Trump: US can never default because it prints money

[Economy 52,861]

5 hours ago, Mast said:

The U.S. could very much choose to default, it's just unlikely that they will. Yeah, we could always print money to pay debts, but that would in turn **** over the economy to the point of another collapse, or at the very least demolish the middle class. You also have to remember that the cost of social-insurance programs like Medicare and Social Security cannot be inflated away. That's not the part of Trump's statement that bothers me the most tho. What bothers me is that he's essentially saying the U.S. is entitled to only pay back fractions of its debts. He also suggests to have the government purchase a large amount of debt in the event of a crash in US debt prices, which doesn't make any sense. It's just horrible business

Both defaulting and printing have huge concequences. Thats why most Countries do everything in their power to avoid doing either

 

Remember the EU Bailouts to Portugal, Ireland, Spain and especially Greece? It was all to avoid a default at all costs

 

However no one here has noted that the Government already printed tones of money and gave it to the Government indirectly

 

When Central Banks (including Americas Federal Reserve) did Quantitative Easing and printed money to buy Government Bonds and force yields down, they did print money to finance Government debt in a way...

 

The only difference is that, that money still shows up as debt because it was aqckired by a bond. It also didnt cause much inflation because that money stayed in Financial Markets and bond market and didnt enter the general economy

 

But the QE done between 2008-2013 was printed money, and it still exists in the Federal Reserves Balance sheet as outstanding yet to mature debt bonds.

 

The European Central Bank, and the Bank of Japan are still doing this as we speak

[politicqxs 358]

"If interest rates go up and we can buy bonds back at a discount, if we are liquid enough as a country, we should do that" 

 with another war on agrabah and another decade of Obama care we are never gonna be liquid enough..