Sam Seder's Dumbest Idea Ever: "Writing Off" The National Debt

This may be the most exemplary display of the Dunning-Kruger Effect ever.

It may be time for Sam Seder to stop "debating" (we use that word very loosely here) libertarians, because he's been saying things that are making him look completely idiotic.

We should preface this article by stating that the video clip we're referring to actually isn't new, yet somehow this shockingly exemplary display of the Dunning-Kruger Effect by Sam Seder on his own show somehow went unnoticed, and is way too absurd to not make fun of. So, here we are.

Economic genius Sam Seder has a plan that's going to rid the United States of its sovereign debt once and for all, without having any adverse effects on the economy whatsoever.

Sound a little too good to be true? Well hang on to your seats ladies and gents. because this is gonna be a crazy ride through the progressive insane asylum!

Libertarian Party Chair Nick Sarwark and Sam Seder began discussing the national debt with Sam Seder on The Majority Report with Sam Seder. Most of us that don't live in Candyland know that there are essentially three ways for a country to rid itself of sovereign debt: 1) pay it off through tax revenue, 2) print money to pay it off (highly inflationary), or 3) default on it. Well Sam Seder, who is significantly smarter than all of us, clued us in on a fourth option: we can just write it off! Of course! Why didn't anyone ever think of that before?! We can just write it off! We, as the American populous and the owners of the American federal government can just unilaterally declare, "Eh, we actually don't owe you that shit! Now, please, fuck right off!"

For those of you that believe we're being hyperbolic here, we hate to tell you, as much as we love hyperbole, you'd actually be wrong! These are not our words, but the exact words that came out of Sam Seder's own mouth!

Now to be clear, this moment of complete stupidity that will probably be unmatched by any progressive moron until the end of time, comes with one single (yet trivial) caveat. And we're not entirely sure why, but it seems based on the context of the discussion, Sam Seder believed up until the moment that he actually looked at a graph of who actually owns the national debt, that the United States federal government somehow owned all its own debt. Not kidding you - as if Sam Seder had no understanding of the way America's monetary system actually works. Forget about the Federal Reserve and how they actually have 100% of the control over monetary policy in this country, and buys and sells government debt in the open securities markets every single day. No! Sam Seder apparently believed, based on his response to Nick Sarwark, that the United States funded its operations literally by borrowing from itself. How this works without the United States federal government actually owning, operating, and printing the currency, and not the Fed doing all those things, seems impossible (and already pretty stupid and pie-in-sky anyway), but we digress. "We're a sovereign nation. We can print our own currency," claimed Sam Seder during the debate. No Sam, that's not the way it works. A privately-owned institution called the Federal Reserve gets to print the money that we're forced to use, and they also get to buy and sell debt to influence the broader economy, set interest rates in the "free" market, and do a bunch of other things that I (and it sounds like you too) believe they actually shouldn't be able to do. To be clear Sam, we'd actually love for you to be right. We'd love it if the American people, and not the banking cartel, owned the currency. We'd love for the government to have a fully-transparent process, and the documentation be easily obtainable by the public, as to how much money the government is printing at all times, exactly whom is purchasing our sovereign debt and how much, etc.. But in general, it's actually your side of the political spectrum that wants to keep the Fed in its place of autonomy over our currency, despite the fact that you clearly have no idea how the economy works.

The moment in the debate that Sam Seder's brain kicked into gear and he realized that the federal government actually doesn't own the vast majority of the sovereign debt was quite interesting. "The debt that we owe is really just to ourselves," Sam Seder believed, up until he saw the graph of who actually owns the debt. "We're not going to default on our sovereign debt," claimed Sam Seder. "We owe it to ourselves, we're not going to default." This is the pinnacle of the Dunning-Kruger Effect.

Before we go on, Sam, we need to explain two things to you briefly (since we know you do in fact read the articles we write about you). 1) We actually don't own the vast majority of our debt (as you seem to figure out yourself shortly after that short bout of idiocy left the hole in your face) and 2) there currently doesn't even exist a legal process that the federal government can just "write off" its debt to anyone, including itself. When debt is purchased, it comes with a contractual obligation that the debt will be paid off. Period. You know, contracts, that thing you studied in law school? Maybe you skipped that class.

"The vast majority [of bonds] are owned by the U.S. government!" Sam Seder exclaims with the utmost confidence imaginable during the segment. Who the fuck told him this shit? We're currently rewatching this segment as we write this article and Sam Seder's dumbfounding level of ignorance on this subject is jaw-dropping.

Seder then orders his producer to bring up a graph of the United States sovereign debt. He seemed confused as he read the graph out lout, stating at the time, the U.S. government only owned 27% of the sovereign debt (he rounded up to thirty to make himself look less stupid; we'll give him a pass there). "Assuming China is the biggest holder of our debt, uhh-err, it's not gonna be more than like 10-15%. So the 30%, the 5.73 trillion held by the U.S. government? Guess what? U.S. government's gonna be fine - we can, uh, we can print our own money so we don't need the money we owe ourselves, we've borrowed," Sam Seder claims with more of his misplaced sense of confidence in his knowledge of economics. As we stated above, there is no legal process whatsoever for the government to just "write off" its own debt - what Sam Seder is actually talking about here is defaulting on it, which if that's what he wants, he should just say, instead of creating fictitious concepts in his imagination like "writing off debt." (On a side note, even if the U.S. government were to miraculously create a law that stated we could just write off only intragovernmental debt and no other debt - which of course it never would - this would obviously still be viewed as a de facto default by private investors, foreign governments and countries, Fitch Ratings, Moody's Investors Service, and S&P Global Ratings, and the IMF)

"We [wouldn't be] inflating our way out of sovereign debt," claims Sam Seder smugly, "we can just write it off!"

The dumbest statement ever made by any political commentator, anywhere, ever.

Sam, let's just assume, for the sake of argument, that everything we've said up until this point isn't true (it is - we're absolutely right and you're embarrassingly wrong on your assessment of this issue, but let's just assume that for the sake of argument). Let's just say we did write off what was 27% of the national debt (and now it's rapidly approaching 20%, if we haven't already passed that). What are we going to do about the other 73% of our national debt? Do you think we can just write that off, too??!! What about all the debt we owe to domestic private investors? Do you just wanna say "fuck 'em" and not pay them back?!? What about the debt we owe to foreign governments, including China, and all the other ones?!?!  Methinks you might just be over-estimating the strength of our military, sir.

We'd put off writing this article in hopes that we'd eventually get a response from Seder when we reached out to him over... and over... and over... and over again for comment. We even posted one of our asks right in one of his Twitter threads in which he was talking about, you guessed it, Dave Rubin of course (whom nobody cares about). We suppose diverting his audience's attention from Seder's own ignorance of basic economics to Dave Rubin, he believes, will buy his channel some more time (it's surprising his channel lasted this long, as the view counts on his videos usually don't even crack more than 5% of his entire follower count). But alas, Seder never responded to any of our requests to comment, or elaborate, on even what he actually meant by "writing off" national debt.

As always, we've taken the liberty of time-stamping the clip and embedding it below, so you can jump right to the action. And Sam, if you're reading this, put down your 20 copies of The Deficit Myth by Stephanie Kelton, and go read a real economics book - one that hasn't been deposited in the ten cent bin at your local Goodwill, please.