Isn't this the plan?

[Core Imposter]

http://www.telegraph.co.uk/finance/...ts-of-history-can-get-us-out-of-this-fix.html

This article is saying what I have been ****ing about all along.

These techniques also offer a partial solution to the public debt problem, though not one that central banks, with their inflation remits, will ever willingly admit to. Governments may pay lip service to the virtues of fiscal consolidation, but ultimately it always proves too painful and politically unpalatable, and they end up inflating away the debt instead. Inflation of 5 per cent per annum would more than halve the real value of the existing stock of debt in less than 10 years, all other things being equal. This is essentially what happened in post-war America, where repeated bursts of inflation, manufactured through ultra-loose monetary policy and the “financial repression” of bond yields legally capped at 2.5 per cent, helped quite rapidly to reduce public debt to manageable levels.

It’s extremely unfair on creditors and cash savers, but losing 10 to 20 per cent of your money through the stealth tax of inflation is presumably preferable to losing the lot in mass default. Government bond investors take note: with yields at historic lows, you are in the midst of one of the biggest financial bubbles of all time.


Does anyone here disagree that this is the plan and does anyone disagree that it could get out of hand?

 

[Leoreth]

Something that isn't happening can't get out of hand.

 

[hobbsyoyo]

The liberal horde you deride says you are wrong by default.

 

[Cutlass]

http://www.telegraph.co.uk/finance/...ts-of-history-can-get-us-out-of-this-fix.html

This article is saying what I have been ****ing about all along.

These techniques also offer a partial solution to the public debt problem, though not one that central banks, with their inflation remits, will ever willingly admit to. Governments may pay lip service to the virtues of fiscal consolidation, but ultimately it always proves too painful and politically unpalatable, and they end up inflating away the debt instead. Inflation of 5 per cent per annum would more than halve the real value of the existing stock of debt in less than 10 years, all other things being equal. This is essentially what happened in post-war America, where repeated bursts of inflation, manufactured through ultra-loose monetary policy and the “financial repression” of bond yields legally capped at 2.5 per cent, helped quite rapidly to reduce public debt to manageable levels.

It’s extremely unfair on creditors and cash savers, but losing 10 to 20 per cent of your money through the stealth tax of inflation is presumably preferable to losing the lot in mass default. Government bond investors take note: with yields at historic lows, you are in the midst of one of the biggest financial bubbles of all time.


Does anyone here disagree that this is the plan and does anyone disagree that it could get out of hand?

If you conservatives would stop running up so much debt you don't intend to pay for, the problem would be solved.

 

[Core Imposter]

If you conservatives would stop running up so much debt you don't intend to pay for, the problem would be solved.

Well, you basically define everybody as conservatives while I basically define everybody as liberals. So we can't seem to find a point of common ground. Maybe there is one, can we agree that if politicians stop spending money they don't intend to pay for then that would be a step in the right direction?

 

[Cutlass]

Well, you basically define everybody as conservatives while I basically define everybody as liberals. So we can't seem to find a point of common ground. Maybe there is one, can we agree that if politicians stop spending money they don't intend to pay for then that would be a step in the right direction?

Sure. But it's funny that people who call themselves conservatives are the ones most likely to spend money they have no intention to pay for, and then expect others to bail them out of their actions.

 

[Core Imposter]

What I don't get is those who support progressive taxation seem to support the spending yet inflation is the ultimate regressive tax scheme.

 

[Cutlass]

And no one is for inflation. So what's your point? A couple of percent of inflation is necessary. It is horribly damaging to the economy as a whole to attempt to have 0 inflation. That causes deflation, and deflation is the actual most regressive taxation around. Small inflation is not regressive at all, because the economy as a whole gets so much more growth, stability, and jobs out of it.

 

[Core Imposter]

I am not talking about or anticipating a modest inflation rate. I am talking about policymakers' intent to solve the debt riddle with inflation and their hubristic thinking. Beyond the insidious effects it will have on the people, what happens if it gets out of control?

And how can we have confidence in their ability to control it. These are the same people who got us in this mess to start with.

I am just pointing out that they have a plan and that it is just as likely to blow up in our faces as it is to work, and, and, if it doesn't, it still screws just about everybody.

Let me state is clearly, the stated inflation rate is not the goal. The Fed's goal is inflation in the range of 3-5%. They aim for a sweet spot that can reduce the weight of the debt without causing riot in the streets.

I assert that this is exactly what they discuss behind closed doors and I am certain that I am right because the only other ways to deal with the debt is to default or stop spending.

And they will never, ever, stop spending.

 

[Ayatollah So]

yet inflation is the ultimate regressive tax scheme.

Uh, in case you haven't noticed, poor people tend to have negative net wealth. Inflation helps them more than it hurts them, methinks.

Not to mention that the credible promise of future inflation will force cash hoarders to make actual investments, which helps get the economy back up closer to its full potential output. Which means less unemployment - which especially helps people at the low end of the income scale.

 

[peter grimes]

I never EVER thought I'd see the day come when Muster Cooper is advocating Paul Krugman's sutions to the debt crisis.

Sometimes a circle hoes so far around as to bite itself in the face :-$

 

[WindFish]

I assert that this is exactly what they discuss behind closed doors and I am certain that I am right because the only other ways to deal with the debt is to default or stop spending.

What about raising revenues?

 

[Core Imposter]

I never EVER thought I'd see the day come when Muster Cooper is advocating Paul Krugman's sutions to the debt crisis.

Sometimes a circle hoes so far around as to bite itself in the face :-$

What have I written here to make you think I support this?

 

[peter grimes]

What have I written here to make you think I support this?

Your OP. You don't think some inflation would be the smoothest way to clear up a lot of the imbalance?

Maybe I'm misreading you...

Also, apologies for the mistake-laden post above - I was posting in haste from my phone.

 

[Cutlass]

I am not talking about or anticipating a modest inflation rate. I am talking about policymakers' intent to solve the debt riddle with inflation and their hubristic thinking. Beyond the insidious effects it will have on the people, what happens if it gets out of control?

And how can we have confidence in their ability to control it. These are the same people who got us in this mess to start with.

I am just pointing out that they have a plan and that it is just as likely to blow up in our faces as it is to work, and, and, if it doesn't, it still screws just about everybody.

Let me state is clearly, the stated inflation rate is not the goal. The Fed's goal is inflation in the range of 3-5%. They aim for a sweet spot that can reduce the weight of the debt without causing riot in the streets.

I assert that this is exactly what they discuss behind closed doors and I am certain that I am right because the only other ways to deal with the debt is to default or stop spending.

And they will never, ever, stop spending.

Or we could raise taxes. That solves the problem with a lot less harm to people and the economy.

 

[JollyRoger]

I don't understand why conservatives, who generally scold those with personal debt problems to increase their income, always seem to miss the raising revenue component to resolving a government deficit issue.

 

[bhsup]

Because if we'd cut all the bs entitlement programs, we wouldn't need to raise revenue.

 

[Cutlass]

Because if we'd cut all the bs entitlement programs, we wouldn't need to raise revenue.

Such as? Most entitlements are the the only thing standing between 3 meals a day and a roof over the head and being homeless and starving.

 

[bhsup]

At the federal level? All the unconstitutional ones like social security, medicare, and so forth.

 

[JollyRoger]

At the federal level? All the unconstitutional ones like social security, medicare, and so forth.

Get rid of those, you would get rid of the payroll tax and end up in even a bigger deficit hole.