this post was submitted on 08 Feb 2025
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The government "debt" is not a problem whatsoever. It cannot be a problem. The so called debt is simply the difference between the amount of money created and the amount taxed. If there was no "debt" there couldn't be any saving in an economy. If the government wanted to, it could simply "print" the money to pay off all its debt tomorrow. It souldn't necessarily be a smart thing to do, but there wouldn't be any financial constraints stopping them from doing it.
Thank you for your well-formulated argument.
However, i'm worried that it does not actually work that way. It is short-sighted and ignores second-round consequences.
For example, first of all, where do all these savings go to? They go to the rich, making the poor poorer. As such, if the government goes into debt instead of taxing the rich, it actually contributed through its inaction to make the poor poorer. The government should tax the rich instead of printing more money.
Secondly, if the government does print more money to rid itself of its debt (as you have rightfully suggested), that leads to hyperinflation, which mostly tolls the poor, because they have more difficulty stabilizing in a shaking environment that the big companies.
Thirdly, probably the government can print lots of money once to rid itself of the debt, but it can only do so once. Because once it has done so, people will assume "money has no value anyway, if it can just lose all its meaning overnight", and stop considering that money as valuable in the first place. Therefore, that is the end of paper money. What do you do then?