Originally Posted by Winter
I don't know. One could make the argument that it is hard to default when you are able to print money. Not sure that brings much comfort.
Hopefully, we will be careful with health reform so that it will not contribute to the national debt.
It is not "hard to default" when you can print money, it is impossible. And that is what the U.S. has done before, which is why we had rampant inflation during Carter's turn at office.
And of course that brings no comfort, which is why interest rates have to go up. People will not buy our debt paper, when the risk has perceived to go up, unless they are induced to buy that paper with greater reward - aka high interest payments. High inflation (caused by increased money supply) and high interest rates (a result and not a cause of inflation) patches over the debt problem but generally wrecks havoc on the enconomy especially for the work-a-day person.
Not to mention that the government taxes inflation, giving them a windfall revenue stream via a hidden tax on taxpayers.
The last statement you made, that you hope we will be careful with health reform, was so cynical. You were kidding - right?
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