Worrying About the Deficit Is So 17th Century

Naked Capitalism has the article Worrying About the Deficit Is So 17th Century.

Such was the origin of that debt which has since become the greatest prodigy that ever perplexed the sagacity and confounded the pride of statesmen and philosophers. At every stage in the growth of that debt the nation has set up the same cry of anguish and despair. At every stage in the growth of that debt it has been seriously asserted by wise men that bankruptcy and ruin were at hand. Yet still the debt went on growing; and still bankruptcy and ruin were as remote as ever.

It is fun to just rule out the possibility of inflation, but then people bring up historical inflation that did occur. Then you have to explain what is the difference between situations where inflation occurred and situations where it did not occur. That’s when you can have a conversation about reality. However, by then you may have lost the trust of your audience because you didn’t admit to inflation right from the start. The comments at the end of the article take care of discussing the conditions that create inflation as opposed to those that do not cause inflation.

Yves Smith

That is not correct. To get hyperinflation, you need significant loss or destruction of a country’s productive capacity and foreign currency obligations you can’t meet.


Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.