The Shuffle

“QE pulled us out of recession”, wow. I mean really. Just wow.

  1. You’re misquoting me (and not just because you dropped the word “the”). That was the first half of a conditional statement: “If QE pulled us out of the recession…”

  2. I’m open to argument or evidence that QE wasn’t an important and effective part of the response to the recession. “Just wow” is neither.

The fact you framed it as a hypothetical doesn’t change that it’s the claim you’re making. It just allows you to make the claim more subtly, so as to blunt the argumentative edge of the position contrary to your own. People fall for this tactic a lot, I’ve noticed. NPR is one of the masters of it. I notice you also did it during the discussion on Shakespeare in the Park, holding back from openly making the claim that is clearly the claim you are actually pushing. But with me, I will always go right to the actual point being made, sophistry aside.

And to claim that QE 1-4 has been anything but an unmitigated disaster for the American people, but a huge win for banks and big government, is crazy. The game is rigged, and anyone who defends it either is protecting their own interest in it being rigged or is simply following the status quo narrative because that’s easier than thinking against the grain.

I think framing a claim as a conditional is useful and valid. In this case, Otto scoffed at the idea that QE has been successful and was good for non-bankers. I asked him what he’s comparing against, and then offered two conditional statements, to say, “if this is the context, then your implication that QE has been unsuccessful or bad for ‘main-street’ is wrong”. In context, they aren’t assertions, they are demonstrating that it matters what baseline we’re using to evaluate a claim like “QE has not been successful”. “Stabiliz[ing] housing prices” can still leave a lot of people in a shitty place, with houses worth much less than they paid for them, while still being a lot better for those people than some alternative.

And it’s a legitimate response to say, “I agree with the conditionals but I reject the antecedent”, and it’s useful because it moves the conversation to what the antecedent should be, e.g. without QE, X would be the case, and with QE, Y is the case, and therefore QE is unsuccessful.

I read Otto to be saying more or less that QE didn’t fix everything. I agree. I agree that the US economy isn’t in an ideal state, there’s a lot wrong with it, and the banking system is part of what’s wrong with it, and I lean towards agreeing that QE exacerbated certain problems with the banking system (but I haven’t looked into it and my belief is only weakly held). I don’t see any of these claims as incompatible with the claim that QE was successful, because I understand the goal of QE to be to inject liquidity in the market in order to keep consumer interest rates low. It has done that, and even if the benefits have been unequally distributed, the result for the average American has been net positive.

Can you provide evidence or argument beyond “just wow” to contradict any of that?

Reminder:

When people are suckered into a $600,000 mortgage on a $300,000 house, and after they spend 25 years paying it down by half, they still do not own the house.

That’s where America is at right now. The country doesn’t even own its own assets. The banks do.

How much actual wealth do Americans even own, as a percentage of the national debt and GDP??? What I mean, how many American assets are paid-off and not in debt?

25% maybe??? I think I’m being generous in this estimation.

Reminder:

A college education is not an asset. It is not a real value. It is not materialized. It is not a thing. And in most cases, you cannot resell it.

And why are we charging American youth to be educated in the first place? Isn’t it an obligation of parents, of teachers, of professors, of society, to educate their youth for free?

It’s like a parent charging his or her biological child rent after 18 years, for being born. “I brought you into this world, but you owe me $500 rent per month, for 18 years.”

Fucked. Up. You people are sick, and make me sick.

You owe me $100,000 for being born.

What kind of interest should we tack onto that? 25%?

You owe me $125,000 for being born. Fuck you, pay me.

…doesn’t sound like a “free society” to me? Just a society of fraud and selling each other out. A disloyal nation.

Yeah Ur, it is very sickening. Leftist ideology has cancer-ravaged the morality of the west. We now use something as valuable and wonderous as education or owning your own home and land as an excuse to force permanent debt-slavery on each other. And most people don’t even bat an eye, they don’t even see the utter irrationality and immorality, the pure insanity, of it all. What the fuck has become of us.

Carleas, I want to have direct talks about the truths here. I don’t want to merely form hypotheticals like this is an abstract academic jerk session, with no real consequences. If you believe QE is good, say so. If you believe QE is bad, say so. Then we can War the respective ideas and see which comes out on top.

