Yes: economic havoc, most notably hyperinflation. Zimbabwe is probably the most famous example, with their dollar dropping over the past three decades from above parity with USD to less than one/25,000,000,000 a USD. Naturally, this makes things like trade and paying off debt rather difficult.
The US is in a unique situation though, as its currency is widely used internationally. If you owe me $20 USD, and you devalue your currency to get yourself more bills to move around, you still owe me $20 USD, since that was the terms of the loan, but when I get that money from you, it's no longer worth the same to me. So if I'm carrying your debt in your currency, I'm going to want to keep your currency from tanking.
To pay off the whole debt would be a silly thing, as anosognosia says, but no, in principle, there's no reason the Treasury couldn't whip up a stack of Benjamins and do it.
One thing that some actual economists have been suggesting to help with the current fuckshittery that is the economy is, though, to use the Mint to give everybody who files a tax return this year a bunch of dollars -- direct rather than indirect stimulus. IANAE but it seems like everybody having more money would certainly stimulate things.
Just tonight, NPR's Marketplace did a collaborative show with the BBC on the European debt crisis. Near the end of it, they interviewed some investment dude (sorry, that's the best I can do this close to bed): he talked about how the modern, industrialized world's economies were based so much on debt and consumption that we need massive growth just to sustain them. Oh, hell, I can't remember and explain what he said well enough for it to be worth trying. Here. It starts at about 20:00.
Hrmm, just listening to it again, there are things they say in that Podcast which weren't broadcast on the air, and things which were broadcast which aren't on the Podcast. That's interesting.
Anyways. Basically, what he said on the air was that there just isn't enough magic unicorn shit to keep the big inflatable balloon blowing up bigger and bigger forever. Kai came right out and asked him: "Okay, so if growth is so important in our type of economy, I'll ask the scary question: can we find it?" And the guy replied: "I don't think we can."
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Yes: economic havoc, most notably hyperinflation. Zimbabwe is probably the most famous example, with their dollar dropping over the past three decades from above parity with USD to less than one/25,000,000,000 a USD. Naturally, this makes things like trade and paying off debt rather difficult.
The US is in a unique situation though, as its currency is widely used internationally. If you owe me $20 USD, and you devalue your currency to get yourself more bills to move around, you still owe me $20 USD, since that was the terms of the loan, but when I get that money from you, it's no longer worth the same to me. So if I'm carrying your debt in your currency, I'm going to want to keep your currency from tanking.
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Ooookkaaay. So this is why we have things like monetary policy. Cool.
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One thing that some actual economists have been suggesting to help with the current fuckshittery that is the economy is, though, to use the Mint to give everybody who files a tax return this year a bunch of dollars -- direct rather than indirect stimulus. IANAE but it seems like everybody having more money would certainly stimulate things.
Reply
(The comment has been removed)
Hrmm, just listening to it again, there are things they say in that Podcast which weren't broadcast on the air, and things which were broadcast which aren't on the Podcast. That's interesting.
Anyways. Basically, what he said on the air was that there just isn't enough magic unicorn shit to keep the big inflatable balloon blowing up bigger and bigger forever. Kai came right out and asked him: "Okay, so if growth is so important in our type of economy, I'll ask the scary question: can we find it?" And the guy replied: "I don't think we can."
Reply
(The comment has been removed)
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