Now, that title above is not mine. I borrowed it from a self-named "Christian Economist" because I thought the title fit the article perfectly - much better than he knew. Alex Binder wrote on monetary policy, a couple years ago, here.
Let's jump right into the insanity:
The government can simply print more money to pay any debts it has promised to anyone...[snip]...And all of it would be needless because we are not USERs of our own currency, we are ISSUERS.
Almost too ironic for words is this passage:
They are the monopoly issuer of the U.S. dollar and can thus pay any debts denominated in U.S. dollars. In this way we are not like Greece.
No, we are NOT like Greece. If Alex gets his way, we are like the Weimar Republic of 1923. But who's counting? Not other countries, apparently.
And then there's this little counterintuitive nugget:
The only way to reduce the deficit is to grow the economy by increasing the deficit now and letting it decrease later.
I like that nice, vague, nebulous "letting it decrease later." Hopefully, much later, like after the dollar itself becomes worthless and we repudiate all debts in dollars. That's when the deficit can "be decreased".
I would say this in response: a non-hard currency, such as paper, can only obtain in a context of a society that USED TO have rules that sprang from a hard currency, and which still retains something of those rules and the expectations that derived from them. You could never start an economy off from scratch with such a thing. As such, a paper money of necessity borrows off the social capital of the prior currency - which had to work according to rules and built up common expectations. To "play the game" of monetary policy in a way that denies the underlying meaning of those old rules absolutely guarantees that eventually the expectations will cease to apply. Then people will change the game to one that DOES observe rules. One of the classic ones is pulling a gun and shooting the cheater - that new "game" of guns has rules that don't depend on whether you want or like bullets, the bullets fly just fine whatever accounting tricks you have up your sleeve. Selling paper debt to foreign countries on the (later) public policy that you will print empty money for to pay it off is to repudiate the premises and rules that obtained within the underlying context of the loans. People will only stand for it as long as the policy of printing empty paper is restrained by the old expectations and rules. As soon as you publicly and officially repudiate not only the hard standard but also the entirety of the rules that it worked with, you are basically saying "no rules anymore" and you no longer have a currency, you have a bunch of odd paper that people use for lighting cigars.
The rest of the world is already tiring of supporting our higher standard of living with their work. They will eventually see empty dollars as a symptom of American arrogance and greed, and simply stop taking it. The only thing stopping it so far is the very convincing story "no, the emperor really DOES have clothes, they are just invisible. But the economist / tailors who made them have special eye glasses that enable them to see about 20-800 in hindsight."