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View Diary: There will be no default on the national debt (113 comments)

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  •  There are lots of things the President could do (1+ / 0-)
    Recommended by:
    salamanderempress

    The question is which action will produce the least bad results. The idea of minting a trillion dollar coin will meet our debt obligation, but it will also create inflationary pressures.

    •  more inflation would be good now (1+ / 0-)
      Recommended by:
      jeopardydd

      If we had a little more inflation, the Fed could be more effective.

    •  we WANT (0+ / 0-)

      inflation right now.

      it gives the Fed more power to help the economy while also helping people get out from under their debt by reducing the real value of that debt.

      •  And wrecking the housing market... (1+ / 0-)
        Recommended by:
        salamanderempress

        ...with skyrocketing interest rates.

        And screwing low-income workers who sure as hell aren't going to get raises.

        And a dozen or so other negative impacts that people haven't considered.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Thu Dec 27, 2012 at 11:21:35 AM PST

        [ Parent ]

        •  nah (0+ / 0-)

          interest rates won't skyrocket until the economy is at or near full employment.  it's simply not a worry for a long time.

          meanwhile, you can't have an inflationary cycle unless wages largely keep up with inflation - otherwise, companies cannot keep charging more and more if people's wages are not going up so that they can buy the products.

          meanwhile, far too many people are buried in debt (housing, student loans, credit card debt, etc).  inflation erodes the real value of that debt (which is why the rich in particular hate inflation, because they are often lenders/investors).

    •  Have you shopped for groceries lately? (0+ / 0-)

      ...or automobiles?

      ...or gasoline?

      I have to break the news to you, but we have been under the strain of inflationary realities for quite some time.

      The money printing is already taking place. I can live with inflation so long as it is not compounded by a heap of debt. Right now, we are cutting both our hands off.

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