And I missed if you responded to the article I posted about the Fed Reserve. We can’t talk about the housing bubble or the economy or jobs and wages or even QE and debt without also taking seriously and deeply about the Fed Reserve-- what is it, how does it operate, who owns it, what are its effects.

I already did, I posted not only some of my thoughts but also an article on the Fed Reserve and QE. If you could kindly reply to the substance of that article, we might start to get somewhere.

Here it is, sandiegofreepress.org/2014/07/d … int-money/

If there is any kind of solution or hope, then I guess it is familiarity. People need to begin to bond and care about each other, at least, enough to educate and provide care for each other. If it is only a nation of back-stabbing and throwing each-other a bus, then it is not a society at all. That is anti-society, anti-social. Families are defined by their ability to both care for their own young, and educate, which is implied by “caring”. It seems noxious and cancerous to me to demand debt from unborn nations, from future children.

However these are slave societies at the core. The goal is, specifically, to enslave the upcoming X amount of generations. The more generations ahead they can enslave, they will. This is not a “free” society.

Debt and freedom are antonyms.

Yes and that is another reason why generational debt is so dangerous. We all inherit a “debt” to the society and culture we are born into and that helps us grow up and educates us, but when that symbolic debt becomes literally $300,000 (your share of the national debt in the US, if you were born today) that is simply madness.

Anyone who can’t see how big government tyrannists want to enslave as many X future generations as possible, as you say, is simply not wanting to see the truth. I’m very tired of dealing with non-philosophers. People who do not want to think are the number one plague upon humanity. And then such people rise into positions of power, because power rather than truth is their god.

Hypotheticals help get at which truths matter. For example, the truth of whether QE was good depends on the baseline; we have to explore the hypothetical world in which we didn’t implement QE and think about how the world would have been different, in order to talk about the truth of what QE did. There’s no getting around the hypotheticals. That’s what I was doing when I used the hypothetical: asking Otto for what alternate reality he’s comparing against when he says QE wasn’t a success. If the recession is still ongoing in the alternate world, then QE was probably good, even if this world sucks.

I will, but I have to say that I resent it a bit. I’m having a conversation with you, not the author of this article. If you understand what the article is saying, it would be better that you present the ideas yourself in a way that directly responds to what I’ve said so far. I think you would agree that it would not be a good faith reply for me to just send you an article that takes the opposing position.

And it’s not even as though this article is more authoritative than you could be: it’s not a more trustworthy source than you are (if only because I’ve never heard of it), it’s written by a non-expert like us, and, where it cites references, they are popular articles, blog posts, and shaky sources like the conspiracist “Center for Research on Globalization”. That said, I’ll take factual claims as hypothetical until better supported, and take the arguments as saying, “if these things are true, then we should conclude”.

Moving on:

I agree with Lawrence’s claim in paragraph 2 that the rationale for QE was to lower interest rates, and in paragraph 5 that low interest rates stimulate the economy by making it easier to buy a home or car. I disagree, however, that this is somehow harmful to consumers. Cheap credit is valuable to the borrower. When you buy a $300k dollar house, you get $300k of value from that house from day 1. If you lower the down-payment and the mortgage interest, you make it cheaper to get that value. That’s a benefit to the person purchasing the home, even if they will owe money on it for the next 30 years.

And that lower cost ripples through the economy. Lower interest rates on small business loans mean lower operating costs of running a small business, which means lower overhead and lower prices for consumers. If people can get a car easier, they can access a larger job market, they may spend less time commuting (depending on how they were getting around before). People who already own houses see their home value increase, meaning they can refinance at take advantage of lower rates as well. Home sales mean work for laborers. Etc. etc.

Credit is valuable, so conceding that credit gets to consumers (as Lawrence does) is the same as acknowledging that QE is putting money in consumers’ pockets (contrary to what Lawrence says in paragraph 4, and again in paragraph 13). Lawrence treats the financial as though it’s part of a completely different economy, as opposed to a part of the same economy that the average consumer experiences and buys from and is employed by.

And I’ll agree that it isn’t ideal, but that isn’t the same as saying that it isn’t effective. Lawrence concedes that it is buoying home prices. It’s doing that by stabilizing the prices of mortgage backed securities, i.e. giving money to banks, but the effect is also to stabilize home prices and prevent more people from being underwater and foreclosing. Lawrence seems to acknowledge the vicious nature of the problem in paragraph 17, where he points out that decreasing consumption would be bad for everyone. If that’s true, and QE is currently preventing that from happening, that seems like a concession that QE is better than the alternative for everyone, not just for bankers and the rich.

