8 ms·

Exactly. Continuous inflation is frankly the only plan the government has to deal with the national debt. Borrow now, and in the future when your currency is we

Exactly. Continuous inflation is frankly the only plan the government has to deal with the national debt. Borrow now, and in the future when your currency is weaker and less valuable, the amount borrowed will seem smaller (and in pragmatic terms will be by that point). Of course it's destructive to the average person / taxpayer, but who cares about them? Nobody does who's in charge, that's for sure.

jowiar 13y ago
I think you may have this flipped. Inflation is, more than anything else, a tax on cash (and last time I checked, your average person didn't have a whole lot of cash on hand). Practically speaking, it helps debtors at the expense of creditors by shrinking the value of liabilities on the books. The debt hysteria we see isn't because the elite don't care enough about inflation - it's because the costs of it fall more heavily on those who write big checks to political campaigns.
- jswinghammer 13y ago
  Most of the elites spend their money on buying more influence. They hold debt instead of cash if they hold anything at all outside of whatever they consider to be balanced portfolio.
GeneralMayhem 13y ago
Except the average person sees the exact same benefit, ideally. It's the same platform William Jennings Bryan campaigned on way back in 1896 - expanding currency helps people who have debt. Inflation makes the past matter less. It erodes both the wealth of the super-rich and the debt of everyone else (the farmers who had to mortgage their farms in 1896; the normal family now who has a home mortgage as the norm). That's very attractive to a lot of people, not just those managing the national debt.
- jswinghammer 13y ago
  The basic problem is that you're playing the devil's game when it comes to debt. You might think you are getting the upper hand but the house always wins. The banks always win in this scenario because they get bailed out when they lose and they collect your interest when you "win". It becomes difficult to see how this scenario helps the common man.
nerfhammer 13y ago
Economic growth is the only plan to deal with the debt. If your debt financing costs you 1% of GDP/year but your GDP grows at 3%/year eventually the debt will become insignificant vs. GDP even if it is never paid off.

jowiar 13y ago

I think you may have this flipped. Inflation is, more than anything else, a tax on cash (and last time I checked, your average person didn't have a whole lot of cash on hand). Practically speaking, it helps debtors at the expense of creditors by shrinking the value of liabilities on the books. The debt hysteria we see isn't because the elite don't care enough about inflation - it's because the costs of it fall more heavily on those who write big checks to political campaigns.

jswinghammer 13y ago
Most of the elites spend their money on buying more influence. They hold debt instead of cash if they hold anything at all outside of whatever they consider to be balanced portfolio.

GeneralMayhem 13y ago

Except the average person sees the exact same benefit, ideally. It's the same platform William Jennings Bryan campaigned on way back in 1896 - expanding currency helps people who have debt. Inflation makes the past matter less. It erodes both the wealth of the super-rich and the debt of everyone else (the farmers who had to mortgage their farms in 1896; the normal family now who has a home mortgage as the norm). That's very attractive to a lot of people, not just those managing the national debt.

jswinghammer 13y ago
The basic problem is that you're playing the devil's game when it comes to debt. You might think you are getting the upper hand but the house always wins. The banks always win in this scenario because they get bailed out when they lose and they collect your interest when you "win". It becomes difficult to see how this scenario helps the common man.

nerfhammer 13y ago

Economic growth is the only plan to deal with the debt. If your debt financing costs you 1% of GDP/year but your GDP grows at 3%/year eventually the debt will become insignificant vs. GDP even if it is never paid off.