Many wonder why the US, a big-time debtor, is considered a success and a safe haven for skittish investors. To unravel the mystery, we must first understand the role of debt, and not just in the US economy.
My article last month, "The incredible unsinkable American economy", presented historical and empirical data showing that the US economy has disproved predictions of its decline for my entire lifetime (70 years), and is today the world's most powerful economy.
This led my 94-year-old mother to ask: "I don't understand how the US can be called a success when it has such a huge debt. Can printing money make you really rich?" A 30-year-old friend asked: "I wonder if all this confidence to keep printing money is because the US dollar is still the default reserve currency", while a reader wrote in to The Straits Times opining that the US economy is "unsinkable" only because the country "can print fiat currency at will and spend as much as it can print".
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