It is not inconsistent to claim that this program benefits the wealthy, even that it benefits the wealthy more than it should, that in increases inequality, and yet that it is better than the alternative (because the alternative was really, really bad).

Much of the article is apocalyptically speculative (e.g. paragraphs 21-26). The claim that the Fed will never remove debts from its balance sheet (paragraph [size=100]8[/size]) is unfounded, even assuming that his numbers are right. The program began as a response to a recession, it was targeted at stabilizing the market. It has been less than a decade since everything went to shit, and it’s unreasonable to judge the long term future of a program based on what has been done during and immediately following a recession. An alternative prediction is that the program will continue until the economy is strong, and the Fed will continue to taper and slowly raise rates to prevent the economy from overheating, and do it gradually enough so that there is no major shock to the economy along the way.

And the suggestion that a public bank, run by the people who currently run the federal government, would be better than an independent, apolitical Fed is at best uncertain. There are problems with the structure of the Fed, but so too are there problems in every branch of government, and making the central bank subject to the political whims of Congress does not seem like an obvious solution to making it a more just and equitable body.

Handing more money and power to banks is not a wise investment in the long-run as banks are private institutions and beholden to share-holders, not the general public, and not the american people. During the 2008 housing market bubble crash, the Government should have stepped in and seized at least one major bank if not more. They sort of did, but didn’t have the balls to do so at the time. Instead they worked out “deals” behind closed doors, which the general public never heard much about.

And people doubt and distrust the Federal Reserve Bank, sometimes for good reason, although the average consumer doesn’t understand macro-economics or the exact role of the Fed.

My point is that many of the deals are not made in the interest of average joe-schmo, but rather to add a million dollar to the bank account of private share-holders.

However that may very well be “the way of the world”.

K: it seem that you are demanding something from others that you are not demanding of yourself…
you call for caring about others… yet your words certainly aren’t about caring about others…
everyone else is wrong but you…you have shown no compassion of any kind for anyone…
everyone is naïve and a simpleton but not you…your philosophy seems to be…
do as I say, not as I do… and this is common in right wing types…holding everyone else
accountable but not themselves…want examples, see any GOP politician like 45 or Bush jr.
Ryan or McConnell or Pence…they all want to hold everyone accountable but themselves…

Look in the mirror before you accuse everyone else of being damaging…

What have you done to improve or help society?

Kropotkin

The recession is still ongoing.

And I didn’t mean we shouldn’t think hypothetically. I meant that we shouldn’t only think like that, without ever positing our thought to and in the real world and thus coming to real, definitive conclusions.

I did offer some of my thoughts on the issue. But use of supporting text and points made by others isn’t forbidden. I agree the article I posted is long; I’m not asking you to write an essay response to the article, but merely to understand what it, and I, have said on the subject and then formulate a sufficient reply with all that in mind.

I would welcome if you provide supporting text or points made by others.

Not if the housing market is artificially inflated and the house is actually only worth $100,000. Also, cheap interest rates are only good while they are still cheap… variable rates means that when those (artificially, because propped up by massive debt-buying by the Fed) low rates go up, you get screwed. Which is exactly what happened.

Interest rates should reflect the real market reality and value of credit, just as the price of products should also reflect the real market reality and value. When the Fed or anyone else deliberately externally messes with that reality, as they are doing, you introduce error and irrationality into the system that will eventually have to be corrected for.

Not if they owe more than the actual monetary value of the house itself. In that case, they go bankrupt and get evicted. Again, which is exactly what happened.

Yes, lower interest rates on credit borrowing are good as you say, but only if those rates are real reflections of the markets.

Actually it is putting debt into their pockets, not money.

Getting a loan for a house, car or credit card isn’t “getting money”, because you didn’t gain any money at all, you have to pay it back so it equalizes out, actually since you have to pay it back with interest you end up with less money than when you started. Except of course if the assets you purchase with the debt appreciate more than the interest cost of the debt you used to buy those assets.

I don’t see that, because he is treating the situation more broadly than you are. You’re ignoring the depreciation of housing value, and you’re ignoring the eventual market corrections that must take place when interest rates are pushed artificially lower than they otherwise would be. The housing boom may have put more people in homes, but only for a while, until the market (partially) corrected and forced millions of people out of those very same homes.

