Our Debt Cannot Be Inflated Away

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Money printing exceeds 2.5 times the combined costs of our recent wars. It’s ginormous. Compounding that problem, the U.S. debt cannot be paid, even in inflated dollars. Serious inflation is inevitable that will crash stock and bond markets, in addition to devaluing the dollar.

Three years ago I wrote Per Capita World Debt Has Surged To More Than $200,000, one of my most-read articles. Many of the comments said money printing is the solution: “Just pay the debt with inflated money.”

In the following, I explore the practicality of settling the debt with newly printed money. We’re poking the inflation bear, but haven’t made a dent in the debt because there’s way too much of it.

Where we are now

The official U.S. debt of $27 trillion is 130% of GDP, but Professor Lawrence Kotlikoff has warned about “off-balance-sheet debt” from Social Security and Medicare that totals another whopping $76 trillion. All-in U.S. debt is $103 trillion, which is 490% of GDP.