Since the dollar is an entirely Fiat currency, its supply is dictated purely at the whim of the U.S. Government. This means that they can turn on the presses (

Since the dollar is an entirely Fiat currency, its supply is dictated purely at the whim of the U.S. Government. This means that they can turn on the presses (or these days, make some keystrokes) and instantly have as much money as they want. Because of this, if there are outstanding debts that are denominated in USD, the government will always be able to have that money on hand, or create it. The problem is that this puts more dollars out in the world. And if there are more dollars in circulation, everyone (on average) has a little bit more they can "bid" on consumer goods. Because of the law of supply and demand, things inflate in price.