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I think that was the grandparent's point. The USG can always issue more currency and inflate away the value of its debt. Doing so is preferable to default (an
by nostrademons 6y ago
I think that was the grandparent's point. The USG can always issue more currency and inflate away the value of its debt. Doing so is preferable to default (and the fiscal & political crisis that would bring), and so they will. Thus, we're going to get more inflation.
- parasubvert 6y agoWe watched one of the US political parties threaten default at least three times in the past 12 years. I think creating political/fiscal crises is part of the point.
- frank2 6y agoI had no idea. Where can I learn more about this? Are you sure they threatened to default of _Treasury_ instruments?
- betterunix2 6y agoBasically it came down to a refusal to raise the debt ceiling, which forces the Treasury to take "extraordinary" measures to meet debt obligations. In several cases the Treasury was warning that they were running out of such measures and that if the debt ceiling was not raised there would be a default.
- parasubvert 6y agoYes. And while the mainstream view is that Ryan/Boehner never really intended to go through with it because they knew the consequences, a sizable contingent of congresspeople & conservative pundits wanted to go through with it just to show that "they meant business". https://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis https://en.wikipedia.org/wiki/United_States_debt-ceiling_cri... My perspective, when people tell you what they'll do, believe them. It would be economic equivalent to setting off a nuclear bomb in the middle of the country, but :shrug:, it would own the libs.
- betterunix2 6y agoThere was nearly a technical default just last year, and the US has actually defaulted on its debt in the past. Politicians do not always behave rationally.