Thread by @DeficitOwls

It's Day 3 of our online book club for @StephanieKelton's The Deficit Myth!

Today we're reading Chapter 3, and we'll post highlights below. Read along and post your favorite parts with the hashtag #TheDeficitMyth.

Happy reading🦉...

Chaper 3 is about national debt. Kelton begins by recounting the war of birds between the deficit hawks and the deficit doves, and introduces the deficit owl as the wise bird that can see things from a different perspective. We agree!! #TheDeficitMyth

Kelton recalls asking politicians if they wanted to magically wave a wand to eliminate the national debt, and also if they wanted to magically eliminate US Treasury securities. They rarely realized that these are the same question, and gave opposite answers #TheDeficitMyth

"Political cartoonists depict the federal debt as a hungry T-Rex eating its way through city streets" lol #TheDeficitMyth

Kelton on the political usefulness of debt-mongering: "By persuading voters that something must be done about these big scary numbers, politicians can push for cuts to popular programs, like Social Security and Medicare." #TheDeficitMyth

"It’s not that we don’t have anything to worry about when it comes to our international trading partners. As we’ll discover later...there are legitimate reasons for concern. But relying on China to pay our bills isn’t one of them." #TheDeficitMyth

During the period of massively expanded debt/deficits (dealing with the GFC), interest rates for Greece, a currency-user, went from 6% to 35%; but for the US and UK, monetary sovereigns, interest rates actually fell. #TheDeficitMyth

The government is "not selling bonds because it needs the dollars. Bond sales just allow holders of reserve balances (green dollars) to trade them in for US Treasuries (yellow dollars). It’s done to support interest rates, not to fund the government." #TheDeficitMyth

Interest on the debt could cause inflation, if bondholders spend that income to buy goods or assets. But debt service does not force Congress to cut programs for lack of dollars. #TheDeficitMyth

"The idea that the rest of us are personally liable for some portion of the national debt is preposterous. It’s an extension of the household budgeting philosophy that wrongly assumes that the government must ultimately depend on us—the taxpayer—to pay its bills." #TheDeficitMyth

"As Fullwiler observed, interest on the national debt is 'a matter of political economy,' meaning that policy makers can always overrule market sentiment." @stf18 #TheDeficitMyth

"The surpluses began in 1998, and by 1999 the White House was ready to party like it was, well, 1999" lol #TheDeficitMyth

"One thing is for sure. We don’t want to start wiping out US Treasuries the ugly way. The 1835 way. The Clinton way. By building fiscal surpluses on the back of unsustainable private sector deficits." #TheDeficitMyth

"If we’re not going to eliminate Treasuries, then we must find a way to make peace with the national debt."

That's it for Chapter 3, tune in tomorrow for Chapter 4! #TheDeficitMyth