I'd prefer to call the debt something like the national savings. Instead of just neutralizing the idea in people's minds, make it a positive association. Or maybe our national wealth. We're going to use our national wealth to fund the resources for x, y, z.
@11:30 I need Ryan go over that again. It's the spread rate that matters in *_real_* terms, no? So while you make more nominally at 7% above a risk free rate of 4%, compared to rfr=1%, that's only nominal. I mean, you are probably better off, but since the interest rate is effectively the inflation rate, you don't know how much better off in real terms until you spend it, so depends upon what prices are most inflation sensitive to the interest rate (in the MMT framework, won't make sense to others). Right? Note sure, since I don't manage funds I really don't know.
Hey Bijou, good question. Fund managers are generally judged based on nominal returns. The Sharpe ratio is the industry standard, which aims to be a measure of return per unit of risk (I have a LOT of reservations with the Sharpe ratio, mainly with the assumption that risk = volatility, but alas I don’t make the rules). See more on Sharpe here: www.investopedia.com/terms/s/sharperatio.asp#:~:text=Michela%20Buttignol-,What%20Is%20the%20Sharpe%20Ratio%3F,risk%2C%20rather%20than%20investing%20skill. You raise a good point, which is that the excess return is meaningless in real terms. My point is more so that it’s ridiculous we call low rates “loose” monetary policy, despite the fact that it’s the higher rates that enable nominally higher returns (with no change in credit risk).
