperity. Policy Note No. 121 https://www.global-isp.org/policy-note-121/

Special thanks to Dr Steven Hail
https://twitter.com/StevenHailAus


Credits:
Written by PEGS Institute

Spoken by Andrew Johnson
Edited by Jackson Winter

Icons made by MD Badsha Meah, www.wishforge.games, Charlie, icon king1, Raj Dev, fengquan li, Free Preloaders, Gayrat Muminov from www.freeicons.io
Tank icon by Freepik from flaticon.com
Confuse by evi1000 from the Noun Project
All other graphics created by Jackson Winter

Music
Lonely Troutman II by William Rosati
Orison by Dan Bodan
1940's Slow Dance (Sting) by Doug Maxwell, Media Right Productions