> If we all used gold or bitcoin, there’s no reason to think public debt would be lower.

For reference, public debt tends to be higher when based in currencies that can be more easily debased. This was true in Roman times as it is now.

I’m on my phone, so I’d have to look up the book, but it’s well documented.

Entirely possible, but defaults tend to be higher when debt is in a currency that cannot be debased, for somewhat obvious reasons.

There is a constraint the prevents (some) countries from more frequent debasement: if you debase your currency, then lenders will increasingly require that future debt be issued in an external currency. And even if you find lenders, the purchasing power provided in the debased currency remains constrained by external trade in non-debased currencies.

You make a very good point.

I should have noted that this applies only when it’s your own currency.

The primary purposes of central banking are to privatize seigniorage[1] revenue and increase bankers' ability to control politicians. The former is achieved through the Primary Dealer system and the latter should be self-explanatory. Needless to say, since most spending is electronic transactions, the seigniorage revenue is very nearly the entire face value of the created instrument.

It's a blatantly undemocratic power grab, effectively allowing a consortium of private banks to limit Congress's power of the purse. Or at least that was the theory. As we're seeing now, that one putative upside is nonexistent and the Fed is happy to cooperate with Treasury to spend trillions a year. The rentier class appears to be consoling itself with massive asset inflation, while still banking the seigniorage.

The United States could just as easily once again fund all of its spending by creating new U.S. Notes[2] (perhaps without the public debt clause) and then control inflation by extinguishing those liabilities through taxation.

[1] https://www.investopedia.com/terms/s/seigniorage.asp

[2] https://en.wikipedia.org/wiki/United_States_Note

It seems like you're defining "central banking" in relation to the independence (or maybe ownership of) the central bank. That doesn't seem correct to me.

China has a central bank, but it's fully publicly owned and is not politically independent of the CCP. The ECB, in comparison, is owned by the central banks of constituent banks. And on the other extreme, the Swiss National Bank is publicly traded and a minority of its shares are privately held (i.e., not by governments). (Perhaps related or perhaps not, the Swiss Franc also has historically had very high trust and very low inflation.)

My point is, there are multiple flavors of "central bank" ownership and independence; it seems odd to argue that the primary purpose of central banking is to allow private bankers to violate political oversight when, in some cases, the bank is fully public and not politically independent. Conversely, some examples of significantly more private central banks than the Fed seem to show a history of good management in the public interest.

The UK has plenty of private banks printing notes - it doesn't seem to hurt them.