What do you think happens if the debt goes up? Do you think the government is gonna go bankrupt? That’s literally not how it works.
Do you think inflation is gonna happen? Again, literally not how it works. In fact, too low public spending means you get deflation which is even worse than inflation.
I will admit that I don't understand economics, but infinite free money hacks seem too good to be true.
The government wants the economy to operate at close to full capacity, so it creates money and spends it into the private sector.
Eventually that money makes it to individuals, who want to save some of that money. There’s also foreign agents that might want to hold on to your currency, and trade happening that means some of your money leaves your country.
If the government maintains steady spending, this money supply slowly dwindles, which leads to a shrinking economy.
So governments issue debt to offset that dwindling money supply. The catch is that spending that doesn’t create real resources is inflationary, so you have to spend money on things that eventually earn you more money.
At the end of the day, that’s the idea of macro economics. Spend enough to get your economy growing, while making sure inflation doesn’t go up too much. Which is why people that complain about debt have no idea what they’re talking about.
My understanding is that the reason the USD is unusually resistant to inflation is that there's artificially high demand due to international demand for the currency as the global reserve currency.
But yeah, if that effect weakens (and the BRICS are trying to challenge the USD as reserve currency), then I think you'll see the USD weaken/inflation spike in response to large deficits.
You're the one that has no idea what hes talking about.
Debt uncontrollably going up without something to balance it means exactly that. If the debt exceeds the GDP, which is where the US is clearly going, we are looking at a collapse of the US dollar and its global influence. Theres no telling what will happen after that because its unfathomable
This is also why the techbros are staging a coup on the US, so the US doesnt come for the billions when it goes bankrupts
> means you get deflation which is even worse than inflation
2. People regularly come up with this theory that prices dropping is a terrible thing. An extraordinary claim for which I've never seen an argument I accepted and the evidence is as thin as a rake. Typically the countries that experience the horrors of deflation go on to be unusually wealthy and prosperous - I'd like to see more of it. But it is easy to see why the governments would believe deflation is bad that since they are typically enormous debtors and inflation favours debtors.
Frankly I suspect that if prices go down all else equal most people will be better off and able to afford more stuff. Wild take, I know.
Especially given that "prices always up"="good" is counter-intuitive and I can't find anyone with a clear argument in favour of inflation. There is lots of gobbledegook and occasionally people who make arguments equivalent to holidays being bad because they reduce economic output. Which is an argument but not very persuasive, I'd prefer to optimise towards an end state where I get to live out a permanent comfortable holiday; even if the economic metrics go down. I like comfort.
EU - Still to see the long term consequences, but it isn't obvious the deflation was the bad thing in the story.
Hong Kong - Jewel of Asia.
Ireland - Very high HDI and GDP ppp per capita.
Japan - Economic success story.
UK - Can't argue that they're a success! But their problems after WWI wasn't the deflation.
US - Some good some bad, lots to debate, but the latest episode (Great depression in the 1930s) set them up to conquer the world and establish the Not-An-Empire they have now. If that is a bad outcome I fear the good ones.
I'm not seeing the Zimbabwe equivalent. In fact it looks a lot like deflation is associated with - if not a precursor to - long term economic success and prosperity.
