If the United States can print its own dollars, why does it have a debt of $39 trillion?
Correct answers only: I’ll give 10,000 sats to the best answer within the next 24 hours.
By printing 6 - 7% a year, on a debt that only has less than 4% interest.
Increasing the money supply and the debt by 7% in a year, debases the real value of all dollars by about the same. So in real terms the value of the debt decreases faster than the interest increases the debt in nominal terms.
Counterintuitively increasing the debt and printing money actually reduces the debt burden on the federal government, without actually ever repaying it. In their unique case, the higher the debt goes the better it is for them. Unfortunately, the worse it is for everyone else.
Increasing the money supply and the debt by 7% in a year, debases the real value of all dollars by about the same. So in real terms the value of the debt decreases faster than the interest increases the debt in nominal terms.
Counterintuitively increasing the debt and printing money actually reduces the debt burden on the federal government, without actually ever repaying it. In their unique case, the higher the debt goes the better it is for them. Unfortunately, the worse it is for everyone else.