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There’s something that a lot of people get wrong about inflation. What you have to keep in mind is that the debt is in US dollars. So, while printing money an
by fallingfrog 3y ago
There’s something that a lot of people get wrong about inflation.
What you have to keep in mind is that the debt is in US dollars. So, while printing money and causing inflation to pay the debt sucks, it won’t cause a Weimar Germany situation. that only happens when the debt is in an external currency. When you inflate your currency and the debt is in your currency, it becomes easier to pay as the currency inflates. But when it’s in a foreign currency, the exchange rate tanks, and so the more money you print, the more the debt appears to increase. So you then need to print more money faster and faster to continue to make the payments.
A government would only do this under threat of attack or if they thought someone would organize a coup against their government if they failed to pay. That was the exact situation in Venezuela, for instance, which is why they kept printing money to make the payments on their imf loans.
But for us, it might suck, but the economy won’t collapse.