tag:blogger.com,1999:blog-2098432983500045934.post6995564711337076345..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Debt and Inflation (3): NomenclatureThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-2098432983500045934.post-59371695750992654432012-05-09T07:06:33.783-04:002012-05-09T07:06:33.783-04:00Let's say it this way: In an earlier part of t...Let's say it this way: In an earlier part of this series of posts, I pointed out that ALL the inflation-adjusted debt graphs I found showed the Federal debt.<br /><br />For continuity and coherence, I continued to use the Federal debt as my starting point for inflation adjustment calculations.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-15011371768575803212012-05-08T19:36:05.097-04:002012-05-08T19:36:05.097-04:00This comment has been removed by the author.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-79210549703426728802012-05-08T18:34:09.753-04:002012-05-08T18:34:09.753-04:00What you are saying would be correct is what was b...What you are saying would be correct is what was borrowed was paid back. But to a reasonable first approximation, the debt never gets paid back.<br /><br />Yeah, Clinton ran a surplus for a couple for years, and Ike had the budget close to balance for most of his term.<br /><br />But there has never been a meaningful reduction in the national debt.<br /><br />http://research.stlouisfed.org/fredgraph.png?g=75Y<br /><br />The stock never decreases.<br /><br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-43587666167484653772012-05-08T18:05:41.504-04:002012-05-08T18:05:41.504-04:00Why?
The money you borrowed in 1965 and paid back...<i>Why?</i><br /><br />The money you borrowed in 1965 and paid back in 1990, and the money you borrowed in 1980 and paid back in 1990, have two different inflation adjustments. There is much "erosion" of the debt borrowed earlier, but relatively little erosion of the debt borrowed later.<br /><br />This is why there are today calls for "more inflation" -- because more inflation produces more erosion of debt.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-66315951789260883212012-05-08T10:52:24.563-04:002012-05-08T10:52:24.563-04:00The problem is that the total debt number for that...<i>The problem is that the total debt number for that year includes both the new debt from that year and a lot of older debt, and we should really separate out the new debt before making an inflation-adjustment on it.</i><br /><br />Why?<br /><br />You are making calculations based on one data point per year. Consider it a year-end value where the stock of debt has been increased (ususally) by that year's flow.<br /><br />Otherwise, you simply perform the same operation for year x on that years beginning stock and also on the flow.<br /><br />Shouldn't matter since addition is commutative.<br /><br />Cheers!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.com