There's only so much I can do

If someone says

the Federal Reserve is the one area where experts have been most wrong, and have caused the most harm

I can point out that Congress,

Congress has created an economic environment that promotes credit use but does not also promote accelerated repayment of debt. This tilt toward credit use (and debt accumulation) makes most economic problems impossible to solve

and that the Fed takes the blame for this.

If the guy gets back to me, saying

I have no problem with credit. It's how economies grow. Debt accumulation is not a problem in and of itself

I shouldn't have to point out that credit use creates debt. It should be obvious. I shouldn't have to point out that debt is a way to keep track of the cost associated with using credit. It should be obvious. I shouldn't have to point out that debt is the cost that offsets the benefit derived from credit use. It should be obvious. I shouldn't have to point out that, interest and inflation aside, the use of credit and the addition to debt are "equal and opposite": benefit and burden in equal dollar amounts. It should be obvious.

So when somebody says

I have no problem with credit. It's how economies grow. Debt accumulation is not a problem in and of itself

and I reply

So you are saying there is a definite benefit from the use of credit, and no corresponding cost from the debt created by credit use. I cannot agree.

my meaning should be perfectly clear.


If someone shows a graph of Federal debt relative to GDP, and points out

1970-1982, the years of Nixon, Ford and Carter, where debt remained level at approximately 25%

I can point out that

debt-to-GDP runs level in the 1970-1982 period because of inflation. The rising price level inflated GDP and inflated the increases in debt, but did not inflate existing debt

and that

During the 1970-1982 period the average increase in debt was about 10% of the existing debt, so the bulk of the debt was not inflated in any given year

and that

inflation caused the GDP number to increase much faster than the Debt number. This lowered the debt-to-GDP ratio, creating the impression that debt was growing slowly in those years. But debt was not growing slowly. From 1970 to 1982 debt remained level at approximately 25% of GDP, as a result of inflation.

But I really shouldn't have to drag it out beyond that. I mean, I already pointed out the 10% growth rate. I already pointed out that only about 10% of the debt accumulation is subject to inflation. I already pointed out that inflation causes GDP to increase faster than debt. All the information is there. All you have to do is think about it.

So, when the guy replies

Both sets of data are nominal, ie before inflation is calculated in.

All I can do is laugh, point out the error

Both sets of data are nominal, ie before inflation is calculated out.

and hope for the best.


If someone points out the

rather widespread consensus of public debt being acceptable as long as it doesn’t increase too much and too fast

and says that

the focus... is solely on the upper limit of indebtedness

and then says

maybe there is also a problem if public debt becomes too low

I can point out that the public debt is definitely not too low. It is obvious, except to a mind that will not open.

If the "too low" argument shows up again I can point out that the focus remains

on public debt

and that

important questions will remain without answers until our focus shifts to private debt relative to public debt.

I can say these things. I can give you things to think about. But I can't make you think about them. In particular, I cannot prevent you from rejecting these thoughts before you think about them. That's on you.


If someone says

I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas

I can only hope.