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View Diary: Insolvency, tax cuts, military spending and social security (188 comments)

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  •  Printing money and the debt are different things (0+ / 0-)

    In fact, one is the opposite of the other.   If the country were actually short of money (which it is not) we could either borrow money or print more.   Either solution would eliminate the debt, but of course both have consequences.

    Printing money is also not "hidden" inflation, it is the definition of inflation.

    It is important to be precise when thinking about solutions.   The real issue for the country is as Armando states, it is really a matter of priorities and politics.   If Obama were a dictator and we really wanted to end the deficit, it could be done by the end of next year.

    When we almost had a surplus (pre-bush) serious economists were actually worried because US government notes (debt) are a key part of the world's economy.  

    •  No, they ARE the same (0+ / 0-)

      Not at all. They are not opposites.  Government money is debt & government debt is money. This is a key point, that everybody used to understand. FDR made a point of saying this in his second Fireside Chat.  

      You can't eliminate the Federal Debt without eliminating the base money in the economy. They are the same thing! A Treasury bond is nothing but (a sum of) dollar bills with dates in the future printed on them. A dollar bill is nothing but a matured treasury bond, a bond with a date in the present or past on it.

      A government exchanging its bonds for its dollars is NOT borrowing - it is a completely different transaction from borrowing, that happens to be called by the same word in order to confuse the suckers.

      Printing money is not the modern definition of inflation, although it may be an older one. The modern definition is empirical price-inflation, e.g. the CPI.

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