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Many problems aside, they could just print or give money.
by dillondoyle 4y ago
Many problems aside, they could just print or give money.
- adam_arthur 4y agoYeah, check with South America on how that works out. It can be done to a certain extent, but obviously these aren't cost free solutions.
- bilbo0s 4y agoSouth Am governments are dependent on banks in other parts of the world. The Chinese government is not. There's just some realities about global economics. Uruguay, Portugal, or Rwanda default, then they have a problem. China or US has the same issues, and it's just not the same kind of problem. They would just redefine things so that they don't default and then call the whole thing a "bailout". I'm not ragging on south americans or africans or portuguese, I'm just stating facts. It's not fair, but that's how the global system works. You do business with China or the US, you find out fairly early on that even in a crisis, it's their way or the highway.
- adam_arthur 4y agoYou don't seem to understand that it's not that simple. If the trail of dependencies in the system is deep and highly leveraged, it doesn't matter if the government "wills" it to be one way or the other. Economies and companies are highly interconnected. There is no magic wand to fix the problem without serious repercussions, even with an authoritarian government. You wipe out USD debt holders, they will never lend to your companies again. You print money to pay off debts, you get inflation, weaker currency and potentially other destabilizing outcomes, like moral hazard of private sector expecting bailouts. All debt problems can be solved via arbitrarily high inflation, yes. But it's also the setup for mass suffering and potentially revolution.