Quote:
Originally Posted by Tinordi
It's a pretty simple way to look at it but you're right. The one point you don't mention however is the role of growth. Devaluing your currency by investing in domestic infrastructure, stimulating demand in other ways and supporting key export related industries is seen as basically the model for growth in the developing world and there's no reason it doesn't apply to the U.S. Infact, that's been the ostensible policy of the past 3 years. So you don't need to inflate away your debts completely, you can devalue, grow and pay your debt off in that not so insidious way.
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I dismissed government generated growth because quite frankly it won't work in a
real sense. 'Beggar thy Neighbour' is not the best policy for the world's largest economy to pursue as other countries will respond by increasing their money supplies too and the combined effect of this might have an adverse effect on international trade.