3 ms·

I might be naive here but I suspect the Fed will just print money and hand it to the govt which will keep the can rolling ahead. Devaluation seems the only rig

• AnimalMuppet 8y ago
  That's not the right answer at all. It has been tried several times, and it usually (always?) ends in disaster. The problem is that printing money and handing it to the government causes inflation. This is essentially the same as devaluation, as you said, except for one difference: devaluation is a one-time event, whereas inflation tends to not be. In particular, next year the government is also going to need money to keep Social Security running. But it's going to need more, because of this year's inflation. And there's going to be all the people further in poverty because of this year's inflation, so other government expenses go up. So the Fed has to print more money next year. So next year's inflation is worse than this year's. So the year after that, the Fed has to print even more money...