Deficits may not be inflationary long term if they represent sound infrastructure investments that increase productivity, but when they do not, the little guy pays eventually.
Let the short term inflationary effects of deficits be felt immediately by the electorate. Rather than deficits, let there be political incentive to raise other taxes if regressive taxation is unpalatable. Obscuring the issue with the hard to understand concept of 'government debt' means the electorate is less aware of what is going on until they are eventually are forced to pay for it.
As an aside, read Soddy. Printed currency is 0% interest fixed rate government debt cancelled each time it's collected in taxes and rolled over each time it is spent. The story of 'Government pays for deficit by printing money' is easy to understand. The effects of deficits should be as transparent as possible. Deficit spending is not necessarily inflationary if it increases productivity, but it is not felt immediately as it crowds out the lowest performing parts of the economy first.
By holding dollar denominated assets, China skims value off the RMB. This is equivalent to a tarriff because This value comes from the purchasing power ( especially power to buy foreign goods ) of Chinese paychecks. By increasing the value of the dollar to buy Chinese made goods, this subsidizes Chinese exports.
Pay back us national debt by printing money as it comes due. Treasuries earn interest. Dollars earn zero interest. See if China wants to hold billions of dollars earning zero percent interest. If not, the dollar is devalued as needs to happen.
Somebody needs to teach the host to shut up and let the big man do the talking...
hipguyrockin 1 month ago
Deficits may not be inflationary long term if they represent sound infrastructure investments that increase productivity, but when they do not, the little guy pays eventually.
AsciiSillyQuestion 5 months ago
Let the short term inflationary effects of deficits be felt immediately by the electorate. Rather than deficits, let there be political incentive to raise other taxes if regressive taxation is unpalatable. Obscuring the issue with the hard to understand concept of 'government debt' means the electorate is less aware of what is going on until they are eventually are forced to pay for it.
AsciiSillyQuestion 5 months ago
As an aside, read Soddy. Printed currency is 0% interest fixed rate government debt cancelled each time it's collected in taxes and rolled over each time it is spent. The story of 'Government pays for deficit by printing money' is easy to understand. The effects of deficits should be as transparent as possible. Deficit spending is not necessarily inflationary if it increases productivity, but it is not felt immediately as it crowds out the lowest performing parts of the economy first.
AsciiSillyQuestion 5 months ago
By holding dollar denominated assets, China skims value off the RMB. This is equivalent to a tarriff because This value comes from the purchasing power ( especially power to buy foreign goods ) of Chinese paychecks. By increasing the value of the dollar to buy Chinese made goods, this subsidizes Chinese exports.
AsciiSillyQuestion 5 months ago
Pay back us national debt by printing money as it comes due. Treasuries earn interest. Dollars earn zero interest. See if China wants to hold billions of dollars earning zero percent interest. If not, the dollar is devalued as needs to happen.
AsciiSillyQuestion 5 months ago