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> There is zero chance that this debt gets paid off without massive inflation. Zero. Paying off this debt would be deflationary.
by tengbretson 3y ago
> There is zero chance that this debt gets paid off without massive inflation. Zero.
Paying off this debt would be deflationary.
- hellojesus 3y agoMaybe. If the US taxed ita citizens to pay the debt without printing, it would be quite deflationary. Consumer spending power would crumble and so would general demand. However the US doesn't seem to have the appetite for taxation and is instead printing new money to pay its debt. That is inflationary by definition: they are litetally inflating the money supply. This is what I see as the more likely case.
- tengbretson 3y agoThe addition to the money supply that debt represents has presumably already happened, so wiping it out with newly minted dollars should have a neutral effect. In practice, though, I suppose this would immediately be followed by a spending spree of new debt, like a boomer that just paid off their seadoo, so on the whole I suppose youre probably right.