Quote of the day—Noah Smith

What if the government doesn’t have to pay back what it borrows, now or ever? This is the provocative thesis of an unorthodox economic theory that is rapidly gaining credence on the political left called modern monetary theory, or MMT.

Noah Smith
January 10, 2019
Don’t Be So Sure Hyperinflation Can’t Hit the U.S.
[Delusions are often functional. This particular delusion will give the political left a good shot at gaining absolute power over and destroying the United States.

Prepare for a civil war and/or buy gold and secure it in some other country.—Joe]


8 thoughts on “Quote of the day—Noah Smith

  1. This is funny, in a way. Ultimately, you’re not trading “money” for anything. You’re trading human productive output for human productive output.

    For the most part, all government does it take that output by force and use it for its own benefit. That’s what the Dems are saying; that they don’t have to pay anyone back because they’re powerful enough to tell everyone to fuck off and no one can do anything about it but get angry, complain, and then go bang their heads against a wall or something. And they’re most likely correct in that assessment.

    Gold may be the closest thing to “real money” but in a dire situation it too is pretty worthless. You can’t eat it, it’s not very good as a defensive tool, you can’t make decent cutting or other tools out of it, you can’t plant it in the ground and expect food to grow out of it, it won’t produce fresh water, you can’t build a house out of it, etc. gold won’t make you smarter, faster, stronger or more perceptive. If your pockets are full of it, it could certainly slow you down though.

    Gold’s density and ductility would make great bullets though. I’d say you could melt it down and cast bullets out of it, but its melting point is far too high for use in conventional bullet casting systems, so it’s not very good for that even.

    • While you can’t eat gold, use it for shelter, transportation, communication, or drink it, except in the most extreme situations you can trade it for those things. And if you are “on the move” a few ounces of gold will replace a half ton of food, a hundred pounds of guns and ammo, and buy you transportation to your destination.

      There are, of course, tradeoffs. If you don’t have the means to protect your possession of it in dire situations then it’s not very useful to have in such conditions. The same can be said of a store of food, a vehicle, and shelter. And guns and ammo rapidly decrease in value without food, shelter, and water.

      It seems to me that precious metals have a place in preparation to make it through “dire situations”. And they are particularly useful in preserving wealth in hyperinflation situations and cases where you may need to escape a particular geographical area.

      • It seems to me that gold is only useful as trade because we all agree that it is valuable.

        Given an apocalyptic situation, a lot of people will begin to disagree that gold has any value to them.

        I, for one, would refuse to trade useful items like tools or food for any amount of gold, if society had completely collapsed.

        Maybe this hinges on a definition of “dire situation” that is not mutual, as I can certainly imagine situations where the currently expected provision of goods and services was interrupted, but that I would not define as “dire”. In those circumstances, gold would likely retain its value, as the expectation would be that recovery is imminent and inevitable.

        For me the phrase “dire circumstances” summons images of the TOTAL collapse of society’s existing trade structures, and a reversion to simple barter & exchange. In those circumstances, recovery is NOT expected, and gold’s lack of apparent utility would quickly erode any agreed (but unwarranted, in my opinion) consensus as to its value.

        • I mostly agree.

          My definition of dire situation was along the lines of Jews in Nazi Germany or Eastern Europe during that time or during hyperinflation. Things are going, or have gone, very unstable but we are not looking at a worldwide stone age. Society needs time to settle down to a new normal (end of civil war, new government installed, escape to a new location, etc.).

  2. Over and over I’m reinforced in my observation that economics is not a science.

  3. Of course, our delightful state AG just commanded his legislative minions to ban all so called assault weapons in Washington. They’ve finally dropped the veil. Might as well get that civil war underway, because if this passes, through the legislature or by billionaire vote purchase, there’s going to be a whole lot of us who become instant felons.

  4. What works in theory usually fails in the real world. If the US EVER openly states that our debt would not be paid….or even HINTED at that the economy
    would collapse. We would lose our status as benchmark currency and if history is any guide end up at war. NEVER has a country been able to renege on it’s debts and do so peacefully. There is ALWAYS a reckoning, a settling of the books….either with wealth, land or blood.

    • The WORLD’S economy would collapse, not just ours. It’s possible that we could save things if DC was instantly swarmed and all of the Dems were escorted to their own personal light pole at the first breath about this subject. Maybe.

      Are they truly that stupid? Recent history shows they are. Can we stockpile rope in or near DC? Wouldn’t want to run short!

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