Austerity Is an Antidemocratic Strategy to Boost Capital

Re:Austerity Is an Antidemocratic Strategy to Boost Capital by lotsofpulp on Wednesday January 10, 2024 @06:49AM (#38938995)

A country that issues its own currency never has to default. The only question is does the country produce enough goods/services that the rest of the world wants such that the currency (or its debt) stays in sufficient demand.

The above goods and services can simply be “stability” relative to the rest of the world, such that wealth seeking a safe haven continues to choose assets denominated in they nation’s currency.

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Re:Austerity Is an Antidemocratic Strategy to Boost Capital by munksbeer on Wednesday January 10, 2024 @11:59AM (#38940650)

> A country that issues its own currency never has to default

That is really a statement without a real point. Countries can of course print currency to keep covering their debt obligations but that just impoverishes their citizens and means they lose access to debt markets (effectively).

I know people make this statement a lot, but I never really understand what point they're trying to make.

It sounds like they're trying to claim "free lunch" but I don't really know.

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Re:Austerity Is an Antidemocratic Strategy to Boost Capital by lotsofpulp on Wednesday January 10, 2024 @01:46PM (#38941754)

I was alluding to Greece’s default being inevitable due to it not controlling its currency, a situation different from US/UK/etc.

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Re:Austerity Is an Antidemocratic Strategy to Boost Capital by evancox100 on Wednesday January 10, 2024 @10:00AM (#38939599)

And yet they often do default. Look up sovereign defaults. Possible reasons why include things like “inflation is out of control because we’re printing money to cover the debt, and we’ll get voted out if we don’t do something”.

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Re:Austerity Is an Antidemocratic Strategy to Boost Capital by ProjectArcturis on Wednesday January 10, 2024 @10:25AM (#38939834)

>often

Can you name an instance in which a developed country, borrowing in its own currency, has defaulted? I can't, at least not since the end of the gold standard.

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Re:Austerity Is an Antidemocratic Strategy to Boost Capital by nradov on Wednesday January 10, 2024 @10:06AM (#38939663)

A country that issues its own currency never has to default. But Russia chose to default on ruble denominated bonds in 1998. Sometimes default is preferable to high inflation.

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