Re:House Democrat's New Tax Plan Could Provide $2.9T in New ...
by angelzen on Monday September 13, 2021 @09:42PM
(#28519193)
I have already lived through a decade of (hyper)inflation in a different country. At the time the grassroots solution was to establish a shadow economy based on USD. I find it very interesting, in Chinese proverb kind of way, to see how the world will manage the destabilization of the USD that is already underway.
> What I don't quite understand is why don't they just print a few more trillions?
To a certain point, as the USD is the global currency, we can do that. (And we did during the corona pandemic.)
After that point, printing money causes people to lose confidence (since it's just paper, and not money) and find another currency. Then you can't print any more without causing the currency to devalue.
This would be very bad for 2 reasons:
1) As the global currency, the US benefits by about 1% to our economy. You could argue this pays for our military expenditures.
2) We would have to make debt payments to support the currency. After a certain point, that becomes impossible.
FYI: the CCP is trying to replace the USD, and will exploit weaknesses in how we manage the USD.
Maybe you're young, but I can remember 20% inflation/stagflation back in the day. It was a very uncomfortable feeling for people to lose control of the value of their savings and prices for imports. You want to avoid that at almost any effort.
Pundits for decades have said that the fundamental weakness of democracy is that voters can vote themselves free money. This is what the Biden administration is actually doing now.