Consumption on perpetual debt is worse than a little less but more rational, sustainable consumption. Your logic seems to be implying that debt is the engine to prosperity and there are no limits to how much we should inject more debt into the economy and people’s lives, as if there are no serious problems with that.

I don’t believe the government or the Fed (the Fed isn’t part of the government) should be trying to “get more people into houses” or pushing more cheap credit on people. That’s another artificial manipulation introducing errors that eventually have to be painfully corrected.

If you can work hard and afford a house on the rea market then great. If not, then you get to rent and work harder to eventually afford a house. That’s the way it should work.

What alternative is that, which is so much worse?

The economy isn’t getting stronger and isn’t going to. As soon as it starts to increase a little then the Fed raises interest which pushes the economy back down again; and if the Fed ever sells its assets, even slowly over time, that will push the economy even further down. It’s a vicious circle we are trapped in, because the government and the Fed didn’t allow market corrections to take place for the insane policies that led to the 2007-08 crisis in the first place, those insane policies being namely artificially cheap credit and market manipulations, exactly what the Fed is still doing.

The Fed isn’t a branch of the government. It is a private corporation owned by, literally, the major private banks. Every dollar you have says “Federal Reserve note”, which means it isn’t US property or US treasury issued currency, it isn’t owned by the American people or even just by the government in abstract, it is owned by a private corporation which in turn is owned by the banks. These are just facts.

I appreciate your response, though. Hopefully this conversation can continue.

I think there are psychological factors to take into account. There is simply always going to be the driving force behind capitalism, which is the desire for surplus, for increasing profit, for that upward curve that replaces capital with capital growth as the relevant commodity. Capitalism is ownership to the second, third powers. This is what makes it inaccessible to common sense, the calculus is too counterintuitive. And for this reason the higher regions are populated with very strange thinkers without much ties to the rest of the world. In this realm, really very strange laws apply. Much of what comes crashing down has been built up precisely for it to come crashing, because this is a way to secure future growth. Disaster guarantees growth. But the only rule is to get all the assets sold before the disaster strikes, meaning that all the assets are always sold in the end, so that there is an end - it is like a convoluting patient, because there is no supervision of that organ, that is not really connected to the human body so to speak, the financial institutions aren’t tied to an earthly logic of value. Nor does VO offer such a logic, but this notion of the “earth-particle” might - what is at stake here is the measure of value-as-such, which is entirely fictive, but as Carleas remarks, this is not the issue, the issue is the direction in which the fiction leads human effort. So our value-as-such must be calibrated to what we consider human effort to be worth; and this is what Marx tried to do and failed, so that leaves us with the option of just giving up all this attempting to philosophically regulate capitalism.

Sorry for the delay, there’s a lot to cover.

First, a point of agreement, which will hopefully help us bridge the gap on those points where we disagree:

I agree with this way of thinking. It’s dangerous to distort markets, and you will often end up with worse outcomes than those you’re trying to avoid. I think we agree that the government directly subsidizing home loans was a big part of what got us into the recession in the first place. Where we disagree, though, is that I’d argue that where we’ve been messing with market pricing for a generation, we shouldn’t just up and stop all at once (I think that’s the idea of the “taper”). It seems like you are more willing to pull the plug.

A couple factual points (may be semantic points, we’ll see):

This depends on what we mean by recession, but it seems accepted that in the US the recession ended in 2009. From wiki:

Note that the recession is defined by reference to rate of growth, so that it ends at the bottom of the trough, i.e. the recession is over when things stop getting worse , even if they haven’t gotten better yet.

This depends on what we mean by stronger, but GDP grown has been positive since 2010 according to the World Bank. The unemployment rate has also been falling steadily since 2010 – but see this similar chart showing fall in labor force participation rate, suggesting it might just be that people are giving up. But median household and family income are up since 2010, i.e. post-recession. I’d say improving conditions for the middle is a compelling indicator of a strengthening economy.

Zillow finds that home values have increased since the end of the recession.

When you ask what the alternative is that I mentioned, it would be the case where the trend lines in the linked charts didn’t recover in the late 00s/early 10s. I think QE played a role in stabilizing the market.

