in his challenging new book power of moneyformer Harvard economist Paul Sheard boldly stated that “government debt never needs to be repaid” as long as the debt is denominated in the issuer’s home currency and that currency is widely accepted. I’m here.
Governments fund not only health, welfare, education and other domestic expenditures, but also areas such as defense and military power projection, as well as international development expenditures such as infrastructure and various types of foreign aid. are doing business. According to Sheard, this can be done through debt, which never has to be repaid, but if it becomes more widely available, the world of economic, financial, and political and strategic power will become more powerful. It is a coveted privilege that can shift the social balance.
Just as Sheard rejects the idea that debt must always be repaid, she also rejects the idea that such debt is a burden to future generations. Many prominent international economists who have endorsed his book seem to agree.
He argues that while government debt is similar to corporate and household debt, it is fundamentally different. Bank reserves created by governments running budget deficits, like paper money, do not need to be repaid as long as the government can issue debt in its own currency.
Bringing three major oil producers under its umbrella may look like a move by the group primarily to ensure future energy security, but it is also related to the evolving BRICS financial and economic strategy. .
None of these will create an overnight funding miracle for the Brics governments or any other. But the game will change as more countries realize they can play the game bilaterally to secure financing for seemingly endless budgets and current account deficits.
China is behind this protracted battle to reduce US dominance in the international financial system while the US focuses on more blunt instruments such as tariffs and other trade restrictions such as a ban on technology exports to China. is a leading figure in
Anthony Laurie is a veteran journalist specializing in economic and financial issues in Asia.