"the director of the Congressional Budget Office, Phillip Swagel, issued a stark warning that the United States could suffer a similar market crisis as seen in the United Kingdom 18 months ago, during former Prime Minister Liz Truss’s brief stint leading Britain - which briefly sent yields soaring, sparked a run on the pound, led to an immediate restart of QE by the Bank of England and a bailout of various pension funds, not to mention the almost instant resignation of Truss - citing the nation’s "unprecedented" fiscal trajectory. "
Severe austerity is inevitable in USA, regardless of whether the Democrats win the next election. Soc-dem is hopium and economic conditions in USA will worsen.
It's mostly nonsense. Federal Reserve has the power to set whatever yield it wants and the markets have to accept it. The issue is the Central banks don't want to fight the markets.
Same with the UK debt "crisis". There would have been no crisis had Bank of England properly intervened and fucked with the markets. Sometimes, markets have to be fucked it but sadly, central banks are on the neoliberal kool-aid of "markets will fix everything".
Obviously, U.S. should cut defence spending and replace it with more meaningful jobs, but to say it must be done because bond markets want it is nonsense.
Historically, capitalist crises have always come from the private sector whether it's housing market crisis, dotcom etc. Public debt in domestic currency has never been the issue other than in cases where the countries are forced to rely on bond markets (because Euro is a foreign currency) or there was a big collapse in production.
One point that few people mention when talking about the US debt is that about $13.8 trillion of it is owned by the government itself. Much of the rest is owned by US citizens, and thus does not represent a liability to the American nation itself. For a more rational government, the debt problem would be relatively easy to solve, though this one seems intent on using it as an excuse for austerity.
exactly
Most of the economic theories favoring money printing, such as QE and MMT, say that inflation is the limit to money printing. The time in which the USA could safely print money to make its problems go away is over. Inflation is likely persistent and any large increases in money printing will exacerbate inflation.
The most likely way for the bourgeois government to deal with this impending debt crisis is to cut welfare spending.
That is not true. Inflation has been lower after supply side shock due to Ukraine War. Of course it doesn't change that real wages were eroded because of lack of Government intervention.
MMT doesn't advocate money printing, its just another way of looking at how money works. Most MMT economists advocate for achieving full employment instead of arbitrary deficit targets.
What matters more is where the money is going. If the money is going into unproductive sectors like military and there is an external squeeze (due to decline of the dollar), US will suffer from inflation.
Increased spending isn't a thing advocated for by MMT economists. Michal Kalecki said it a long time ago, in the gold standard era
https://drive.google.com/file/d/1UwOlvs_Q2_VUDvkQ63NNg0oUeViY0BfO/view
It is clear that US is nowhere near full employment. It can make use of its resources and labor if it wants. But there are reasons it doesn't, Kalecki discusses it in the article.
In contrast, countries like China have managed to make use of most of the available resources. You've seen business mags criticize Chinese HSR for being run on Government debt (through state owned banks) but there is nothing wrong with that.
You don't need to "print money" to solve this problem. Just managing the economy more rationally would suffice. There are a lot of tools that the US government could use to solve the debt problem, it just chooses not to.