I don’t think that’s quite right. It was created by an act of Congress, its President is appointed by the US President, as are the members of the Board of Governors. It’s subject to GAO audit and certain government transparency requirements, and its structure and behavior can be changed by Congress. It isn’t funded by Congress, but it’s empowered by Congress, it reports to Congress, and it’s subject to Congress’ whims. All its earnings after expenses go to the US Treasury.

It’s not a “branch of government”, but it’s clearly not just another company either.

I think this is a core disagreement we have, but I don’t think it’s a matter of opinion or values so I’m not sure why we can’t find common ground.

It seems clear that getting an interest-free loan is effectively “getting money”, in the sense that it’s getting value that can pretty readily be converted into money over the term of the loan. If that’s true, then getting a loan at a below-market interest rate is also “getting money”, in that the difference between the market rate and the rate charged is again convertable to money; one way to think of it is as getting a market rate loan on a portion of the money, and a no-interest loan on the rest.

This is just describing the time value of money, that money now is worth more than money in the future. Lenders charge interest because money in the future is worth less than money now, so they want more money in the future in exchange for their money now. When the government subsidizes the exchange, when it provides consumers credit so that they can get money now and pay less than market rates for the privilege, they get value. That’s money in their pocket.

Which part of this is false?

Fixed Cross, I’m not that pessimistic. Rather, I think giving up on the idea of regulating capitalism is itself the wisest way to fix it. Capitalism does a lot of things well, and as Void notes (and I agree), interfering to correct it toward some supposed right answer is more likely to undermine it.

Regulation seems like a downstream solution to an upstream problem. If we’re putting facts that we don’t like into a system that processes information and allocates resources, we shouldn’t be surprised that it spits out answers we don’t like. Changing the system to get better answers isn’t going to change the facts, those should be addressed directly to the extent possible.

Tapering would have been fine. But now that the Fed owns 1/4 of the total US GDP in false value, it’s too late. Sometimes you have to pull the plug and clean up the mess.

The “growth” is artificial, and not even very strong at that. When the Fed artificially injects an extra 25% of the entire GDP into the economy you’re going to see at least “modest growth”. And indeed it has been modest.

What does it tell you when the US economy has been only growing at 1-2% a year despite that it was injected with an extra 25% of its own value?

The real unemployment was closer to 11% last year, I don’t know what the real unemployment is at the moment because I haven’t calculated it.

The official numbers aren’t right. As you allude to. Do this: take total US population, subtract people under 18 and over 65, subtract people with disabilities, and then divide out the total number of full time jobs in the US, to figure out unemployment and underemployment. Then add part time to full time and divide, to get total unemployment.

Housing value depreciated in 2008-09 causing mass foreclosures. Now the housing values are inflated up again because the housing bubble wasn’t allowed to actually pop. And current home prices aren’t as inflated as they were before the housing crisis hit simply because the bubble partly moved into the rental market.

It didn’t need to be stabilized, it needed to be allowed to go through a correction.

What I said is correct. The banks who own the stock of the Fed get paid dividends by the Fed. They also have voting rights.

Yes I know the Fed was created by legislation. It is a private company that was created by legislation and has some of its leadership appointed by the president and approved by Congress. But it’s still a private company. The Fed leadership aren’t government employees, and the government (or “the people”) do not own the money supply.

The Treasury is literally printing private currency and passing it off as government currency (which it isn’t).

I’m not taking about inflation, I’m talking about if I give you $1 and you have to pay me back $1.50 later, you didn’t actually gain anything in the future, unless you used that $1 to make more money than the $1.50 you end up paying me back.

For there to be more value gained, or at least more money, the US GDP would have to be its value plus $4 trillion plus the interest owed on that $4 trillion. Well actually that is just to break even. Has that been the case?

In 2008 real GDP was $14.8 trillion. In 2016 it was $16.6 trillion. So we’ve gained $1.8 trillion in GDP over the eight years of the Fed injecting $4 trillion into the economy.

Hm. Doesn’t add up, does it?

Couple of notes:

A “stagnant market” means one that its currency neither inflates nor deflates. The money stays a consistent, constant value. In 100 years in a stagnant market, a $100 bill is going to be $100, with the same value and purchasing power. It’s not until usury is introduced into a market that causes inflation. Inflation requires more money to be printed to account for the “imagined” gain on interest. For example if a person loans another $5000 with 10% interest then where does the extra $500 ultimately come from? It needs to be printed, eventually, otherwise the average value of a dollar goes down.

