re: #261 Blind Frog Belly White

Because our debt is all in a currency we print. We could, if we wanted to, print 23 Trillion dollars and pay off all our national debt in one go, and there’s nothing our creditors could do to stop us, or demand other payment.

Other countries, whose debt is denominated in currencies they don’t control, don’t have that option. Let’s say you’re Greece, and you owe $400 Billion, denominated in dollars. You can’t print dollars. You can print a lot of drachmas, maybe, but if you do, the exchange rate would kill you and you’ll never be paid off.

Now, for the US to simply print money to cover the debt would be a TERRIBLY BAD IDEA, because it would devalue our currency, but we could literally make all the debt go away at once. And probably never be able to borrow another dime.

Except the Federal Reserve is not directly controlled by the government. The member banks would slaughter every member of the Fed if they tried that.

Even if the Fed could do that, hyperinflation is essentially the same thing. It is not bankruptcy in the sense you can’t pay your bills, but you’ve effectively made it so you can never pay a bill again.