Re:Money Creation in the Modern Economy
by csomar on Sunday January 15, 2023 @09:18AM
(#34389547)
Theoretically, yes. Technically, however, these people are getting bailed out. That makes inflation. The government still have to pay for the debt, but it seems like it’s not happening anytime soon (the debt ceiling just keep getting higher and higher).
US government debt is around 31.5 Trillion $$ at the moment. If the US government were to pay its debt today, all that liquidity will be removed from the market and this will have enormous deflationary pressures.
In the same way for private individuals, if you can always keep renewing your debt and pricing your assets higher (a bubble would help), you’d create inflation.
US government debt is around 31.5 Trillion $$ at the moment. If the US government were to pay its debt today, all that liquidity will be removed from the market and this will have enormous deflationary pressures.
In the same way for private individuals, if you can always keep renewing your debt and pricing your assets higher (a bubble would help), you’d create inflation.