Reply #28: However it WILL be considered a partial default by those lending money. [View All]

There is a reason the interest on our debt is low. It is low because we have controlled inflation and thus the post inflation return (only measure of wealth that matters) has been positive.

As soon as post inflation returns are negative lenders will demand higher interest on the debt. Given the United States revolves about $1.8 trillion a year that means rather rapidly a good "chunk" of our debt starts converting to 7%, 8%, 9%, 13% interest rates.

There is no free lunch. Deficits are a necessary evil in a recession but intentionally devaluing the dollar will slam future budgets.


I mean the interest on $14T @ ~4% makes up about 20% of the budget. What do you think $20T @ 16% interest would do?