Comment by oezi
8 days ago
If there is a deficit at all. Looking at the monetary flows it seems most of the deficit outflows where just flowing back into the US through the stock market.
8 days ago
If there is a deficit at all. Looking at the monetary flows it seems most of the deficit outflows where just flowing back into the US through the stock market.
Interest is paid on the deficit, and once the interest gets large enough, there's a runaway doom loop.
It depends on who is spending. If American consumers or the American government borrow to consume, what you say is right.
But it was US monetary policy for decades now that the deficit doesn't really matter, because the world trusts the US and loans the money back.
> If American consumers or the American government borrow to consume, what you say is right
Consumer borrowing is paid back, so it does not contribute to inflation. Government just issues more debt to pay off the debt, and that leads to collapse.
> US monetary policy for decades now that the deficit doesn't really matter
AKA kicking the can down the road. The bill will come due.