GoodFellows: Conversations from the Hoover Institution cover image

Speaking Words of Wisdom

GoodFellows: Conversations from the Hoover Institution

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Will Increased Inflation Be the Government Solution to Devaluin the Debt?

If interest rates rise, governments respond by cutting back spending or possibly raising tax ratin if they can. You either cut back in order to pay those interest costs on the debt, or you inflate, or you default. We just had a a grand total about eight % o inflation. So we just effectively defaulted on % of the debtsbut amatis the loss of the government's liabilities o index lingt and inflation does not get rid of them. Inflation will not solve the looming debt problems of the us.

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