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Inflation?
Obviously, the US, by controlling its own currency, cannot default on its debt because it can always “print” itself out of trouble (Fed buys some of the debt). But printing money to service an out-of-control debt and deficit in an inflationary environment could cause inflation to spiral out of control, which would wreak havoc on the economy, lead to years of economic pain, wealth destruction, and lower standards of living. So this is nothing to be trifled with. The far better solution is to trim the annual deficit down to where economic growth and modest inflation outrun it, which would over time alleviate the problem..
Wolf Richter •
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