Wouldn't the more relevant point of comparison be the difference between long-term government bonds. The exorbitant privilege is that it's easier to fund US government debt because trade in USD means that large institutions around the world need USD and store those dollars in the form of US treasuries, which in turn lead to lower bond rates and cheaper debt.

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rayiner 9 hours ago | parent [-]

What we care about at the end of the day is bottom line economic growth, specifically GDP per capita growth. Whether government debt is more or less expensive is a collateral matter. It just means you need to make different choices in taxation versus borrowing—as long as the end result is the same how does it matter?

	▲	stbede 6 hours ago \| parent \| next [-]
		What we care about and what the exorbitant privilege is referring to can be different things.
	▲	toomuchtodo 8 hours ago \| parent \| prev [-]
		Cost of capital is a direct input to growth (from both investment and consumption). The more expensive it is to borrow, the lower future growth is, and the cost to borrow is increasing. This means taxation must go up if you want higher potential future growth through reduced cost of capital. Bond yields go up (ie government debt)->consumer debt costs and cost of capital for business investment goes up (all consumer debt is priced off of "risk free" gov debt)->consumption slows->growth is reduced