Rodger Malcolm Mitchell

Not only does the federal government not need taxes, it doesn't need to borrow. So your concern that investors will "stop lending us money" is meaningless. Further, investors can demand higher rates, but the U.S. government always pays exactly what it wants to pay. Remember, it is the monopoly supplier of dollars and of T-securities.

The government does not fund spending through bonds. Visualize a brand new nation, with no money. What is the first thing the government must do? It must supply the citizens with money. How does it do this? With deficit spending. It cannot levy taxes or sell bonds, because the people have no money. So it deficit spends without any taxes being levied. It can continue to deficit spend forever, without ever levying taxes or selling bonds.

This all became possible in 1971, the end of the gold standard, at which time the U.S. government became monetarily sovereign.

Rodger Malcolm Mitchell

Just a FEW of your many errors:
1) "It only means that it is incorrect to state that government will “run of out money” or “burden our grandchildren” with debt"
– The report never said the gov't will run out of money. Read carefully. It simply stated that deficits cannot be incurred repeatedly without surpluses that periodically help to balance our budget. Let me put this in simple terms for you….if you borrow $10 today, $100 next year, $100,000 in ten years, and then $1,000,000 in forty years, it becomes apparent to your loaners (as foolish as they are) that you aren't really trying to pay back your loans, you're just taking out more loans to pay old ones and your lavish lifestyle. When you die, your loaners are screwed. When the baby-boomers die, their grandparents must pay the bill.

2. "Taxes are not a funding source for monetarily-sovereign governments"
-Are you joking? Taxes are not a source of funding? So in five years, when social security is at an ever-increasing yearly deficit, what is going to pay for that deficit? Guess what? TAXES!!!

3. "Bond issuances are not a source of funds for the government."
– Joking again. You must be this time. How has our government funded every war in the past 200 years? Through bonds. You seem to imply that print money is the answer to all money problems. With that logic, why don't we all just open our monopoly boxes and start using that money to buy oil?

4. "The record is that there is no relationship between the fiscal position of the US government and T-bond rates."
-If you read the report, you would know that the report states our fiscal position is soon to cross into unchartered territory. If you look at other countries with unsustainable levels of debt to gdp ratios (Greece for example), their T-bond rates rose significantly and were often stuck high for years.

5. "The US government cannot default on its securities for financial reasons"
-The report does not state financial reasons will lead to a US default. It states that investors will become worried about a default, and then either a) stop loaning us money, or b) demand higher rates. Investors know that significant inflation would lead to a complete collapse of the US economy, and therefore a risk of default does exist. Regardless, if the US prints its way out of the problem, investors would similarly stop loaning money or demand higher rates. Whatever plug you pull, water is going to come out.

Get an education. Stop writing this nonsense.