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"Printing money inexorably leads to inflation" That's not true. Inflation could be though as a ratio between the money in circulation and the productivity in t
by RobertoG 9y ago
"Printing money inexorably leads to inflation"
That's not true. Inflation could be though as a ratio between the money in circulation and the productivity in the economy. If you increase both, numerator and denominator you don't get inflation.
Also, "printing money" doesn't create inflation. Spending it when there is not enough available resources can create inflation.
If you have doubts, check the QE programs of the FED and the ECB (ongoing).
In fact, the more famous episodes of hyperinflation are originated because a collapse in the productive economy (the denominator), and not because an increase in money (the numerator).
If real resources are increased, a 'space' is generated for spending, and it would be a real pity if that opportunity is wasted.
- gaius 9y agoSure, I should have been more precise. If the productivity in the real economy is growing then of course the money supply should increase to maintain the parity. But the context here is that holes in the budget don't matter because you can just print money to pay them off - yes technically you can, but not without consequences that may be worse than just biting the bullet!