You are pivoting. The topic is on printing money and who ultimately holds those treasuries. It's the common man. 3 choices: responsible budgeting to spend what you earn backed by productivity growth and work, inflation and eroding wealth in the long term, or wiping out all treasury holders. The latter virtually guarantees an end to democracy.
A main claim of MMT economists is that the Treasury and Fed can be consolidated, i.e., the Fed and the Treasury become "Fed-Treasury", so to speak, for the purpose of understanding the overall, government money operation. If this is an invalid assumption, then much, if not all, of their claims must be rejected. What is at the bottom of this MMT assumption, I believe, is that all Fed profits flow directly back to the Treasury. So when a Treasury security held on the Fed balance sheet matures, any profits relative to Fed expenses, which would take into account what the Fed paid for the security when acquired, would go right back to Treasury. Recognition of this reveals that Fed and Treasury, in considering the government's overall money operation, can be consolidated. And that's what MMT economists do, they consolidate these two parts of government.
Responsible budgeting does't work for any state unless there is an external constraint, i.e. inability to borrow domestically or internationally. Even if a country does "responsible budgeting", the surplus must go somewhere, infrastructure spending, scientific researches, to name two. At best you can hope is a balanced budget in the constitution. Inflation is better than deflation, that has been proven by the Japanese, losing 3 decades and folks don't want to spend. Democracy has nothing to do with monetary policy, ask the Greek. Now the real question is, how to you create money out of nothing? You can print money and put everything into a sovereign fund to participate "profit sharing" in every economic activities as shareholder, recycle all surplus back to this sovereign fund, the extreme case of communism. No state liabiliies column, all are assets. Alternatively you can print money and lend to economic participants, hence the debt issuance.
They are correct in the sense of they are all G.I.s. Independent Fed is a mirage. Fed is the buyer of last resort but essentially they are part of US government. If the foreign countries decided to dump all treasury holdings, who is the buyer? St Louise Fed published a paper of on Open Market Operations, before MMT crowd. The opponents of MMT argue that Fed's mandates are just two, price stability and emplyment. Saving the goverment is not part of their job, which I agree. That is the function of the congress.
I have just been to Japan 2 weeks ago. Many speak of the damage done to Japan due to deflation. Neither innovation nor the countries ability to be productive has suffered in the past 3 decades. Consumables are more affordable now in Japan than in Canada or the US. Ordinary people are doing just fine and large conglomerates have hardly suffered as well. The real estate market is so attractive that Japan has put up limitations of how much outside investors can buy up, resulting in a way healthier property market as well. The default and demise of JGB have been predicted by outsiders for 2 decades now. Yet none of that has happened. In fact Japan would stand on even better grounds if it had spent and borrowed less. The aging problem is greatly overstated. It's just in the cities that birth rates are dropping. There are tons of families with 2 kids or so in tier 2 or 3 cities and the country side. Japan will do just fine as it has always done due to its work ethics and absence of woke policies.
re: absence of woke policies Wake up, America The stock market is 50% above its low in dollar terms - EWJ
We have no one in office at the moment that can manage a crisis. We voted in a dementia patient. They create more problems than anything. Be it financial or otherwise. It's scary for a lot of people because when the shoe drops on this economy we are going to be in a lot of pain.
Guess I should have said yes they are separate but no they are not unrelated. But also the point I was trying to make is long term Debt is always important, deficits only sometimes.