Comment by aurareturn
3 hours ago
This administration wants lower rates. Also this administration does everything it can to increase inflation such as tariffs and starting another endless war in the middle east.
3 hours ago
This administration wants lower rates. Also this administration does everything it can to increase inflation such as tariffs and starting another endless war in the middle east.
The administrations choices are fairly binary now.
Inflate away the $40Trillion+ debt they can never pay back
Or
Hard default on the debt, and be the one holding the hot potato as the union breaks up.
Fed is trying to thread the needle between the two and keep the music playing as long as possible.
Or just fail for 4 years like every Republican administration since the 80s and wait for a Democrat to fix the economy...
> Fed is trying to thread the needle between the two
Not really, inflating it away is the only possible choice.
Can’t inflate it away for the same reason we can’t stop climate change. We would have to stop the behavior that caused the problem in the first place, and we all know that’s not going to happen. Remember during Clinton’s presidency the government ran a surplus and started paying down the debt, and there were news articles worrying about the future disappearance of treasury bonds? The party of “fiscal responsibility” took care of that problem in no time at all.
There is one obvious choice here, the policy is inflation and always has been.
From the adminstration
Fed independance is about tempering that policy so UST still has buyers.
2 replies →
yet many "third world" countries managed to pay their debts just fine. some even more than once in recent history.
American exceptionalism even in failure?
1 reply →
You're missing choice #3 - spend more money on stupid shit, cut taxes some more, pile on more debt, blame Obama Hussein Hunter Biden for the debt as the opening salvo of the third-term run in 2028.
The way this administration works is that anyone in a decision making position has been swapped for a self-serving yes-man who will do whatever Trump wants. Anyone they can't replace who won't deliver is briefed against or investigated until they quit or can be fired. Facts that might influence the decision play no part in the process.
The easy acceptance of this authoritarian governing style has been one of the most damaging to the idea of democracy. America's democratic institutions have great marketing but many of us outside the country and not subjected daily to that marketing have long known it is an particularly weak form of democracy and open to corruption, demagoguery and populism. Americans have a susceptibility to authority and hierarchical normalisation, has left them open to this.
The purpose of a system is what it does.