Comment by DrNosferatu
7 days ago
» The country is at risk of a debt spiral.
This is impossible by definition:
The U.S. dollar is the world's dominant reserve currency.
7 days ago
» The country is at risk of a debt spiral.
This is impossible by definition:
The U.S. dollar is the world's dominant reserve currency.
And as history shows, printing money is a super fantastic way to get out of debt spirals. [Narrator voice: No, it's not.]
Instead of throwing around historically illiterate analogies, let's talk about the real issues:
What are the actual inflationary risks right now given the state of the economy? What are the costs of not spending (i.e., austerity)?
Because history also shows – very clearly – that austerity imposed due to debt panic in countries that could have afforded to spend is often way more damaging than the debt itself.
The "printing money" quip misunderstands how modern monetary systems operate. The Fed doesn't just "print money" - it has only two real tools: buying and selling assets, and raising/lowering interest rates.