Longer Step: Ideas for Justice and Sustainability

This article in National Affairs is too long and meandering, but I love this line: " Paying off bonds with currency that is worth half as much as it used to be is like defaulting on half of the debt ." I've been thinking (and saying) for a long time that we will see inflation, not deflation, because the only way to repay the federal debt is to do it with ever-more-worthless dollars: Print too much money, cause inflation, and repay the debt with devalued dollars. Our government is stealing our future from us, in order to keep the balls in the air a little longer. But it is a sucker's game, and at some point it will become obvious to everyone that the US dollar is worthless. And all who hold their wealth in dollars at that time will suddenly realize they are financially ruined. A sane economic plan would see: a. Progressive income tax rates that raise enough money to fund the entire government's expenditures for the year; b. A vast (VAST) reduction in federal spend...

  Highly recommend Lyn Alden ; she (having a rare combination of an engineer's mind and an economist's training) is a national treasure re unlocking the mysteries of the economy; national debt; the Fed; etc. The Fed is trying to increase unemployment (you read that right), in order to reduce demand, which should reduce inflation. But that will also likely cause a recession. So if you need to make a big expenditure, it might be savvy to postpone it IF it is the sort of cost that is unusually high now but normally cheapens during recessions (e.g., using contractors to do some construction work). But if the item is subject to inflation (e.g., a new car), it's anyone's guess how successful the Fed will be in controlling inflation, and when you should buy. This entire mess could become painful and ugly. She makes the point that it's like the 1940s again for the US, except this time we are a debtor nation in decline, with a mostly-aged population demanding a heavy load ...

 A. Macro level : What happened? We have inflation because our government has printed too much new money, compared to the size of the economy and its growth rate.* Recent giveaways (to virtually all taxpayers) have put more money in the hands of consumers, and when they have more money to spend on a limited supply of goods and services, the prices will go up (that is demand-side inflation). And if those goods and services are scarce (because of recent supply chain issues**, then prices go up more (this is supply-side inflation). We're seeing the worst inflation rate since the 1980s.  *The US government has spent itself into a black hole from which there may be no escape: We punish any politician who even timidly suggests a balanced federal budget, and therefore we continue spending more on federal programs than incoming tax revenue can pay for. So we borrow the difference, creating a burgeoning mountain of unpayable debt that will destroy the lives of our future generations. F...