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This subject has come up on another thread where it is offtopic. It seems like it should have a dedicated thread.

I think most of us learned early on that too much debt leads to bankruptcy, or a related form of ruination (with a notable exception of Donald Trump). But personal debt and national debt don't appear to have much in common. The U.S. has a big, and growing, debt that is definitely not on track to ever be paid off. My common sense has long expected that such a scenario unavoidably results in inflation - in fact, we can easily verify steady and exorbitant inflation for a century or more. What can you buy with a penny anymore (why do they even exist?).

When I got my first car at 16, gas cost 27-1/2 cents per gallon (and that wasn't cheap to me). It's now more than ten times that amount, an increase of 1000%, or about 20% per year. (Is that math right?). 20% inflation (based on the beginning price) per year, is that hyperinflation? Is anyone admitting that we have had a 20% annual inflation rate for the past 50 years?

How does this House of Illusion keep functioning?

Maybe the mass delusion that the Trumpers have so diligently brought to our consciousness is just the tip of the iceberg... eek2


“You never change things by fighting the existing reality.
To change something, build a new model that makes the old model obsolete.”
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I'm not a financial guru. But I think that inflation actually helps the debt or stabilizes it. Who it hurts are those who hold the bonds and whatever on the debt. If I have a debt of 100 dollars, inflation hits at whatever percentage and I wait long enough, the dollar I have today worth half of what it was when I incurred that 100 dollar debt, when I pay off my 100 dollar debt off, I'm doing so with money that worth 50 cents on the dollar, half of what it was worth when I first borrowed the 100 dollars.

Does that make sense?

Then there is the question of the interest rate paid by the government on the debt. Extremely low at present, but could rise at any time. In 2020 interest payment on the national debt was 345 billion. In other words 10.1% of the total revenue received by the federal government in FY 2020.

So 10% of all revenue received went to paying interest on the debt which means that 10% of all money taken in by the government doesn't go to help anyone other than those who hold the debt.

It seems to me, there is a point of no return here. Or a point where the dollar becomes basically useless.

By the way, I remember when I got my first car paying 19 cents a gallon and when gas wars occurred, gas was as low as 11 or 12 cents a gallon. I'd say it's all relevant. I was making 95 cents an hour working in an old pig iron foundry when not working on the farm. Then I got drafted and the army was a piece of cake compared to what I was doing prior to being drafted. I made it a career. active duty and then made it a second career as a civilian working for the army. In other words, 3 dollars for a gallon of gas today is probably the equivalent to 19 cents back in the early 1960's.


It's high past time that we start electing Americans to congress and the presidency who put America first instead of their political party. For way too long we have been electing Republicans and Democrats who happen to be Americans instead of Americans who happen to be Republicans and Democrats.
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You are assuming that those who own our debt get their money back. Not really. What happens is that they get interest on their bonds, etc. (talking about bonds issued by the United States of America) The interest goes up and down based on what the current interest rate is as defined by the Federal Reserve. If one is reducing their bonds they typically sell them off. If, for instance, we don't pay the interest, and so they try and sell their bonds it means its really time to put all your money into land of one sort or another because your money value is on the decrease. The object is to change your money into something of value instead of faith.

Unfortunately, even though all the experts say we are just dandy, our direction is not a comfort. I sincerely hope they are right.

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I like your explanation and agree. A house down here that would cost you 200,000 last year has risen to 250,000. Inflation or is it because Georgia is getting a huge influx of people from the New York and the Northeast? Probably both.


It's high past time that we start electing Americans to congress and the presidency who put America first instead of their political party. For way too long we have been electing Republicans and Democrats who happen to be Americans instead of Americans who happen to be Republicans and Democrats.
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Originally Posted by perotista
I'm not a financial guru. But I think that inflation actually helps the debt or stabilizes it.
Both debt and inflation are elements of "growth". According to Capitalism, greed and "growth" are good, maybe even a necessity.

Yet it all seems to be only so much smoke blown up our collective zombie arses.

I wonder what Greta (Thunberg) has to say about it?


“You never change things by fighting the existing reality.
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Your inflation math is wrong. It's essentially the compound interest equation. 4.8% inflation per year gets you to 10 times for gas prices over 50 years:

1.048 ^ 50 = 10.43

If the current inflation rate holds, it would take over 230 years to inflate prices 10 times.


God sent Trump.......because God was out of locusts.
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Why would we expect the current rate of inflation to hold for the next 230 years?


“You never change things by fighting the existing reality.
To change something, build a new model that makes the old model obsolete.”
– R. Buckminster Fuller
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Compound interest formulas aside, the fact that prices increased by ten times over 50 years, and we blithely accept that as ‘normal’ inflation, is a wonder to me. Why should ever increasing prices occur in the first place?

Why should out of control inflation cause the ruination of a nation?

Is this a function of free market Capitalism, or Socialism, or just human insanity?

Why do the birds go on singing? Why do these eyes of mine cry?


“You never change things by fighting the existing reality.
To change something, build a new model that makes the old model obsolete.”
– R. Buckminster Fuller
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This sums it up in every way...




“You never change things by fighting the existing reality.
To change something, build a new model that makes the old model obsolete.”
– R. Buckminster Fuller
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Inflation is dangerous as the tipping point to hyperinflation is often waffer thin.



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Except that it's lonesome work
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