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That is correct. Inflation reduces existing debt. The problem is we continue to issue new and more debt at higher rates so the total amount still only goes up.
by bern4444 4y ago
That is correct. Inflation reduces existing debt.
The problem is we continue to issue new and more debt at higher rates so the total amount still only goes up.
- CydeWeys 4y agoYes, the total amount may go up in nominal terms, but it's not going up in real terms if inflation is eroding it faster than new debt is being issued. If the value of the dollar halves in a decade but the debt only goes up to, say, $50T, then the total national debt in real terms has gone down significantly.
- bern4444 4y ago> if inflation is eroding it faster than new debt is being issued. I would be interested to know of a time when inflation was higher than the rate of new debt being issues in the US. Maybe in the 70s when inflation hit record highs but interest rates also hit record highs at that time.
- MuffinFlavored 4y agoIs there a way to calculate like... the debt but in "inflation adjusted" dollars?
- bern4444 4y agoThe debt level is reported accounting for inflation. https://www.usdebtclock.org/ https://www.usdebtclock.org/
- MuffinFlavored 4y agoWhich field? The $31t national debt dollar field? I thought that was un-inflation adjusted dollars?
- bern4444 4y agoThe national debt field. I believe it is inflation adjusted and if the US were to 'magically' create a coin worth 31 trillion dollars, that number would go to 0 and we would be able to pay off the entire thing. There would be no more interest payments because there's no more debt to pay interest on. Except for the fact that we still run a deficit so itd start going back up again.
- MuffinFlavored 4y ago> I believe it is inflation adjusted I believe it isn't.