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Somehow I managed to skip a word when I wrote the comment. It should have been “a government can print money to pay its debts exactly once.”

Obviously governments can pay off debts as often as they want, and there was a time when that was common. But a government that runs up big debts and pays them by making the currency worthless soon has a hard time finding anyone willing to lend it money.

But sometimes they manage. Russia is notorious for defaulting on its debts (which isn’t the same thing as paying with devalued currency, but should be a lesson to future lenders), but they still manage to borrow money. But they do have to pay higher interest rates than other countries to make up for the higher risk of default.

Yeah, the fatal assumption there was assuming that they need to have money lent to them.

As I said, it doesn't really make sense to think of the national debt as a debt. It's a government run savings account accommodating the private sector's desire to save money.

In the same way if maxlybbert printed maxlybbert dollars, spent them and then "borrowed" them back it wouldn't really be doing it because he actually needed them. He's providing a service.

I’m only focusing on the fact that a nation that prints its own money can end up printing too much and devaluing it. And when a country shows its printing presses are controlled by people who have no clue what they’re doing, people tend to stop buying their bonds.

I don’t really care whether it’s truly borrowing when a country sells bonds and promises to pay the bondholders back with interest. As long as the country feels it has an obligation to pay those bondholders, it has a temptation to pay them with devalued currency. Most countries don’t do that because they expect few people will buy bonds the next time the government wants to sell some.

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