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Comment by Retric

Taxes are paid in a nations currency which creates demand for the currency scaled to their economy. Borrowing money is the only way to get spending > taxes without an exponential increase in the amount of money generated every year. That exponential growth then gets worse as the economy tanks and debt explodes. It’s been demonstrated repeatedly, things get out of control extremely quickly.

There is a little wiggle room. Governments do get to create a little money as their economies grow or if it’s used in foreign economies without causing significant inflation, but it’s dangerous to just spend it directly. The issue of course excessive printing or any economic contraction.

PS: Foreign debt is of course a closely related issue, but countries don’t create foreign debt unless they are forced to. You can’t get hyper inflation with a currency actually pegged to another currency or gold, those ties break long before hyper inflation happen.

parent Retric 5 years ago

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