Re:Do High Interest Rates Fix High Inflation?
by nly on Tuesday June 13, 2023 @06:05PM
(#36318235)
Ray Dalio talks about this succinctly.
When you issue too much debt and don't have the income to pay it back (you're running a deficit) you either pay the borrowers back less money than they are due (default) or you pay them back the same amount of money but that money is worth less (you 'inflate the debt away').
When you issue too much debt and don't have the income to pay it back (you're running a deficit) you either pay the borrowers back less money than they are due (default) or you pay them back the same amount of money but that money is worth less (you 'inflate the debt away').