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Agreed 100%. I don't mean to imply that we should just arbitrarily add to the debt; my intent was just to point out the fallacy of the "sky is falling" type of

by jgeada 11y ago

Agreed 100%. I don't mean to imply that we should just arbitrarily add to the debt; my intent was just to point out the fallacy of the "sky is falling" type of argument around our debt. Historically, however, inflating ones way out of debt has been common. Additionally, the USA is unusual in that it is possibly the only economic powerhouse that is largely self-sufficient in most regards (raw materials, people, etc). We import most goods because they are more convenient, slightly cheaper or more tax advantageous to source elsewhere, not because we have to. One of the reasons the USA has tended to an isolationist attitude is because it could do so without much consequence. The world has much more to lose than we do should we should to inflate our way out of debt.

chimeracoder 11y ago
> The USA is unusual in that it is possibly the only economic powerhouse that is largely self-sufficient in most regards Hardly - the US could not maintain its current economy and standard-of-living as an autarky. The US is only able to maintain its current standard-of-living because of the massive amounts of work being down outside the country. Manufacturing in China is an easy example, but not the only one. > The world has much more to lose than we do should we should to inflate our way out of debt. Not really. Through a number of effects (both direct and indirect), if we were to try and inflate our way out of debt of this magnitude, we would tank our economy in the short- and medium-term, just the same way Germany, Zimbabwe, and Thailand did[0]. Those economies did recover in the longer run, but not without serious repercussions in between, and it can literally take multiple generations just to get back to the starting point, to say nothing of recovering the same global standing. There is no way the US would want to regress to the sort of economy that this would involve. It would be a total economic disaster. [0] This would be true even before we took into account the effect of no longer being the de facto global reserve currency (which would no longer be the case if we started printing hyperinflation-levels of money).

by jgeada 11y ago

chimeracoder 11y ago

> The USA is unusual in that it is possibly the only economic powerhouse that is largely self-sufficient in most regards Hardly - the US could not maintain its current economy and standard-of-living as an autarky. The US is only able to maintain its current standard-of-living because of the massive amounts of work being down outside the country. Manufacturing in China is an easy example, but not the only one. > The world has much more to lose than we do should we should to inflate our way out of debt. Not really. Through a number of effects (both direct and indirect), if we were to try and inflate our way out of debt of this magnitude, we would tank our economy in the short- and medium-term, just the same way Germany, Zimbabwe, and Thailand did[0]. Those economies did recover in the longer run, but not without serious repercussions in between, and it can literally take multiple generations just to get back to the starting point, to say nothing of recovering the same global standing. There is no way the US would want to regress to the sort of economy that this would involve. It would be a total economic disaster. [0] This would be true even before we took into account the effect of no longer being the de facto global reserve currency (which would no longer be the case if we started printing hyperinflation-levels of money).