Assets, material goods, cars, appreciate or depreciate in value. Appreciation/Depreciation also affect inflation/deflation rates. If you live in a stagnant market, and the price of your home doubles, from $200,000 to $400,000 (maybe oil was found in your backyard), then where does that “imagined” extra value come from? It would need to be printed, again.

Stagnant markets are susceptible to fraud. Because usurers, money-lenders, creditors can make enormous profits off of giving people loans with average or high interest rates. Societies generally dislike usury practices (hence the main reason why jews are scapegoated) because they produce anti-social business relationships. Why should a person make money off of loans, except by the implication of distrust, that the loanee/borrower will not pay back the loan in full? Is it not the responsibility of the lender to simply say no to loaning money? Reality is not that simple or easy. People can be bullied or swindled out of money.

About employment, in my experiences, the u.s. is generally over-worked and over-employed. Most people I know work two jobs, or even three. Multiple part-time jobs is becoming more common, which is a problem. Corporations are shirking responsibilities by hiring somebody for less than X amount of hours per week, to push somebody into part-time status, so they do not deserve full time benefits. U.s. jobs, companies, and corporations are sticking it to the u.s. public.

The “11% unemployed” figure generally refers to handicapped people, mentally ill, homeless, and those on welfare which I would guess to be 6%. Some people abuse welfare. There are certain amounts of waste of federal money directed to aiding people.

Let me start here.

I give you $100 on the condition that you owe me $101 in 100 years. Have I made you better off? Take as a given that we’re at the beginning of the term and don’t know the future. I think the answer is clearly yes, because the expected return on $100 dollars is much greater than the <.01% annual return I would need to make money. We don’t know the future, but we have reasonable expectations about what will happen. When we should reasonably expect to be made better off by a loan, the present value of the loan is positive. That seems like the only way to meaningfully evaluate whether a loan at a below-market rate makes us better or worse off.

You seem to be taking starting loan value, comparing it to that value plus interest, and concluding that since the latter is larger, people are made worse off. There’s plenty of evidence that that’s not how loans are valued (e.g., what people are willing to pay in interest for a loan).

So a slow let down would be good when the alternative is a small correction, but bad when the alternative is a society upending crash? That doesn’t make sense. If the only thing we are going off of is the size of the misalignment, it seems larger misalignment is all the more reason to taper. I assume you will make the case that the larger the misalignment, the harder it is to effectively taper, i.e. the size of the misalignment and the ease/effectiveness of tapering are non-linearly correlated. Maybe, but higher costs can justify a harder path. This seems a very fact-based inquiry, do you agree?

There are a bunch of different definitions of unemployment, but they all show the same trend of decreasing unemployment post recession. If we’re interested in whether the economy is getting stronger, the trend matters more than the values.

This is a misleading (and arguably false) characterization. There are many ways in which the fed does not resemble a private company. It isn’t for profit. It is subject to direct, individual oversight by Congress and the GAO. For a normal company, if Congress passed a law disbanding the company, or changing its structure, or tying its hands, that would almost certainly be unconstitutional. For the Fed, it wouldn’t be. The Fed is both created by Congress and subject to Congressional management in ways that other companies aren’t and can’t be.

It’s not a private company in any ordinary sense. It’s much closer to an independent governmental agency than it is to a private company.

Upon reflection, I can’t recall why this is significant. What does a private-company-Fed get you? Different expectations about economic outcomes? Less reliable market indicators?

These are not factual statements. The value of the assets isn’t real except as they are presently valued. To call the housing market a “bubble” is just a prediction that values will fall in the future (and if you’re sure, you should bet on it). To say that growth is artificial is to say that a bunch of assets are mispriced, and the incomplete correction is a prediction too (and if you’re sure, you should bet on it).

But it’s also possible that housing values are actually around where they should be, that the correction that happened was right but that without QE they would have been underpriced due to a vicious cycle of bad debt causing foreclosure flooding the market with new properties causing more bad debt causing more foreclosure. And it’s possible that the interest rate we’re paying on debt is correct relative to the reliability of US Treasury Bonds. Treasury derivatives don’t seem to be predicting a major devaluation of US debt, so we can’t take that a given in this discussion.

But, if you’re sure, you should bet on it. Hell, buy on margin, if the expected return is as high as you seem to think. Why wouldn’t you?